Changing Rules in Obtaining Mortgages/Credit Scores Count
Here is some information from a blog we like to read from LeRoy Houser, an outstanding educator and realtor from Virginia.
“Credit Score = It’s becoming evident that an applicant with a good credit history and a high credit score will get a more favorable interest rate than a person who has had credit problems. This is a WIP that we all need to be concerned about. Here is an example offered by the Fair Isaac Cooperation (FICO) which is worthy of passing on to your customers and clients.”
Consider a couple who is looking to buy their first house. Let’s say they want a thirty year mortgage loan and their FICO credit scores are 720. They could qualify for a mortgage with a low 5.5 percent interest rate*. But, if their scores are 580, they probably would pay 8.5 percent interest or more–that’s at least 3 full percentage points more in interest. On a $100,000 mortgage loan, that 3 point difference will cost them $2400.00 a year and $72,000 over the life of the loan. Your credit scores do matter.
*Interest rates are subject to change. Number used as an example