Years ago, credit scoring had little to do with mortgage lending . When reviewing the credit worthiness of a borrower, an underwriter would make a subjective decision based on past payment history.
Then things changed.
Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO scores above eight hundred became delinquent.
So lenders began to take a closer look at FICO scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO scores.
FICO Score
odds of a delinquent account
595
2.25
to
1
600
4.5
to
1
615
9
to
1
630
18
to
1
645
36
to
1
660
72
to
1
680
144
to
1
700
288
to
1
780
576
to
1
If you were lending a couple hundred thousand dollars, who would you want to lend it to?
Keller Williams Arizona Realty 9500 E. Ironwood Square Drive, Suite 101 Scottsdale, Arizona 85258 Phone: 480-595-6410 or 877-553-2539 Email: office@votsr.com
The materials contained within this page may not be reproduced without the express written consent of KELLER WILLIAMS ARIZONA REALTY - THE VALLEY OF THE SUN TEAM. The information herein is believed to be accurate and timely, but no warranty as such is expressed or implied.
The materials contained within this page may not be reproduced without the express written consent of KELLER WILLIAMS ARIZONA REALTY - THE VALLEY OF THE SUN TEAM. The information herein is believed to be accurate and timely, but no warranty as such is expressed or implied.