Following the financial crisis of 2008, many lenders tightened their credit requirements. Many lenders made it much harder to get mortgages, especially so-called jumbo mortgages which are for much larger amounts.
In recent years, some lenders have been relaxing a bit, by not requiring such high credit scores. However, this hasn’t been the case with loans considered “jumbo” — and that don’t receive loan guarantees from the likes of Fannie Mae and Freddie Mac. Now, though, Wells Fargo is making the change, and lowering its credit requirements for jumbo mortgages, according to Business Insider.
Lower minimum credit score
Prior to this change, Wells Fargo required a minimum credit score of 720 for borrowers to be considered for a jumbo loan. Now, though, Business Insider reports that Wells Fargo will accept a credit score of 700.
This is in line with many banks, who are relaxing some of their standards in an effort to raise revenues. Business Insider reports on a July Federal Reserve survey that shows that 39 percent of large banks are somewhat relaxing their mortgage standards. In recent years, many buyers have been stymied because their credit wasn’t quite good enough to qualify them for the home loans they needed to take advantage of during the pricing drops.
With demand for mortgages rising, lenders are hoping to take advantage of buyers looking for homes. One way to do that is to make sure that these homebuyers can, in fact, qualify for mortgages. And it’s not as if Well Fargo new requirements for jumbo mortgages are excessively risky. For many, a credit score of 700 is still pretty decent.
Curious what your credit score is? Sign up for your free Quizzle.com account and get your free credit report and score today!