More people are being approved for home loans, and a higher percentage of them are closing on those loans, according to a report recently released by Ellie Mae, the mortgage loan automation software company. The report could be proof that efforts by government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to open up the “credit box” to more possible borrowers are taking effect. These entities, which offer lenders backing for conforming loans, have, over the last year, attempted to update policies to provide more transparency to lenders, so they can lend money to more people with confidence.
The proof that this may actually be working lies in the fact that the average FICO credit score of borrowers who closed loans in September of this year was 723, down from 731 in January. The loans are also closing faster. Ellie Mae reports an average closing time for September of 46 days, continuing a trend where closing times declined for four months in a row.
Continuing the efforts to make mortgage loans more accessible to qualified borrowers, Freddie Mac announced a partnership with Quicken Loans this week, which is designed to make it possible for more people to qualify for home loans. Freddie Mac and Quicken Loans hope to simplify the mortgage application process and work together to develop products that “meet the needs of emerging markets, including Millennials, first-time homebuyers and middle-class borrowers.”
With all these new efforts to make home loans more accessible and to streamline the application process in general, who knows what the lending process will look like by next year’s Mortgage Banker Association Convention & Expo, but if the current trends prevail, it could be a whole lot easier to apply for and close on a home loan.
For the latest on home loans, rates, and to fill out an online application, visit goldenstatemortgage.com.