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Today we’ll check out “Blue Spot Home Loans,” which derives its name from a combination of Blue the Cat and Spot the Dog.

Blue is apparently always on the hunt for tips and tricks to help you better understand how a mortgage works, while Spot is eager to fetch you a good mortgage rate and sniff out the perfect loan program.

Let’s learn more about this Denver area direct-to-consumer mortgage lender that says it’s proud of its “highly-competitive rates.”

Blue Spot Home Loans Fast Facts

  • Direct-to-consumer mortgage lender launched in 2017
  • Offers home purchase loans and mortgage refinances
  • Headquartered in Greenwood Village, Colorado
  • A division of Cherry Creek Mortgage Co.
  • Currently licensed to do business in 20+ states
  • Most active in their home state of Colorado
  • Also do a lot of business in California and Texas

Blue Spot Home Loans is a direct-to-consumer mortgage lender located near Denver, Colorado that offers home purchase loans and mortgage refinance loans.

They are actually the online lender division of their larger parent company Cherry Creek Mortgage, and have a pretty nifty website to boot.

Think of them as a more no-frills, straight to the point digital lender for those looking to complete a mortgage refinance quickly from a remote location.

Other than their corporate headquarters in Greenwood Village, Colorado, they don’t have any physical branches you can visit.

That should suit most folks these days as it’s now quite common to work with an online mortgage lender, pandemic or not.

One neat feature about Blue Spot Home Loans is the fact that their loan officers are salaried as opposed to commissioned, meaning they shouldn’t pressure or hassle you into a mortgage.

Per their website, they’re currently licensed in 20 states (but it might be more now), and seem to be most active in California, Colorado, and Texas.

How to Apply with Blue Spot Home Loans

  • You can call them up or send an email to get pricing and apply
  • Or simply visit their website and begin the application process there
  • Their loan officers are salaried-employees so you shouldn’t feel pressured
  • They offer a digital mortgage application and online loan portal where you can check your loan status 24/7

You’ve got a few options to get started with Blue Spot Home Loans. You can either call or email them to get in contact right away, or head over to their website.

If you visit their website, you can check out daily mortgage rates by clicking on “today’s rates,” or alternatively fill out a short lead form and wait for a loan officer to call you back.

They also give you the option to apply immediately via the website. First you need to register and then you can access the online loan portal from any device, such as a desktop computer, tablet, or smartphone.

Their digital mortgage application allows you to link financial accounts, scan and upload necessary documents, and eSign disclosures.

If you’re a prospective home buyer, they say you can get pre-qualified for a home loan in under 10 minutes.

Once your loan is submitted, you can check loan status and get a to-do list if any additional conditions must be met before closing documents are prepared.

Blue Spot Home Loans claims it can close loans fast, in as little as 14 days if no events beyond their control (home seller, appraisal or title/escrow issues) take place.

Loan Programs Offered by Blue Spot Home Loans

  • Home purchase loans
  • Refinance loans: rate and term, cash out, and streamline
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Jumbo home loans that exceed the conforming loan limit
  • FHA loans
  • VA loans

Like all other mortgage lenders, Blue Spot Home Loans offers both home purchase loans and refinance loans.

They work with first-time home buyers and existing homeowners looking to refinance their mortgage, whether it’s a rate and term refinance or a cash out refi.

They lend on all property types, including single-family homes, condos/townhomes, and multi-unit properties (1-4 units).

You can get financing for a primary residence, second home, or investment property.

In terms of loan type, you can get a conforming loan backed by Fannie or Freddie, or a jumbo mortgage up to $3 million.

Additionally, they’ve got FHA loans and VA loans, which offer low-down and no-down payment options, respectively.

It’s unclear if they offer USDA loans or home renovation/construction loans, but if not, they could probably refer you to their parent company who does.

Blue Spot Home Loans Mortgage Rates

One advantage to using Blue Spot Home Loans is the fact that they openly advertise their mortgage rates and lender fees on their website.

So instead of having to call a loan officer, or provide your valuable contact information, you can simply cruise over to their website and generate your own free mortgage rate quotes on the fly.

