28% of Americans can't get a mortgage
The percentage with credit scores below 620 hasn't changed in the past three years. At the other end, you need an even higher score to get the best rate with a low down payment.
Here’s something that has not changed in the housing market in the past three years: More than a quarter of Americans are unlikely to qualify for a mortgage.
That’s according to a new analysis by Zillow, which looked at 13 million requests for loan quotes and then compared data for 2013 and 2010, plus got some credit score data from MyFico.com.
Borrowers with credit scores below 620 got few quotes from lenders. A total of 28.4% of Americans fit into that group. In contrast, 40.3% of Americans have credit scores above 740, making them eligible for the best rates.
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"Despite all-time-high levels of affordability in the housing market, tightened lending standards mean that nearly one-third of Americans are unlikely to be able to achieve the American Dream of homeownership because they can’t qualify for a mortgage due to a low credit score," Erin Lantz, director of mortgages at Zillow, said in a news release.
One thing that has changed since 2010 was the credit score required to get the best rates with a low down payment. Back in 2010, a 720 would get you the best deal. Now, Zillow found, a credit score of 740 is required to get the best rates if you’re putting only 5% down.
The size of the down payment mattered at every level. A chart shows that borrowers with credit scores of 740 or above were quoted an average minimum APR of 4.39 with a 30% down payment, compared with 4.97% if they were paying only 5% down. For those whose credit scores ranged from 620 to 639, the range of quotes was from 4.99% with 30% down to 5.63% with 5% down.
How does this play out in real life? Zillow compared three mythical buyers who can afford to pay $1,000 a month:
- Scott, with a down payment of 30% and a credit score of 635: Mortgage rate of 4.89%, able to afford a $265,000 house
- Tom, with a down payment of 5% and a credit score of 745: Mortgage rate of 4.89%, able to afford a $195,000 house.
- Brandon, with a down payment of 20% and a credit score of 745: Mortgage rate of 4.41%, able to afford a $250,000 house.
Much of the problem in major cities across America is that the price of condos, townhomes and SMALL homes are sky high and artificially inflated. It should not cost a million dollars to buy a tiny condominium in Manhattan or San Francisco.....but it does.
More importantly, no one is talking about the MANY mortgage holders who can NOT get REFINANCED at a lower rate on their current mortgage loans.....WHY? Because the banks will not just lower their mortgage rate to the current lower mortgage rate. The banks view the refinancing as an entirely new loan, and perform new and exhaustive credit analysis. Many people can not qualify for the refinancing, even though they are not borrowing anything. They just want a LOWER RATE TO SAVE MONEY. Just LOWER the mortgage rate to the current rate !!!! That's why the banks were bailed out....Why doesn't the government address this?
Good those people should not get loans if they can not afford them, loans given by Republican bankers to anyone who could breathe is what got us into the Republican recession.
But what happened to this ' Law ' that forced these Republican bankers to loan money to people with no jobs? Did that law get repealed? I have not heard of that happening, are these bankers now breaking the law then? How is it so many people who can not afford a loan are being denied now but no Republican Banker is being arrested? Or Maybe there never was such a law?
Wow so the Republican Bankers lied? Who would of thought? You mean NO ONE forced these greedy Retardican Bankers to loan money to anyone who walked in yet when the loans went south they demanded a bail out and bonus for failure while foreclosing in millions of middle class families?
The Retardican party, socialized losses and privatized gains. They held America hostage until they got a bail out for their 'too big to fail' masters and now they hold America hostage again in order to insure future outlandish profits for their wealthy health industry masters at the expense of American lives.
I had a good paying, full time job when I bought the house 10 years ago but lost job in 2008! and was unable to obtain a similar job and had to settle for part time job at half the pay! Business closed due to recession and part time job ended, so I went back to college to reinvent myself and graduated last year with a Computer Science degree, but am still looking for job! House is now a liability instead of asset!
Liberals/MSNBC believe that it's a right that everyone own a home regardless if they can afford it. That was one big reason we had the mortgage meltdown leading to this recession.
STOP LEGISLATING EQUALITY.
"tightened lending standards mean that nearly one-third of Americans are unlikely to be able to achieve the American Dream of homeownership because they can’t qualify for a mortgage due to a low credit score"
"One of the major reasons for our Recession was the misguided push by the Liberals for everyone to have a house whether or not they could afford it. Let's not repeat the same mistake. Personal and financial responsibility is required for home buyers as well as for our politicians."
"so they should NOT get a mortgage in the first place until they can AFFORD it !!!!!!"