Home Mortgages - New Data Reveals Mortgage Eligibility

A recent analysis of over 25,000 home loan quotes and purchase requests which were made on the Zillow Mortgage Marketplace during the first two weeks of September revealed that almost a third of Americans would not qualify for a mortgage on account of their credit scores being too low. According to the latest data available at myFICO.com, approximately 30% of Americans have a credit score which is lower than 620, which would mean that it would be very unlikely for them to be offered a mortgage quote, even if they were to make a 25% down payment.

Dr. Stan Humphries, the Chief Economist at Zillow Mortgage Marketplace, commented on the current situation: “We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we’ve seen for years. But the irony here is that so many Americans can’t qualify for these low rates, or can’t qualify for a mortgage at all. Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today’s tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery.”