How credit score affects your mortgage rate
Q: I am told that with a higher credit score I can get a better interest rate on a mortgage. If this true then by how much. I am looking into a FHA loan.
A: Credit score affects your mortgage rate, that is correct. While there are lower interest rates on FHA or VA (veterans and active military) loans for borrowers with high credit, they are not always passed to them. You should always ask your lender for the best rate. The savings won't be large, but hey, every dollar counts.
- if your middle credit score falls within 660 and 619 range, expect nothing better than an ongoing mortgage rate
- if your score is between 620 and 659, you will likely get an interest rate that is by .25% higher
- but for the scores between 720 and 759, you may get interest rate that is by .125% lower
- and if your credit score is at 760 and higher, you can try to lower the quoted rate by .25%
The key is to know ongoing FHA interest rate. For this do some research on Internet, but also call lenders. You can get a better deal if you use FHA approved mortgage broker who deals with many lenders. See also minimum credit score for mortgage.
Wed May 20, 2009 04:05PM by Tony | More in Mortgage | Comments (0)
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