They have a nifty mortgage rate table that lets you plug in various loan scenarios to compare different loan programs and closing costs at once.

You can toggle between purchase rate and refinance rates, and see both 30-year fixed and 15-year fixed rates.

Assuming you’re happy with what you see, simply click on “next,” at which point you’ll be asked to enter your contact information in order to be linked up with a mortgage loan officer.

From what I saw, their mortgage rates looked pretty competitive relative to other online mortgage lenders.

They say if you do happen to find a better rate, to give them a chance to beat the other lender’s quote.

While you can see rates and total closing costs on their website, it’s unclear what exact lender fees they charge as they aren’t listed individually.

So it’s unclear if they charge a loan origination fee, application fee, and so on. Be sure to get those details when you speak to a loan officer about a mortgage rate quote.

Blue Spot Home Loans Reviews

On Google, the company enjoys a 4.7-star rating out of 5 from just over 200 customer reviews.

They’ve got an even better 4.9-star rating on Bankrate from about 150 reviews, with 97% saying they would recommend this lender.

And on Zillow, Blue Spot has a 4.85-star rating from nearly 100 reviews, which is pretty close to perfect as well.

Remember, you can see individual loan officer reviews on Zillow if you want to fine-tune and seek out someone specific based on their past performance.

Lastly, they’ve got a 4.2 out of 5 on LendingTree from about 20 reviews, with a 79% recommendation rate. Not as good, but a pretty small sample size.

Their parent company is Better Business Bureau accredited (since 2014), and currently has a perfect ‘A+’ rating.

All in all, Blue Spot Home Loans could be a good choice for a borrower with a straightforward loan scenario looking to fund a mortgage quickly without a sales pitch.

Blue Spot Home Loans Pros and Cons

The Pros

  • They publicize their mortgage rates and lender fees
  • They use salary-based mortgage consultants
  • You can apply for a home loan directly from their website
  • Offer a digital mortgage application and borrower loan portal
  • Can fund loans in as little as 14 days
  • Excellent customer reviews
  • A+ BBB rating
  • Company blog with helpful tips and tricks

The Cons

  • Not licensed in all states
  • May not offer USDA loans or renovation loans
  • Do not list lender fees
  • No physical locations
  • May not service your loan

(photo: a.canvas.of.light)

Source: thetruthaboutmortgage.com

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Today we’ll check out “HomePlus Mortgage,” a San Diego-based direct lender that strives to provide the highest level of customer service along with the most competitive mortgage rates out there.

You may have come across them on a mortgage comparison website as they’re quite an active advertiser with Bankrate, LendingTree, and Zillow.

The company appears to be living up to their goal of providing exceptional customer service, with numerous awards, accolades, and countless 5-star reviews over their 20-year history.

Let’s learn more about them to determine if they could be a good choice for your home loan needs.

HomePlus Mortgage Fast Facts

  • Direct-to-consumer mortgage lender
  • Established in 1999, headquartered in San Diego, CA
  • Offers home purchase financing and mortgage refinance loans
  • Currently licensed in nine states
  • Do not charge an application or rate lock fee
  • Branch locations in AZ, CA, and TX

HomePlus Mortgage was founded back in 1999 in current CEO Phil Pizzino’s home office. Since then, they have become a billion-dollar loan originator.

They are a direct-to-consumer mortgage lender, meaning they operate call centers staffed with loan officers, processors, and underwriters who work remotely with homeowners.

Like most lenders, they offer both home purchase loans and refinance loans, with the latter likely their specialty.

At the moment, they are only licensed in nine states nationwide, including Arizona, California, Colorado, Florida, Idaho, Montana, Oregon, Texas, and Washington.

It’s not clear if they plan to expand to additional states, or if they’re happy with the areas they serve currently.

Aside from their corporate headquarters in San Diego, they’ve also got branches in Carlsbad, CA, Dana Point, CA, Mission Viejo, CA, Lake Forest, CA, Phoenix, AZ, and Dallas, TX.

