It's not news to anyone that maintaining a respectable credit score is vital to obtaining a home loan and a competitive mortgage interest rate.
What's respectable in the current lending environment may be news to many consumers.
According to an August 26, 2007 article in the Boston Herald, underwriting standards adopted by various lenders have increased the minimum credit score necessary to stay out of the subprime lending pool.
A minimum credit score of 620 had been the typical cutoff point between a traditional loan and a subprime loan; however, some lenders now are requiring minimum scores of 680, a significant increase. For limited documentation loans, some lenders are requiring a credit score of at least 720.
Mortgage brokers I speak with regularly have been telling me for months that underwriting standards literally have been changing on a daily basis, and many loan programs are no longer available.
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