Real Estate buyers still don’t understand the impact of FICO scores.
To understand how FICO scores impact a home buyer in West Chester, Fairfield or Cincinnati today- look at the numbers from myFICO.com:
A home buyer financing a $200,000 30 year fixed mortgage with a FICO Score between 500-579 will pay $502 a month more than the buyer with a FICO Score between 760-850.
myFICO.com has a wealth of information and tips for today’s home buyers and if are unsure about your FICO- set aside some time to work your way through the site.
Buyers, even ones with excellent credit scores need to “shop smart” for mortgages:
The best way to protect yourself from paying to much for a loan is:
Use a reputable lender (if you need the name of my favorite one- call or email). Good lenders have a wide variety of loan options available which is a win/win for buyers
FICO Scores- know your score before you start house hunting. If you are not sure, the loan officer, your banking institution or credit union may be able to assist you.
Shop rates- but understand how to compare “apples to apples”. Many times fees are not properly explained and the “lower rate” ends up costing more. (that is why using a reputable lender is so important).
Understand the consequences of locking or floating your loan rate. Many borrowers speculate that rates will drop during before the closing date- so they allow the loan rate to float- only to find out the rate actually went up. If your financial boat will sink with a higher payment- lock the rate at the time you apply for the loan.
Many things impact your FICO score. For example if you’ve been thinking about buying a home or a car and made repeated inquiries (not in the last 30 days) about loan amounts- this will impact your score. Other activities that impact FICO are financing purchases of large items (washer/dryer) , opening new credit card accounts and leasing a new car or truck.
Need help or direction- or the name of a great lender- just send an email or call.