What's the minimum credit score to have for the best mortgage rate?

Asked by Andrew Wilkinson, San Francisco, CA Mon Feb 27, 2012

Answers

11
Robert Robbi…, , Atlanta, GA
Mon Feb 27, 2012
Bill,
Yes, in a way we are. The difference can be large for someone with a 620 score who might be looking at 4.0 points or more of adjustments or = to 4% of additional pricing to something around .25 points for a 720 vs a 740.
If this was a 200k loan the 620 borrower can obtain the exact same rate as the 740 borrower but would have to pay 8,000 more in cost to do it on a convetional loan where as the 720 borrower would only pay $500 to get the same.
This is where FHA comes in, a 640 borrower is not penalized the same as a conventional loan would. FHA would only charge .25 points for the 640 score or $500 for not having the highest scores.
I will walk my customers through the rate sheets to show them (along with their credit report) where they would be priced on a given rate or program(FHA vs Conv) and let them make their own decisions as to what is in their best interest.
There is always a happy medium between Rate and Price(Closing Costs)

Let me know if there is a specific scenario you need help with.

Best Wishes,
Rob

Rob Robbins
Senior Mortgage Consultant
Cornerstone Mortgage Group
6151 Powers Ferry Road NW
Suite 610 Atlanta GA 30339
Office 678-578-7613
rrobbins@cmghl.com
Cell 404-932-5353
1 vote
Laquita Baez, Agent, Atlanta, GA
Mon Feb 27, 2012
Andrew it all depends on the type of loan you are trying to secure as they may have different score requirements....
Web Reference:  http://www.LAQUITABAEZ.com
1 vote
Elliott R. O…, Agent, McLean, VA
Mon Mar 5, 2012
You will get the best opportunity for the lowest rates when your scores are above a 740+ as that is the last threshold for improvement.
0 votes
Kawain Payne, Agent, Seal Beach, CA
Mon Mar 5, 2012
Hello Andrew,,

In today's market a score of 730 will yield you a good rate on a conventional loan.

To get the very best prevailing rate you should have a score of 750 or higher. Of course this can vary from lender to lender. Lenders want minimum risk. The lower the buyer's score the greater risk he/she presents to the bank.

FHA/ VA and other govt. loans will not require such high scores to get thier best rates.

Best of luck to you,

Kawain Payne, Realtor
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Mon Feb 27, 2012
I agree with Robert, the difference on a conventional loan between 700 and 740 can be as much as ¾ of a point, this is a closing cost, not a higher rate. The rate would be the same, but the closing cost would be higher. Or if you kept the closing cost the same the rate would be higher so in my book the best rate is 740 and up. I linked the most recent Fannie Mae Matrix below if anyone wants a copy. The credit score adjustments are on page 2.

I also let my borrowers see the rate sheet and the tier adjustments.
0 votes
Bill Eckler, Agent, Venice, FL
Mon Feb 27, 2012
Interesting....we seem to be all over the place. A Wells-Fargo mortgage agent quoted me Saturday that for the best rates a score of 700 was necessary. Is it possible that we all could be correct?

Bill
0 votes
Robert Robbi…, , Atlanta, GA
Mon Feb 27, 2012
The reality is you only need a 640 for FHA who is not credit driven the way Convetional loans are. Right now unless you plan to put 20% down, you are going to be able to get a phenominal rate with FHA. My typical 640 borrower has been able to get a 3.75% 30 year fixed rate FHA loan with 0 closing costs. If you are able to put 20% down to avoid PMI then I suggest going Conventional and needing around a 720+ score.

I hope this has been helpful.
Best Wishes,
Rob

Rob Robbins
Senior Mortgage Consultant
Cornerstone Mortgage Group
6151 Powers Ferry Road NW
Suite 610 Atlanta GA 30339
Office 678-578-7613
rrobbins@cmghl.com
Cell 404-932-5353
0 votes
KW Turtle Gr…, Agent, Decatur, GA
Mon Feb 27, 2012
It really just depends on what type of loan you are looking for. If you want to go the FHA route with a 3.5% down you should be 720 or higher. If you are going conventional loan you typically get a better rate with a 740plus create score.
Web Reference:  http://chucksmithgroup.com
0 votes
Timothy Brown, Mortgage Broker Or Lender, 30303
Mon Feb 27, 2012
Andrew,

This depends on three factors: 1) loan program 2) credit score and 3) loan as a percentage of value.

For "government" loan programs (FHA, VA, USDA) 720 is the credit score at which you get the best interest rate. The loan as a percentage of value is not critical.

For conventional loans (Fannie Mae, Freddie Mac) the minimum credit score for the best rate is 740 with a down payment of 25%.

Finally, for jumbo loans, usually rates will be best above a 780 with 25% down.

Hope this helps!


Timothy Brown
LPO Manager | Evolve Bank & Trust
11605 Haynes Bridge Road Suite 125| Alpharetta, GA 30009
tbrown@getevolved.com
678.468.5626 x110 | fax 678.935.1156 | cell 678.467.9959
NMLS#: 168281
0 votes
Adrian Provo…, Agent, Atlanta, GA
Mon Feb 27, 2012
Rodney is correct. It's going to depend on the loan program. Usually at least a 740 for conventional loans and at least a 720 for FHA loans*
0 votes
Rodney Mason, Mortgage Broker Or Lender, Atlanta, GA
Mon Feb 27, 2012
It all depends on the loan program. For conventional mortgages backed by Fannie Mae/Freddie Mac, it will be a 740+ FICO. FHA, VA, and USDA and typically at 720+ for the best rate.
Web Reference:  http://www.rodneymason.com
0 votes

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