Once again, the banks show their reluctance to lend by adding another block of up charges for FICO score and loan to value.

As we know the big news is that interest rates are around 4.5% and in some rare [perfect] cases, they are. However, the banks continue to up the ante for low FICO scores, pull in the reins on guidelines and basically taking way too long to get mortgages approved.

 

Up until last week there was never a charge for FICO score, taking equity out (cash out refi), etc if the loan was less than 60% of the home value. Now, a few banks have begun to add extra charges for FICO scores under 660 regardless. Another thing I see is no cash out allowed if the FICO score is below 620, regardless of loan to value. So, in light of this, they knocked more qualified borrowers out of the pool and have increased the cost for those left that are less than perfect.

 

The new “perfect” FICO score is over 740. Now that leaves a lot of folks out in the cold or paying a little more for their mortgage.

 

Happy MLK day!

 

Dale Siegel

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