How to Apply with HomePlus Mortgage

  • They say they’ve got a proprietary online mortgage application
  • But first you’ll need to request a free mortgage rate quote on their website or call them up to discuss pricing
  • They’ll begin with a one-on-one consultation to determine your mortgage needs
  • Then you can apply for a home loan online via their secure borrower portal

To get started, you can either request a free mortgage rate quote via their website, or call them up for a one-on-one consultation with a loan officer.

In either case, you’re going to need to speak with a loan officer before you apply for a mortgage, as there doesn’t seem to be an option to do so on your own.

While I do favor mortgage lenders that let you go it alone, it’s probably wise to discuss loan pricing before you commit to a loan application.

So your first move will likely be a telephone call – if you like what you hear, they will probably provide you with a link to the application.

While it’s unclear what technology they utilize, they say they’ve got a proprietary online mortgage application.

This means you should be able to apply online and manage your loan via their secure loan portal from there on in.

Ideally, you’ll be able to complete most tasks paperlessly, including scanning/uploading documents, eSigning disclosures, and so on.

I assume they make it easy to apply and manage your loan given their exceptional customer feedback.

Loan Options Available at HomePlus Mortgage

  • Home purchase loans
  • Refinance loans: rate and term, cash out, and streamline
  • Conforming loans backed by Fannie Mae and Freddie Mac
  • FHA loans
  • VA loans
  • Fixed-rate mortgages: 30-year fixed, 15-year fixed
  • Adjustable-rate mortgages: 5/1 ARM, 7/1 ARM

HomePlus Mortgage appears to offer most of the major loan types out there, including home purchase loans and refinance loans.

So they could be suitable for both first-time home buyers and existing owner looking for a rate and term refinance, cash out refinance, or a streamline refinance.

You can get a conventional loan backed by Fannie Mae or Freddie Mac, or a government-backed mortgage such as an FHA loan or VA loan.

They don’t appear to offer USDA loans or jumbo loans, which is a slight negative if you want/need either of those.

In terms of loan programs, you can get a fixed-rate mortgage such as a 30-year or 15-year fixed, or an adjustable-rate mortgage, including a 5/1 and 7/1 ARM.

HomePlus Mortgage Rates

One slight drawback to HomePlus Mortgage is the fact that they don’t publicize their mortgage rates.

So if you visit their website, you won’t see daily rates, nor will you be able to compare them online.

However, because they do advertise quite a bit on many mortgage comparison websites, you might come across them if you’re actively shopping your home loan.

I’ve seen their rates at times in comparison tables and they appeared to be pretty competitive relative to other lenders listed.

And it appears they often structure their loans with limited fees, or as a no cost refinance.

But because they don’t let you see rates without speaking to a loan officer first, it’s probably best to call them and get pricing before you apply.

Also be sure to ask about all lender fees charged, such as a loan origination fee – they say they don’t charge an application fee or rate lock fee, which many other lenders do.

However, they could still charge an appraisal fee upfront, which typically works the same way in it being a quasi-deposit from the customer.

Your best move is probably to call them to get pricing, then shop around, and if they offer the best combination of rates and fees, you can proceed to apply online.

HomePlus Mortgage Reviews

On LendingTree, HomePlus Mortgage has an excellent 4.9 out of 5-star rating from more than 1,500 customer reviews. They’ve also got a coveted 100% recommended rating.

Both interest rates and fees/closing costs were rated “excellent” by their customers, as was responsiveness and customer service.

In the past, the lender has earned accolades such as landing in the top-10 for customer service on the LendingTree platform, and was rated the #1 multi-national lending provider.

On Zillow, they have a 4.95-star rating out of 5 from almost 900 reviews – you can filter reviews by loan officer, so take advantage of that if you’re looking for someone specific to work with at the company.

On Bankrate, the company has a perfect 5.0-rating from nearly 300 customer reviews, with 99% saying they’d recommend this lender. They also earned a “Select Lender” distinction in 2020.

Over at Yelp, they have a slightly less favorable 4.5-star rating out of 5, which is obviously still a good score.

Lastly, they are an accredited business with the Better Business Bureau (since 2001), and currently have an ‘A’ rating.

In closing, HomePlus Mortgage sounds like a good option for existing homeowners looking to refinance since they appear to be a low-cost online mortgage lender, and their customer service is top-notch.

