Although the averages for mortgage rates continue to hit new record lows, obtaining a mortgage hasn't become any easier, as banks and other lenders still have strict credit standards, according to the Los Angeles Times.
A potential borrower's FICO score is one of the major factors considered when determining loan eligibility and the average score on new loans is up from a year ago. According to Ellie Mae, the average FICO score on new loans closed in August was 750, which was 9 points higher than the previous year, the paper reported.
The average FICO score was even higher for a government backed loan, as Fannie Mae and Freddie Mac refinances closed in August has an average score of 769, which was 6 points higher than a year ago, while loans for home purchases had an average score of 763.
Many potential buyers with good credit histories were even decline loans by the two government-sponsored entities, the paper notes, as the typical buyer who was declined has a FICO score of 734, which was 2 points higher than a year ago.
Despite tight lending standards, 30-year fixed-rate mortgages averaged an all-time low in the week ending September 27, according to Freddie Mac, which makes home buying more affordable than ever for qualified borrowers.