My wife and I just had our credit reports run by our mortgage broker, and I was expecting us to be in the 760-770 range, but our median score is 755. I’ve read that 760 is the cutoff for the best rates. Could those 5 points really make a difference? I know other factors also affect rates, but we won’t meet with our broker until after the holidays, so I’m a bit disappointed right now.
Yes, you’re overreacting. What was your score before? Different models can vary. A score over 750 is still considered excellent. The difference in terms of rates will be negligible.
Bryce said:
Yes, you’re overreacting. What was your score before? Different models can vary. A score over 750 is still considered excellent. The difference in terms of rates will be negligible.
Consumer credit scores are often different than mortgage scores. The ones you see for free are usually higher. If you’re over 750, you’re in a great position.
@Sloan
Exactly, those scores are just a general guide and are usually higher than your actual mortgage scores. If you’re over 750, you’re worrying too much.
My partner’s score was 745 and mine was 765. We found that the impact on our rate was either negligible or non-existent, depending on the lender. You might see at most a 1/8th of a percent difference in interest rates.
@Lane
That’s right. The difference might just be a small adjustment in points or rebates, unless you need your wife’s income to qualify.
755 is a great score. Don’t worry at all.
If you’re not applying for a jumbo loan (over $650,000), the difference is minimal. Even with jumbo loans, a score above 760 doesn’t necessarily put you in the highest tier. The rate difference is less than an eighth of a percent, which is minimal.
@Caden
We’re looking at a $350k house, so hopefully, we’re still getting one of the lowest rates available. Our debt-to-income ratio with this loan would be around 25%.
When couples apply for a mortgage, lenders usually use the lower of the middle FICO scores from each person. They pull six scores because there are three credit bureaus and two applicants.
Harley said:
When couples apply for a mortgage, lenders usually use the lower of the middle FICO scores from each person. They pull six scores because there are three credit bureaus and two applicants.
Exactly, my middle score was 779, and my wife’s was 755, so they’re using her score. I’m just concerned about not hitting that 760 mark I keep reading about.
@Nova
You can ask your lender if they have any pricing incentives for scores above 760. If they do, and your score increases closer to closing, they can use the higher score. Just be aware, if it drops, they’ll use the lower score.
@Nova
Don’t worry about hitting a specific ‘magic’ number. The rates are still going to be very competitive with your scores.
@Nova
There are different types of FICO scores used for mortgages compared to what you usually see online. You’re nearly at the top pricing tier anyway.
@Nova
The rate difference will be minor. Often, brokers can offer advice on quick improvements to your credit score if needed.
@Nova
At worst, you might get a slightly higher rate or a different rebate offer, but it’s going to be a minimal difference.
Working with a broker usually saves you more than worrying about a few points on your credit score.