The answer is that there really is no "standard" practice. Just as some banks use the LIBOR and others use Treasuries or other economic indicators to set interest rates; different lenders use different practices to determine rates.

And here's the kicker... The "normal" rate from Lender #2 might actually be higher than the rate from Lender #1 even with the extra .5%.

I'd also like to say that Joe The Builder has a good point... You want to be careful to protect your investment. Minnesota law provides plenty of protection for spouses, but not for girlfriends. You may have to take possession as Co-Owners rather than Joint Tenants. And there is a pretty big difference there if something should happen to you or your boyfriend.

In a Co-Ownership situation, if one of the owners dies, their interest in the property passes to his or her heirs and the property goes through probate. In a Joint Tenant situation, if one of the owners dies, their interest in the property automatically passes to the other owner.

Hello Sophiedog,

Are the 820 and 698 your mid-scores or just your Experian scores?

Standard practice for any major lender is to qualify you based off of the mid-score of the lower-scored borrower. As an example, if your boyfriend's scores are 830, 820, and 810 they would use 820. If your scores are 708, 698, and 688 they would use 698. You have the lower mid-score of the two borrowers, so banks will Underwrite and approve off of the 698. You should consider using just your boyfriend for the financing and adding you onto title and deed, thus avoiding any penalties.

To be honest, with a 698 mid-score a .5% bump to your rate is not ridiculous, but also not ideal. Good luck!

Kind regards,

Jason Diperstein
E Mortgage Management
800.793.9633 ext. 156
jdiperstein@emmloans.com

good morning......my suggestion would be to mention to your lender that you won't pay the additional half point, and that you would like to proceed at the origionally quote pricing.....unless he/she would prefer you go elsewhere for your financing......also...almost all lenders do not average fico scores.i actually have a bank here in michigan that does, but they do not do the type of financing that would not apply to your situation.........lastly....don't forget, mortgage rates have been going up, but raising your rate would not be because of credit scoring.....i wish you luck with your deal....bob mcclure- success mortgage partners- plymouth, michigan......

But we both have a high income and 20% down, so its not that we need help financing.

Hi Sophie:

You may also want to look into an FHA loan. It requires 3 1/2% down, but you will have to pay mortgage insurance. Your best information is going to come from a lender that can offer both types of loans - visit: http://www.mnhousing.gov/consumers/home-buyers/index.aspx to find out about mortgage loan programs, money for first time home buyers and lenders that can help you with an FHA loan. Depending on the county and city, there are other programs available, most of these will require home buyer education course(s).