Credit Scores

Darrell Davidson · Joined: 25 Apr 2005 Posts: 6 Location: Fountain Hills, AZ

I'm curious as to how much one could save on a loan for 200k with a 625 mid as opposed to a 575 mid and what factors would influence that besides credit score.

BECCA9892003 · Joined: 20 Jan 2005 Posts: 400 Location: Altoona, PA

you would be looking in most cases as a 2% difference...575 gets you sub-prime while a 625 gets you conforming which means a much better product....as far as the rest goes it is mostly the same with income,rental or mortgage history and length of employment...

Alex · Posted: Thu Apr 28, 2005 11:05 pm Post subject:

I would think LTV would be a factor

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

ltv would be a huge factor, but 2%+ for sure.

Darrell Davidson · Joined: 25 Apr 2005 Posts: 6 Location: Fountain Hills, AZ

so with 2%, how much would someone save on a loan for 200k over say 5 years?

The Big Easy · Joined: 20 Jan 2005 Posts: 30

Using beccas example:
$200,000 @ 5.50 @ 30 year term = Principal & Interest of $1,135.58.
$200,000 @ 7.50 @ 30 year term = Principal & Interest of $1,398.43.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Or if you wanted to get even crazier, you could look at it as 7.5% for 24-36 months and then a refinance then at whatever current market rates are plus the additional closing costs.

Can be an expensive transaction.

Darrell Davidson · Joined: 25 Apr 2005 Posts: 6 Location: Fountain Hills, AZ

So according to Big Easy's calculations, one could save over $1000 in just the first year with as little as a 1% difference in interest, right?

Jenie0109 · Joined: 27 Jan 2009 Posts: 307 Location: chicago IL

Thanks for the post and for the replies. I learned a lot.

juliasmith · Joined: 18 Aug 2009 Posts: 2

Thanx for the info

Josh Harmatz · Joined: 08 Sep 2009 Posts: 18

Another good option would be to think about an FHA loan they have great loans for homeowners with a 625 credit score.

JPowell · Joined: 20 Jan 2010 Posts: 103 Location: PA

Josh Harmatz wrote: Another good option would be to think about an FHA loan they have great loans for homeowners with a 625 credit score.

I thought FHA loans only required a 580... With a 625 do they just offer better rates?

I'm still a little new to the home buying market, but I'd like to start looking soon. Renting is terrible!

Sahmama24 · Joined: 19 Jan 2010 Posts: 26 Location: Delaware

When my husband and I started our home mortgage process his score was 580. We went through a broker who got it up to 620-625 and we got a fixed 30 year of 6.675%. We also had to pay points.

JPowell · Joined: 20 Jan 2010 Posts: 103 Location: PA

Sahm, when you say "pay points" what does that actually mean? I'm not familiar with the term since I haven't started searching for a home yet but I'm really curious since I've seen it used a few times.

imenacedk · Joined: 20 Feb 2010 Posts: 6

JPOWELL,

-Points is the % you give the mortgage broker/banker.

-Better credit score does help getting better rates but there are other factors as well. When a broker/banker looks at your application we have something called (adjustables) meaning we have a interest rate in mind and now we have to start subtracting our payout cause your credit score isnt par, its more then a single family house, a condo, you have too much debt, and etc. If our pay is too little or negative we have to give you a higher interest rate.

JOSH,
-FHA is a good option but keep in mind the larger closing cost and PMI

DARREL:
-When applying for a loan credit score is a big factor but we also have to look into your past 2 year emloyment, salary, your debt, Loan amount, Value of House, Your spouse (or co borrow information), type of house (single, 2 fam, etc) These all play a important factor and could stop you from getting a loan you want.

	Mortgage Forums Forum Index -> Learning Center	Goto page 1, 2 Next
Page 1 of 2