Since they have limited branch locations, they may not be the best for home purchase loans as you might need more hands-on attention, but they do have a real estate agent division as well.

HomePlus Mortgage Pros and Cons

The Pluses

  • They have a proprietary online mortgage application
  • Offer most major loan programs
  • Do not charge an application fee or rate lock fee
  • Say they can close loans in as little as 21 days
  • Incredible customer reviews across all ratings websites
  • Have won awards for exceptional customer service
  • Work nights and weekends for their clients
  • BBB accredited company with an ‘A’ rating

The Minuses

  • Not licensed to do business in all states
  • Do not publicize mortgage rates or lender fees
  • May not offer jumbo loans or USDA loans

(photo: Alan Levine)

Source: thetruthaboutmortgage.com

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The HousingWire award spotlight series highlights the individuals who have been previously recognized by the HW Editors’ Choice Awards. Nominations for HousingWire’s Women of Influence award are now open through Friday, May 19, 2023.  Click here to nominate a female leader in the industry — a client, colleague, boss or friend — it can even be you!

HousingWire’s prestigious Women of Influence award showcases the outstanding efforts of women in housing. From driving business growth to building high-performing teams and impacting public policy, the Women of Influence honorees consistently set a new standard for what it means to be true leaders in housing.

To celebrate the launch of the 2023 nominations, HousingWire reached out to several of our previous Women of Influence honorees to learn the secret to their success and gain some insight into how these impressive women got their start in the industry.

“When I started out in mortgage lending almost 40 years ago, I worked in the mailroom at a small mortgage company. At that time, my main goal was to provide for my family and to be the most indispensable employee at the company no matter my role. At small companies there are not always perfectly defined roles, so my success was measured by my ability to be willing to fill any role necessary to help grow the company. As I have learned more and changed roles throughout my career, the ability to take responsibility for any task and take accountability for any issue have been the hallmarks of my success.” — Susan Anthony, chief operating officer, Finance of America Reverse and 2019 Woman of Influence

“The secret to my success is having a career goal that I care passionately about. I will retire when Veterans are known as the most aggressive rate shoppers in the industry. There is a lot of work to be done to accomplish this goal and I spend a great time educating and spreading the word. Educating Veterans and helping them save money on the biggest purchase of their life feeds my soul and that is the key to my success.” — Jennifer Beeston, senior vice president of mortgage, Guaranteed Rate and 2022 Woman of Influence

“When I first started in real estate, I was like a kid in a candy store! I was working my tail off with no immediate payoff, but I was completely obsessed with this industry and it fueled me to keep going. That passion has never faded. For the last 15 years, I’ve shown up every single day with a clear purpose to serve others and a drive to be great. Being present and realizing that every day is a new opportunity to bring innovative ideas, improve and move the ball forward. It’s been a wild ride, but I wouldn’t have it any other way!” — Dava Davin, founder of Portside Real Estate Group and 2020 Woman of Influence

Click here to nominate someone for the 2023 award before the May 19th deadline!

Source: housingwire.com

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Traveling with kids can be a challenge for parents, especially when it involves international flights.

Experienced travelers know the benefits of Global Entry to reduce wait times at airport security and customs. But can kids get Global Entry? The answer is yes.

Unlike TSA PreCheck, which allows kids 12 and younger to use the expedited lanes with adults, Global Entry is required for travelers of any age.

Learn more about Global Entry, including how much it costs, how children can apply and what the interview is like for kids.

What is Global Entry?

Global Entry is a program from the U.S. Customs and Border Protection (CBP) that allows expedited processing of travelers through customs when returning from international travel.

Membership pre-approves low-risk travelers so they have access to expedited security lanes when returning through customs.

At Global Entry kiosks, returning travelers present their passports and answer a customs declaration. The kiosks also use fingerprints or facial recognition to identify the traveler and provide a transaction receipt they give to the customs agent.

Global Entry members also receive access to the TSA PreCheck lanes at airport security. They benefit from less invasive searches and body scans, and carry-on bags that streamline their way through airport security.

How much is Global Entry?

