Great question and I am surprised how few ask when shopping for a mortgage. What I am about to type are general guidelines of most lenders, some always have quirks. A score over 740 generally gets you the best interest rate. There are possible rate increases for every 20 points it drops. They are referred to as "hits" in our business. If you have a 700 score you might not get the same rate as if you have a 740. Most banks won't even give the loan if you are under a 620 score. To best determine the rate you deserve you should shop a few lenders who know the MD market very well. I would ask if they can provide you with the score and a copy of the credit report. Remember that interest rate is not driven alone by credit score. Is it a purchase, a condo, how much equity, your planned timeline and more goes into determining a final rate. Shop the rate though is my advice and ask if points are being charged also. If two or three lenders all tell you about the same rate and one comes in much lower it's because he or she is charging points most likely. Nothing wrong with that but it's not a true apples to apples comparison. I give clients quotes with and without points and explain the pros and cons of each. Follow these simple rules and trust but verify the information and you should be OK. Please let me know if I can help in any way.
Best of luck,
Interest rate might be determined by any number of shifting factors or market conditions. Among them may be, amount of current outstanding revolving debt (credit cards and how many). Amount of stated income and your payback history. Debt to income ratio in general.
They also referred to tiers of credit starting with a minimum FICO score. A score of 740 would be a 1st tier credit risk (lowest risk). A score of 730-739 would be a 2nd tier risk (slightly higher risk) and so on 720-729; 710-719 etc. They were also looking for downpayments of 30%-40% which are high of course. They referred to the large DP as a buyer that had "skin in the game." It was never mentioned or asked how this impacts specific pricing though.
Obviously the better your credit score, the better your rate will be. These days, those with a high FICO score might see a rate below 5%. The best way to know what to expect would be to get yourself pre-approved by a Bank loan officer or talk with a Mortgage Broker in your area. Good luck.
Let me know if you have more questions or if I can make any more recommendations for a loan company.
i know several lenders who are fair and reasonable if you need any recommendations. please email me separately.