According to data gathered by mortgage rate origination tool Mortgage Marvel, California mortgage applicants have the highest credit scores in the nation. The industry leader recently conducted a state-by-state study of credit score trends in relationship to mortgage seekers. Residents of the golden state have the highest average credit scores in the nation at 755, a full twenty points above the national average of 735.
This is great news for the fizzling California real estate market, as lack of qualified mortgage applicants is considered to be one of the factors preventing a rebound in the local market. As a result of the mortgage meltdown, lenders have tightened their rules in response to approving mortgage applications and the best mortgage rates are generally reserved for individuals who have credit scores above the 700 mark.
About the Study
Mortgage Marvel researchers analyzed more than 340,000 loan applications received by Mortgagebot's (Inc. 500 Company providing direct-to-consumer, Internet-based loan-origination solutions) client list in 2010. The credits scores were gathered from reviewing the demographics for applicants of traditional home loans, construction and home loans including those from the Federal Housing Administration (FHA) and Veterans Association (VA) loans. Information for applicants of home equity loans and home equity lines of credit (HELOC) were not part of the equation.
Not only did Mortgage Marvel's research indicate the startling findings in regards to California, the statistics also showed that mortgage applicants throughout the West (including California, Hawaii, Oregon, Washington, Montana, Colorado, Utah, Idaho, Alaska, Nevada and Wyoming) had the highest average credit scores of 747.
Lowest National Credit Score
The data also revealed that Mississippi mortgage applicants had the lowest average credit score of 695. This information is an additional blow to the area's local real estate market as a credit score of over 730 is considered to be one of the magic numbers essential for qualifying for a mortgage.
The state is currently dealing with the hardships surrounding the BP oil spill as that tragedy has reportedly reduced local Mississippi home values by an additional 30 percent. That price cut is on top of the declines experienced as a result of the national mortgage meltdown plaguing the nation. According to an analysis conducted by CoreLogic, Mississippi beachfront properties are the hardest hit by the oil spill. CNNMoney.com has estimated that Mississippi properties are expected to shed a total of $1.2 billion in value for an average of $56,000 per property.
Findings Show California is Still Golden State
Rick Allen, Mortgage Marvel's Product Manager, is startled by the results because of the real estate industry news coming out of California, "...I would have expected it to be well down the list. Many Californians have clearly figured out how to weather the financial storms." This recent news is just an additional boost to California's status of being the Golden State, however, it is not the only insight contributing to the trend.
Despite news of California being home to the nation's third highest unemployment rate (12.4 percent, Employment Development Department, December 2010) California tops the list as being one of the most desirable places to live in the United States. Harris Poll, conducted its annual research focusing on the question "If you could live in any state in the country, except the state you live in now, what state would you choose to live in." 2010 marked the seventh consecutive year that California topped the list.
Even as California is being subjected to deep budget cuts and the LA Times prediction that the local economy is being hindered by a "sluggish job market", the healthy credit scores of Californians is providing a glimmer of hope within the local real estate market. Californians who have the steady income and the down payment amount needed to buy a home are encouraged to act now. Throughout the state there are plenty of discounts on properties, and mortgage rates for traditional 30-year fixed rate mortgages are still well below the 5 percent point. Mortgage Marvel invites all California mortgage seekers to tap into the power of our rate origination tool in order to find up-to-date mortgage rates quickly and without requiring any personal information.
