Getting approved for a mortgage is becoming easier as lenders are loosening their FICO score requirements and raising the ceiling on debt-to-income levels.
All lenders are lowering credit qualifications across the board, but nonbank lenders lead the pack. Median FICO scores are around 713 for nonbanks compared with banks, where the median scores are 745, according to the Urban Institute’s Housing Finance Policy Center February Chartbook.
The lowest credit scores for home loan borrowers is 643, compared with the low 600s in the early 2000s. Keep in mind, however, you can obtain a mortgage with even lower scores through government programs including FHA loans and VA loans.