By Marcie Geffner - Wisconsin Real Estate
Wisconsinites’ median credit scores are among the highest in the United States. Yet that tendency toward good credit hasn’t shielded Wisconsin home buyers from the current climate in which mortgage lenders have tightened their guidelines, raising the bar for buyers who need financing.
The biggest hurdle is what Stephen LaDue, a senior loan officer with Prime Lending, a PlainsCapital company, in Brookfield, describes as “ever-changing minimum credit score requirements.” The challenge is twofold: lenders across the board have raised minimum scores required to obtain a loan while many borrowers have experienced a myriad of economic setbacks that LaDue says have caused “ripple effects throughout their credit.” The most common setback is unemployment, followed by such issues as a short sale, foreclosure or bankruptcy.
Some borrowers simply don’t understand the degree to which these incidents can harm their credit, adds Julie Flor, a district mortgage manager at M&I, a part of BMO Financial, in Chippewa Falls. The culture of good credit and diminished social stigma associated with financial problems might explain why some borrowers mistakenly believe they can get a new home loan within months after a foreclosure or bankruptcy.
Read on: Why Home Loans Are Hard to Get