Global Entry is a membership program that costs $100 for five years. This breaks down to an average of $20 per year. There is no difference in price whether you’re an adult or a child.

A lower-cost option is TSA PreCheck, which is $78 for five years. However, it only covers domestic travel.

Credit cards that reimburse Global Entry application fees

Cards that reimburse Global Entry fees

Terms apply.

Most credit cards limit the reimbursement to once every four to five years. Check with your credit card for specific details on how often you can use this benefit.

If you have a credit card that reimburses these fees, you can use this benefit to pay for anyone’s application fees. It can be anyone you choose, including your spouse, children, siblings, parents and friends.

At what age are kids required to have their own Global Entry membership?

When returning from Cancun when my daughter was six months old, we learned the hard way that everyone needs Global Entry — even a baby.

Unlike TSA PreCheck, there’s no minimum age requirement. You must have a Global Entry membership to use the Global Entry security lanes.

My wife, son and I all had Global Entry, but our baby didn’t.

As we handed the customs agent our passports and interview slips, he asked for the baby’s documentation. I replied that she didn’t have an interview slip because she was so young. He said, “Sorry, but everyone needs Global Entry to use these lines.”

Fortunately, we plead ignorance, and the agent was sympathetic and let us through. However, we received a stern warning and were reminded that our baby needed a Global Entry membership.

When we returned home, I applied for that Global Entry membership. Then, we booked her interview appointment as soon as she was conditionally approved.

How to apply for Global Entry for kids

The Global Entry application for kids is the same as for adults. It starts by setting up an account and answering questions through the online application.

The application questions include identifying information, such as date of birth, home address and Social Security number. Additionally, you’ll need to provide information about recent travel, including listing the countries you’ve been to in the last five years.

When your application is complete, pay the application fee through the CBP website. This fee is nonrefundable (though, as discussed above, can be reimbursed by certain credit cards). The fee is charged to your debit or credit card whether you’re approved or not.

The CBP conducts a background search based on your child’s application. Once this process is completed, you’ll be conditionally approved and can book your child’s interview.

Booking an interview

Once your child has been conditionally approved, you can book their interview at an appointment location.

However, booking an interview for Global Entry can be a challenge. Many offices are understaffed, and appointment slots are in high demand. You may have to wait weeks or months for an appointment at your local interview office.

For example, there were no appointments available at the Nashville Enrollment Center for the next three months as I was writing this article.

One way around this is to drive or fly to another city that has more availability. When my wife first applied for Global Entry, we booked her appointment during a layover at New York-JFK. For my son, we drove about 90 minutes south to Huntsville, Alabama for his interview.

Enrollment on arrival

If you’re having trouble finding available appointment times, another option is to conduct an “Enrollment on Arrival.” These interviews are unscheduled and conducted at customs when you return from an international trip.

Simply go through the Global Entry line, walk up to an agent and let them know that you’d like to do an interview upon arrival.

We did this with my son a couple of years ago on a return flight from Cabo. Our Southwest Airlines flight had a stop in Phoenix. He answered a few questions from the customs agent, then he was fully approved. The entire process took just a few minutes.

What is the Global Entry interview like for children?

At your Global Entry enrollment interview, the agent asks numerous questions to verify your identity and the information on your application. Additionally, they’ll take your photo and fingerprints. However, the process is a little different for kids.

Depending on their age and comfort level, your child might be unable to respond to the interviewer’s questions. Parents or legal guardians are required to be present at the child’s Global Entry interview for this reason. Instead of the child answering the questions, the adult does so. Once again, the main goal of the interview is to confirm the data on the application.

At the conclusion of the interview, the interviewer takes a photo and fingerprints the child. However, the CBP does not fingerprint children under the age of four.

Global Entry for children recapped

Global Entry is an invaluable membership that saves time while traveling internationally. Unlike TSA PreCheck, you need Global Entry for kids of any age — even infants.

The program application and fees for children are the same as for adults. However, the interviews are often quicker, and your child may not need to be fingerprinted depending on age.

Frequently asked questions

How long does Global Entry last?

