Credit Scores In The Mortgage Process
Credit Scores In The Mortgage Process:
Credit Scores In The Mortgage Process And Loan Programs
Various different mortgage loan programs have different minimum requirements of credit scores . For example, the minimum credit scores required for a FHA Loan is 580 FICO for a 3.5% down payment home purchase home loan. Minimum credit scores for a conventional loan is 620 FICO for either a 3% down payment or a 5% down payment home purchase conventional loan. Minimum credit scores required for a jumbo mortgage is 700 FICO credit scores for a 80% loan to value jumbo mortgage loan. There are 90% loan to value jumbo mortgage loans available, however, a 740 FICO credit score is required. If you are a home buyer interested in a specific mortgage loan program, you need to plan ahead and make sure you qualify with regards to minimum requirements with credit scores.
Credit Scores In The Mortgage Process And Mortgage Rates
Your credit scores will have the greatest impact on the mortgage rates you get quoted. You can shop for mortgage rates all you want but the chances are you will not get a low mortgage rate on a home loan if your credit scores are low or you meet the bare minimum credit score requirements for a specific mortgage loan program. To get the best mortgage rates on a conventional loan, you need a 740 FICO credit score.
Other Factors Besides Credit Scores In The Mortgage Process That Affect Mortgage Rates
There are other factors that affect mortgage rates besides credit scores. The loan to value will affect mortgage rates. The more amount of down payment you put down on a home purchase the lower your mortgage rates will be. The more down payment you put down on a home purchase means that the mortgage lender has less risk and therefore they will give you a lower mortgage rate. Higher risk loans means higher interest rates. Lower risk means lower mortgage rates.
Other factors that affect mortgage rates besides credit scores are occupancy types. To get the best available mortgage rates, the owner occupied and second home properties types are it. Investment home mortgage loans have higher mortgage rates than owner occupant homes due to risk factors. Mortgage lenders feel if things go wrong with the mortgage loan borrower financially, they are less likely to bolt on their own owner occupant property than they would on an investment home. Two to four unit properties have higher mortgage rates than a single family home. Condominium mortgage loans have higher mortgage rates than single family homes.
Credit Scores In The Mortgage Process Fluctuate: Which Credit Scores Will Lender Use?
Credit Scores will fluctuate month to month and will fluctuate during the mortgage loan application and mortgage loan approval process. Mortgage lenders will use the credit scores that was submitted with your mortgage loan application to the mortgage lender’s processor. This credit score will be used throughout the mortgage loan application and mortgage loan approval process until you get the clear to close. If the credit scores drop during the mortgage approval process, it does not matter since the original credit scores that was submitted will be used throughout the whole mortgage process. The credit scores will be good for 120 days. If you do not close your mortgage loan in 120 days, a new credit report will need to be pulled and the new credit scores will need to be used.
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