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High Credit Score = Low Mortgage Rate
Credit scoring was developed in the 1960s as a means to determine whether or not consumers were likely to repay their loans. The score ranges from 350 to 850 with a higher score being extremely favorable. Essentially, a high credit score translates into lower interest rates for the borrower.
There are five factors that comprise the credit score. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. This gives the lender a snapshot of an individual's sense of financial responsibility and ability to pay back loans.
There are many quick tricks to improve the credit score, and I can provide borrowers with more information on this subject. If necessary, I guide them to a reliable resource for credit remediation. If a borrower has to pay a higher interest rate to close a loan, the tarnished credit rating will begin to improve once mortgage payments are made on time and in full. If that is the case, my team and I will be on the watch to alert the borrower when an opportunity arises to refinance and get a lower interest rate. | Mortgage Interest Rates* | Rates as of Tuesday, 31st January, 2012: | | Term | Conforming | APR | Payment per
$1,000 | Jumbo | APR | Payment per
$1,000 | Arm Reset Term | 30 Year Fixed | 360 | 3.875% | 3.932% | $4.70 | 4.625% | 4.652% | $5.14 | - | 15 Year Fixed | 180 | 3.250% | 3.351% | $7.03 | 4.000% | 4.047% | $7.40 | - | 7 Year ARM | 360 | 2.875% | 2.929% | $4.15 | 3.500% | 3.526% | $4.49 | 84 | 5 Year ARM | 360 | 2.625% | 2.678% | $4.02 | 3.250% | 3.275% | $4.35 | 60 | 30 Year Fixed FHA | 360 | 3.875% | 3.932% | $4.70 | N/A% | 0.000% | $0.00 | - | 30 Year Fixed VA | 360 | 4.000% | 4.058% | $4.77 | N/A% | 0.000% | $0.00 | - |
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*Rates are subject to change due to market fluctuations and borrower's eligibility. Payment amounts do not include amounts for taxes and insurance. Actual payments will be higher.
For professional use only. Not intended for consumer distribution.
| *This information is not intended to be an indication of loan qualification, loan approval or a commitment to lend. It is also not a quote of guaranteed interest rates or closing costs. Interest rates can change daily until your rate is locked in. Rates are based on primary residence, 70% LTV, purchase of a single family residence, with escrows for taxes and insurance, middle credit score of 740 or above, and 30-day lock period. Other limitations may apply. | |
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