If you want to refinance your Columbia SC mortgage, a few key things are going to be expected of you. Find out what is expected if you want to refinance your Columbia SC mortgage in this video…
The report called it "a particularly large consumer financial mistake."
We recently told you about FICO score changes that were being made that could make getting a mortgage easier for Columbia SC home buyers.
Well, not so fast.
What nobody mentioned about the score, dubbed FICO Score 9, is that most Columbia SC home buyers aren't likely to see any direct benefit from it any time soon, very possibly not for years.
That's because the two dominant financing sources in the mortgage market — Fannie Mae and Freddie Mac — aren't planning to use the new score in evaluating loan applicants for the foreseeable future. And major banks and mortgage companies aren't jumping to adopt it either.
None of this detracts from the merit or potential value to consumers of FICO's new score. The company says that by separating out medical debt-collection issues — which are commonplace negatives in millions of consumers' credit files — from other types of collection actions, the FICO 9 model will more fairly rank the actual risks posed by some applicants compared with others. For borrowers whose sole major negative credit file account is an unresolved medical debt, Fair Isaac estimates that the new model will increase scores by a median 25 points.
FICO 9 also is designed to more fairly treat applicants who have limited accounts on file with the credit bureaus — often young, first-time Columbia SC home buyers or consumers who have made minimal use of credit cards and other forms of personal credit.
Columbia SC Home Buyers Not Likely To See Any Help
So on the surface, the advent of the new score is a big deal. But here's the real world: New FICO score models only matter in the mortgage market if lenders choose to use them to evaluate applicants. And, based on discussions with leaders in the mortgage field, FICO 9 is a long way off from adoption. It's not likely to help many Columbia SC buyers any time soon, despite the hype.
Among other reasons, it can cost substantial sums of money to retool complex automated underwriting systems, especially at Fannie and Freddie. Lenders have to weigh the costs and benefits.
Will the relatively small improvements be worth the expense and hassles? And with all the other regulatory changes mandated by recent financial reform legislation, do we have the time and manpower to devote to analyzing the effects of FICO 9?
The sobering answers for Columbia SC home buyers appear to be no.
But stay tuned. As with anything else, these things are subject to change. And if and when they do, we'll let you know right here.
Check out our other articles and news affecting Columbia SC home buyers when it comes to mortgages by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
Columbia SC mortgages may be easier to get soon. A new calculation of credit scores will soon make it easier for millions of Americans to qualify for car loans and credit cards. The new methodology also could provide easier access to Columbia SC mortgages after tight post-recession lending standards shut millions of potential new homebuyers, particularly young Americans, out of the market.
The Fair Isaac Corp., which issues credit scores used in 90 percent of U.S. consumer lending decisions, says it will give less weight to unpaid medical bills when assessing creditworthiness, starting this fall. It also won't penalize a borrower's credit score if they've had bills settled with a collection agency.
FICO Changes for Columbia SC Mortgages Great for Consumers
Under FICO's current methodology, many potential borrowers either have been flat-out denied access to credit or forced to pay higher interest rates. Matt Fellowes, CEO of workforce optimization firm HelloWallet and a former Brookings Institution fellow, calls the changes "terrific improvements for consumers."
The revisions weren't necessarily a response to people's failures to pay medical bills, but rather intended to address punishment for bills they might not even know they had.
Over half of collections on credit reports are associated with medical bills, according to the Federal Reserve, and a May Consumer Financial Protection Bureau study found that some credit scoring models may overly penalize consumers because of medical debt. The score disadvantage – up to 25 points – could cost someone tens of thousands of dollars in interest over time on bigger loans like Columbia SC mortgages.
This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher rates for Columbia SC mortgages because of flawed credit scores.
The advice from most mortgage professionals to first-time home buyers is to begin sprucing up their credit at least six months before applying for any Columbia SC mortgages. FICO scores seen by lenders are not what are sold to consumers by the three national credit reporting agencies. The only way consumers will know for sure how their credit looks to lenders is by applying for pre-approval or filling out a mortgage application.
Check out our other articles and news affecting Columbia SC mortgages by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
It is definitely getting easier these days to obtain Columbia SC mortgages.
A strong housing market combined with fears that the Federal Reserve would eventually begin tapering its purchases of mortgage bonds helped drive up the cost of a 30-year fixed-rate mortgage from about 3.3 percent in January 2013 to nearly 4.6 percent by September.
Since then, Columbia SC mortgages have backed off those recent highs, bobbing back and forth between 4.5 percent or so, and, recently, 4.2 percent. This has helped to keep housing affordable for those who want to buy a home. But it did pose the bankers a dilemma: How could they get more people to want to buy homes in the first place, so they could sell more Columbia SC mortgages?
Answer: Make it easier to apply for those Columbia SC mortgages.
What Lenders Are Doing to Make Getting Columbia SC Mortgages Easier
Demanding less money up front to obtain a mortgage is one obvious way to ease more buyers into the housing (and home mortgage) market. Another tool is loosening up lending restrictions.
According to LendingTree, "Average credit scores for borrowers matched with lenders on the LendingTree network have dropped 6 percent year over year." This, says LendingTree, indicates banks being "more willing to consider a wider pool of borrowers."
Company founder and CEO Doug Lebda put it this way: "As the housing market improves and refinance activity declines, lenders are adapting their guidelines to improve credit accessibility for borrowers. Relaxed lending guidelines translates to a larger pool of qualified homebuyers."
Obviously this is great news for those buying Columbia SC homes and getting Columbia SC mortgages. With actual mortgage rates now range-bound, it's a bit cheaper to obtain a mortgage today than it was a year ago, and there's also less uncertainty about which way mortgage rates are moving.
Throw in the fact that bankers are less antsy about the risk their loans will ultimately get defaulted on, and it's also a bit easier to get that mortgage loan approved.
Granted, it's developments just like these that sucked America into a financial crisis that nearly destroyed the economy six years ago. But if that's what it takes to get you into a new home — and a new mortgage obligation — apparently, the bankers are willing to risk it.
Stay tuned, we'll keep you updated right here on Columbia SC mortgages and the trends that either cause the market to make it easier, or more difficult, to get those mortgages in the future. In the meantime, check out our other articles and news affecting Columbia SC mortgages by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
When you decide that owning a home is right for you, one of the big decisions you'll face is with your Columbia SC mortgage. Should you choose a 30-year fixed rate mortgage, or a 15-year fixed rate? Here are the advantages and disadvantages of these two popular options when it comes to getting a Columbia SC mortgage…
We can help you decide whether a 30-year fixed rate or a 15-year fixed rate Columbia SC mortgage is best for you, or whether considering one of the many adjustable rate options is better for your circumstances.
We also have other articles and tips pertaining to getting a Columbia SC mortgage, and things you need to know before deciding which type of mortgage is best for your circumstances and budget by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.