December 21, 2009

When I speak with clients looking Bellevue mortgage rates they are often confused when I ask for their credit score. Now, more than in the past, credit scores below 740 can have a big impact on interest rates or Closing Costs. If you have not looked in to a loan in the last 2 years, you may be surprised how different things are now.

It used to be a credit score of 680 or higher would give you access to the best interest rate pricing. After the mortgage melt down in 2008 most lenders tightened their guidelines an implemented new standards. The conforming loans issued by Fannie Mae and Freddy Mac have a schedule of fees associated with the loan to value ratio of the loan amount and the borrower's middle of the 3 credit bureaus. Additional fees start to become applicable below a 740 credit score. Another schedule of fees apply to credit scores between 739 and 720, higher fees for 719 and 700 and higher yet fees for lower scores. By the time you get to a 680 score the fees can be quite high. Fannie Mae just issued new guidelines that require a 620 credit score.

FHA loans have credit score requirements which are much more liberal. We have access to FHA loans with a 600 score but there are pricing penalties for scores below 640.

Now more than ever, it is important for those seeking a Seattle mortgage loan that they consult with us long before it is necessary to lock an interest rate. It is possible for us to help increase a borrower's credit score in a week with cooperative creditors. Raising a credit score can lower your rate or closing costs significantly. Call us for a free consultation.