Global Entry membership is good for five years. With benefits lasting for multiple years, the average yearly cost is $20. Many credit cards also cover the cost, which makes it easier for travelers to benefit from this program.

Is Global Entry or TSA PreCheck better?

Global Entry and TSA PreCheck are two Trusted Traveler programs that can minimize your travel wait. TSA PreCheck provides access to special lanes at airport security for domestic travel. Global Entry members get access to TSA PreCheck and special kiosks that accelerate the U.S. customs process when returning from international travel.

At what age do you need Global Entry?

Global Entry is required for all international travelers, no matter how old you are. Whether you’re a senior citizen or a newborn, all travelers must have Global Entry to use the expedited customs lanes when returning from a foreign country.

Does a parent need to have Global Entry in order for the child to apply?

Children cannot apply for Global Entry on their own. They must have a parent or legal guardian’s permission to apply. However, the parent is not required to have Global Entry membership for the child to become a member.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

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Bank of America announced today that foreclosure sales have been halted in all 50 states amid allegations foreclosure proceedings were done hastily or improperly nationwide.

The issue focuses on so-called “robosigners,” otherwise known as employees or agents who signed off on hundreds or thousands of foreclosure documents in a short amount of time, essentially proving they didn’t do their due diligence or follow protocol.

“Bank of America has extended our review of foreclosure documents to all fifty states,” the company said in a release. “We will stop foreclosure sales until our assessment has been satisfactorily completed.”

“Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.   We continue to serve the interests of our customers, investors and communities.  Providing solutions for distressed homeowners remains our primary focus.”

The Charlotte-based bank and mortgage lender had previously halted foreclosures in just 23 states, but apparently decided to go the whole nine yards to satisfy a bevy of complaints from various state Attorney Generals.

The Texas AG, California AG and Connecticut AG had already called for similar foreclosure freezes.

And a number of other states have demanded a halt to all foreclosures, with the latest being Delaware, Iowa, Massachusetts, and North Carolina.

These and similar accusations led Ally Financial and Chase to stall foreclosures in 23 other states.

It’s unclear if more lenders will get on board and/or extend their foreclosure moratoriums to all 50 states.  Stay tuned.

Source: thetruthaboutmortgage.com

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A federal judge gave an early victory to loanDepot this month in a poaching case against CrossCountry Mortgage, in the latest legal battle between the industry giants.

LoanDepot sued its rival last July for raiding staff responsible for 81% of its annual New York-area production, and taking with it confidential company and client data. U.S. District Judge Lorna G. Schofield last week ordered a preliminary injunction barring CrossCountry and two dozen of its employees, who are named defendants, from using the loanDepot data they obtained.

“LoanDepot will suffer immediate, substantial, and irreparable harm should the following preliminary injunction order not be entered,” she wrote in an order last week. “… LoanDepot is likely to succeed on the merits of its Defend Trade Secrets Act claim against all Defendants.”

Schofield, however, didn’t approve loanDepot’s request to bar CrossCountry from soliciting its employees, writing that loanDepot didn’t show a “threat of irreparable harm” to support an injunction. The companies will participate in a mediation and must update the court by July 14, a separate order said. 

Both companies declined to comment this week. The case in the U.S. District Court for the Southern District of New York remains pending. It mirrors loanDepot’s poaching suit against CrossCountry in Illinois, where a similar injunction was ordered last December.

The Cleveland, Ohio-based lender has fended off numerous poaching suits from other firms, including a dismissal of a raiding complaint from Guild Mortgage. A spate of poaching lawsuits between mortgage competitors has subsided this year following mass layoffs and a market slowdown.

LoanDepot initially accused CrossCountry of poaching 32 employees from branches in Brooklyn, Manhattan and Fishkill, New York. The Irvine, California-based lender and servicer claims departed employees had since closed at least 60 loans at CrossCountry using confidential information they took with them. 

The amount of loanDepot data covered in the injunction is unknown, and a filing detailing the information is under seal. An amended complaint cites at least 10,000 documents copied by two employees alone, and describes files such as mortgage applications, pre-approvals and company compensation and sales data. 

