Kansas City Real Estate Thoughts...
If your FICO credit score stinks then the interest rate you'll get on a loan will stink too. We all know the end result of a higher interest rate is a higher monthly mortgage payment and that's not something any of us want. So you should keep an eye on your credit reports and also on your FICO score. Think of your FICO score as a summary of all the rigmarole contained in your actual credit reports. It certainly carries a lot of weight with lenders when they weigh the risks involved in providing a loan to a borrower.
The following chart will help put the importance of your FICO score into perspective. It shows the difference in monthly payments a borrower could expect to pay based on their FICO score. I used a tool found at the My Fico web site and entered in $200,000 as the loan amount and chose the 30 year fixed rate mortgage option as my parameters. Here are the results...
FICO Score | Resulting APR | Monthly Payment | 760-850 | 5.860% | $1,181 | 700-759 | 6.082% | $1,210 | 660-699 | 6.366% | $1,247 | 620-659 | 7.176% | $1,354 | 580-619 | 9.205% | $1,639 | 500-579 | 10.195% | $1,784 |
Our readers are welcome to comment below.
| |
|