Buying a New Home? Credit Scores can Impact Your Interest Rate.
"How come I get the same rate as someone who doesn't pay their bills on time"? In my 25 years as a mortgage consultant, I have heard that question many times. As fair as that statement might seam it has now become a reality. Lenders have now begun to price their loans according to the credit score. This applies only to conventional mortgages and not to FHA loans.
Called Risk based pricing; it can change your rate by as much as a full percentage point. One of the ways to get the best rate you can is to work with lenders who have the computer software to analyze your credit report to see if their is something you can do to increase your score. Sometimes it may be as simple as paying down a $500 line of credit to $250. Moving your score from a 639 to a 640 can save you as much as $750 annually on a $100,000 mortgage.
It takes a lot of work on the part of your mortgage consultant, so if he or she is not willing to put in the effort then find another mortgage company. Remember what your Mom and Dad said to you when it was time do your homework, "There's nothing wrong with a little hard work. In the long run it always pays off". It can help lower your mortgage payment too.
Date: Monday, November, 3rd 2008 @ 12:34:46 PM
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