Schofield ordered CrossCountry to not contact any customer in the loanDepot information, although the ruling doesn’t apply to CrossCountry’s applicants and borrowers who closed a loan between December 2021 and September 15, 2022. 

CrossCountry is also under fire from a former loan salesperson, who accuses the company of failing to pay employees when origination volume fell. That lawsuit remains pending in an Ohio federal court.

The publicly traded LoanDepot has undertaken a massive downsizing effort in the past year, including letting thousands of employees go. The industry’s third-largest originator recorded a $91.7 million net loss in the first quarter, and earlier this month announced an executive shakeup.

Source: nationalmortgagenews.com

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You’ve heard it time and time again, that a solid credit score is vital to securing a good mortgage rate, or any mortgage at all.

And it appears that this sage advice is becoming even more relevant today.

Average Credit Scores for Home Buyers Are Rising

  • The average credit score for a home buyer jumped to 745
  • Which used to be considered an excellent credit score
  • With it now being “average”
  • You might have to do better to get the lowest interest rate

Per the latest Housing Credit Index (HCI) from CoreLogic, the average credit score for a home buyer increased nine points year-over-year between the second quarter of 2016 and the second quarter of 2017.

It now stands at a very high 745, which is quite close to the top of FICO’s credit score range of 300-850.

Put simply, it means most of today’s home buyers are very well-qualified, at least in terms of credit history.

It may also signal a seller’s desire to go with a buyer they know will qualify for a mortgage, instead of rolling the dice on someone with subprime credit, or even just average credit.

At last glance, the average FICO score for all Americans was right around 700, so if the average score for home buyers is 745, you might have a problem if you’re batting below that number.

Aside from having a problem, you might also wind up with a higher mortgage rate, and spend more money every single month until you sell or refinance to a lower mortgage rate.

Hawaii led the nation in terms of credit scoring, with an average score of 756, followed by California (751), Colorado (751), DC (751), New York, Oregon, and Virginia (all 750).

Mississippi was the worst, at 728, which is still a respectable credit score and close to the top tier (740) in terms of mortgage pricing adjustments.

Just 2% of Home Buyers Had Credit Scores Under 640

  • There are also fewer home buyers with low credit scores
  • Just 2% had credit scores below 640
  • A sign that only the most well-qualified are winning bidding wars
  • And a wake up call to do better if you want to purchase real estate

Perhaps more startling is the fact that just two percent of these home buyers had credit scores below 640.

Basically almost everyone has at least a near-prime or prime credit score, with very few in the subprime mortgage category (below 620).

Back in 2001, some 25% of home buyers had credit scores under 640. And the market seemed to be in good shape at that time.

If you look at the chart above, you’ll see that even the very worst borrowers have credit scores that are 100 or so points higher than they were about a decade ago.

And the top mortgage borrowers are sporting 800 FICO scores, not that there’s any additional benefit for a score that high.

The Competition Is Getting Stronger

  • Your peers’ credit scores are rising
  • If you don’t keep up with them
  • You might be penalized in terms of a higher mortgage rate
  • Or a lost bid if the home seller chooses another applicant over you thanks to credit score alone

The takeaway is that your peers are getting stronger in the credit score department, and if you want to win that bidding war, you better have excellent credit.

Sure, lenders may accept lower credit scores, but the sellers might tell you to take a hike. And as noted, even if you can get the mortgage, why settle for less attractive terms?

The thing I repeat over and over is that credit is something you can control. You might not be able to make a larger down payment magically appear, or get a raise at work, but you have full power over your credit scores. Make the most of it.

For the record, DTI ratios are also dropping, as are loan-to-value ratios (LTVs), meaning today’s home buyers are putting more money down and making more dough. This is happening even as home prices surge.

With inventory severely limited, there are increased expectations for borrowers to be the best that they can be.

Despite these amazing numbers, CoreLogic’s HCI has been on the rise, meaning the mortgage market is getting riskier. They attributed that to a higher share of condo loans and investment properties, and a slight uptick in low doc loans.

But as you can see from the chart below, it’s still a long, long way from the uber high-risk 2006-2007 period. Ideally, it never gets back to that level or we’ll be in big trouble.

Source: thetruthaboutmortgage.com