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Credit Scores And The Relationship To Interest Rates Offered

August 30th, 2014

Do you REALLY know the effect credit scores can have on the mortgage rate for which you can qualify? The highest credit score category is 740+, and the categories below are in 20 point drops, like 720-740, and down to 620-640 for Conventional Fannie Mae and Freddie Mac loans. If you are doing a loan for more than 15 years ( 20,25, or 30), a chart is used to determine how much extra costs are added to the rate, or closing costs if you would rather pay the extra fees. For example, a Borrower putting down 5% ( 95% LTV) and having a 740+ score would incur .250% extra, where as a Borrower witha 620-640 score would incur 3.250% extra added to the deal. On a $100,000 loan this would be $250 for the 740+ Borrower and $3250 for the 620-640 Borrower. If adsorbed into the rate instead of paying the difference in cash, this would result in a .500% rate increase for the loan. And IF the loan was a refinance and involve getting cash or paying off a 2nd mortgage, additional fees would be involved based on the credit score category....HENCE , it is so important to  get your credit scores as high as possible, or to consider a shorter mortgage term. A good Mortgage Broker and Realtor can discuss options with you that can help you get the best deal possible. For fair treatment and education give us a call-Diversified Mortgage Brokers, Tel: 434-237-3143, Email: www.dbi4009@aol.com, Web: www.diversifiedmortbrokers.com . WE EDUCATE & DELIVER!

Diversified Mortgage Brokers

100 Copley Place, Suite D, Lynchburg, Virginia 24502
Toll Free: 800-388-3561 | Phone: 434-237-3143 | Fax: 434-239-4852
Email: dbi4009@aol.com | NMLS ID# 188675 (www.nmlsconsumeraccess.com)
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