HousingWire – Brena Swanson
Obtaining a mortgage with a FICO score in the 620 range is more difficult in today’s lending environment, the Federal Reserve concluded in its April survey of loan officers and bank lenders. The Federal Reserve polled a little under 100 banks and found 32 of respondents are less likely to approve a borrower with a FICO score of 620 and a down payment of 10%. Even with a higher 20% down payment, 18 banks remained skeptical about originating a mortgage. However, when a FICO score reaches 680, banks differ on the outcome. With a 10% down payment, 16 banks remain less likely to approve the borrower, but another 8 banks said they’re now more likely to bite with this FICO-LTV combination in effect. If you throw in a 20% down payment and a 680 FICO, only 8 banks said they’re less likely to approve the borrower, while 16 are now more likely.