How Lenders Quote Mortgage Rates Versus Credit Scores

This BLOG On How Lenders Quote Mortgage Rates Versus Credit Scores Was UPDATED On July 6, 2017

How Lenders Quote Mortgage Rates Versus Credit Scores:

  • The higher a borrower’s credit scores are, the less riskier the borrower is.
  • This is how lenders view borrowers with higher credit scores.
  • There is a pricing adjustments on Mortgage Rates Versus Credit Scores.
  • Lower credit score borrowers are considered higher risk so lenders charge more on mortgage interest rates.
  • Every mortgage lender has different credit score requirements for a mortgage loan borrower depending on the mortgage loan program.
  • FHA Guidelines on Minimum Credit Score Requirements to qualify for a home purchase loan with 3.5% down payment is 580 FICO credit scores. 
  • Conventional Loan lending guidelines require a minimum credit score of 620 FICO credit scores. 
  • The 620 FICO requirement is not HUD Guidelines but lender overlays.
  • HUD only requires a 580 FICO credit score to qualify for a 3.5% down payment FHA home purchase loan.
  • The lower your credit scores are, the higher your mortgage rates will be. 
  • The lower your credit score is, the higher risk you are in the eyes of the mortgage lender.

Assessing Credit For Best Chicago Mortgage Rates?

The majority of mortgage lenders have minimum credit score requirements for a mortgage loan of 620 FICO or higher.

  • Most banks minimum credit score requirements for a mortgage loan is a score of 640 FICO from a mortgage loan borrower.
  • However, mortgage loan borrowers who have credit scores under 600 FICO and prior bad credit can qualify for FHA Loans.
  • The Gustan Cho Team are experts in helping mortgage loan borrowers with prior bad credit, bankruptcy, foreclosure, collections, and for borrowers with credit scores under 600 FICO.
  • We also have no lender overlays on government and conventional loans.
  • Large percentage of our borrowers have high debt to income ratios.

Better Credit Score = Better Chicago Mortgage Rates

One late payment on a credit card or automobile loan payment can plummet credit scores by at least 50 points or more.

  • Mortgage lenders are very finicky when it comes to credit scores. 
  • Minimum credit score requirements for a mortgage loan vary from mortgage lender to mortgage lender. 
  • As stated earlier, the majority of the bank’s minimum credit score requirements for a mortgage loan is 640 FICO. 
  • Borrowers with credit scores down to 580 FICO can qualify for FHA Loans.

How Can Gustan Cho Help Obtain Great Chicago Mortgage Rates?

If you have had prior credit problems due to unemployment, divorce, bankruptcy, foreclosure, collections, or medical problems, I can help you if you are looking for a mortgage loan in Florida or Illinois.

  • I can help mortgage loan borrowers with a credit score as low as 530 FICO.

Minimum Credit Score Requirements and Down Payment to Qualify for a Home Loan with Bad Credit

If you only want to put down 3.5% on a home purchase, the minimum credit score requirements for a mortgage loan is a credit score of at least 580 FICO.

  • For those mortgage loan borrowers with a credit score between 500 FICO and 580 FICO, the minimum down payment required is 10%. 
  • Home buyers with credit score below 580 FICO can qualify with 10% down payment.

Home buyers who are looking to get qualified with a lender with no lender overlays, please contact us at 1-800-900-8569 or email us at gcho@gustancho.com  

2017 Update on this mortgage blog post

This mortgage blog post has been update on July 6, 2017

Gustan Cho, NMLS ID 873293
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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