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Credit Score Maximization Program This is a key area where home buyers really lose a lot of money, a LOT of money. The Government thru Fannie Mae, Freddie Mac and Ginnie Mae (the three biggest purchasers of mortgages) have dictated to Wall Street and the Banks (with the guidance from Wall Street and the Banks) what lending guidelines need to be for them to be able to sell their loans to Fannie, Freddie and Ginnie. Ok, that’s probably a little too technical. Sorry, just trying to give you some background on what is happening. Basically, the lending guidelines have been centered heavily on credit scores. For instance, in 2006 Fannie and Freddie had a base line credit score to get the best rates of 660, today that number is 740. On a $180,000 loan today you might get a 5.125% 30 year fixed rate with no extra fees with a 740 credit score where if you had a 660 you might have to settle for a 5.75% rate or pay a 2.5% extra fee. For example, take an $180,000 loan you would either have to pay $4,500 in additional fees to get that 5.125% rate or pay a $70.35 higher payment each and every month at a 5.75% rate. That would mean you would have paid an extra $4,221.07 in 5 years, $8,442.14 in 10 years, $12,663.21 in 15 years and $25,326.41 in 30 years. Isn’t that pretty significant? The difference between 739 and 740 could mean an additional fee of $450 on an $180,000 loan. That’s right, just one point on your credit score could cost you $450 on an $180,000 loan. Are you beginning to see how important maximizing your credit score is to buying a home. This is a big reason we say that the earlier you get to us, even years before you are ready to buy, the more we can do for you. As this is written FHA has a base line credit score of 660. So at 660 and above you can get an FHA loan that doesn’t have any price hits or higher rates. They say they will go down to a 560 credit score, but I don’t know of any lenders that actually do them. One lender charges an extra .250% fee ($450 on $180,000) if the score is 640-659, .375% for 620-639, 1.000% from 580-619 and 2.000% from 560-579. You could also have an option of taking a higher rate instead of paying that additional up-front cost. Either way, you are paying more if your credit score isn’t above a 660. Plus you could possibly even get a little better FHA rate with a higher credit score, usually above a 720. The bottom line is this: “It would be worth it to hire our firm just to maximize your credit score.” The fact is that this is just one of the many ways we protect you, save you money and make sure you are doing what is in YOUR BEST INTEREST. If you are interested in setting up a Home Buying Planning Session please pick up the phone NOW and call Kurt Jackson at 816.582.5532 or email us here. |
Credit Score Maximization Program |
