It is so important to know about your credit score and what it can or can not do. below please find a very interesting post. It gives you a good feeling for the differences in scores.
It's not just banks and lenders that rely on credit scores to help make important credit decisions. Landlords, employers, insurance companies, and even cell phone and other utility companies all reportedly utilize credit scores to help determine their business and credit relationships with consumers. This means that your credit is the most important component of your entire financial portfolio. Because of this, monitoring and managing your FICO score is vital, especially if you're looking to buy or refinance a home anytime in the near future.
The FICO scoring system was created in the 1950s by Fair Isaac Corporation and has been the standard for lenders since the 1980s. FICO credit scores typically range between a low score of 300 and a high score of 850. Under the FICO system, securing credit becomes less expensive for borrowers with higher scores (those who represent the least risk) and more expensive for borrowers with lower scores (those who represent the most risk). In fact, when it comes to a mortgage, a lower credit score could easily cost a consumer hundreds or even thousands of dollars more in interest every month and throughout the life of the loan, compared to the same loan with a higher score.
FICO Scores APR Monthly Payment Total Interest Paid 720-850 5.038% $1,617 $282,278 700-719 5.163% $1,640 $290,574 675-699 5.700% $1,741 $326,832 620-674 6.850% $1.966 $407,680 Below 620 N/A (1) Source: Myfico.com (30 year fixed-rate mortgage on $300,000) as of March 11, 2009
(1) People with these scores aren't usually accepted for this type of loan.
The above chart from MyFico.com clearly reveals the relationship between higher FICO scores and lower interest rates and monthly mortgage payments. Of course, interest rates are determined by many factors but the bottom line is that individuals with low credit scores will pay nearly three times more in interest than those with strong credit scores.
Now You Will Also Be Subject To Loan Level Price Adjustment Fees (LLPA’s) when applying for a conventional mortgage.
In addition to higher interest rates, having less than a 720 in today's credit environment can also cost you up to 3% in points or an increase in your interest rate! Here’s the chart based on an 80% LTV:
FICO Score LLPA You Will Pay Below 640 3.000% 640-659 2.750% 660-679 2.250% 680-699 1.000% 700-719 0.500%
LLPAs are mandatory surcharges based strictly on credit scores. They are additional fees paid to Fannie Mae or Freddie Mac, not your mortgage professional. Analysts suggest that imposing these "penalties" is a blatant effort to recoup - and to help lessen further losses - on foreclosures. The surcharge could mean thousands of dollars for borrowers who do not monitor and maintain a good credit rating.
For people experiencing the worst-case scenario, carrying a middle credit score of less than 620 could cost you an extra $9,000 upfront on a $300,000 loan amount.
If you're thinking about buying, selling, or refinancing a home, you have to be credit ready. Give us a call today for a free credit consultation. We'll pull your credit and see where you stand. Remember, effective credit repair, if necessary, could take up to 3-6 months, so act now and be credit ready in no time.
Stay tuned for more great credit tips!
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I love to cook and people always want my "recipe" well, I do not have recipes. Usually I do not even know what I cook till I get to the store, look around and buy what looks appealing. So, the other day I saw cucumbers and I LOVE cucumber salad in all different forms. Today we will add Mango to the mix. It takes about 10 minutes to make a salad for 4 people and it is really easy and no big mess to clean up.
cucumber, whatever sickness you prefer add about ½ of a Mango. A few table spoon of oil and vinegar a little bit of pepper, salt and dill and don't be shy on the sugar. Slice and dice (very fine) about of teaspoon of fresh ginger mix it all together and let it sit in the fridge for 30 minutes, taste one last time, make adjustments and serve.
This is a typical view of all the windows. We waited for a nice cold morning, and outdoors it was about 20F when we began this inspection.
First I went to the garage. The images are taken from the garage door. They look at the garage ceiling.
Next I went to the bedroom.
We had a great time. I just love Bellini's, this place has it all. To start with it is absolute beautiful, the music is great, the service is friendly, drinks are very affordable and it has that welcoming cozy feeling to it.
