A recent article in Kiplinger’s Personal Finance magazine entitled, “How to Shop for a Mortgage Today,” by Pat Mertz Esswein, discusses the new lending environment in the mortgage market. In general, it touched on the major changes that will be affecting homebuyers. However, one specific point stood out that illustrates the importance of an improved credit score, as well as, the impact on monthly payments:
Is it worth waiting to buy until I can improve my credit score?
“Probably. The average rate on a 30-year fixed-rate mortgage is typically at least 1.5 percentage points lower for someone with a credit score of 760 to 850 than for someone with a score of 620 to 639. On a $216,000 loan, a borrower with a top-tier score would pay $232 less per month -- a saving of $2,784 per year -- than a borrower near the bottom, according to MyFICO.com.”
Is it worth waiting to buy until I can improve my credit score?
“Probably. The average rate on a 30-year fixed-rate mortgage is typically at least 1.5 percentage points lower for someone with a credit score of 760 to 850 than for someone with a score of 620 to 639. On a $216,000 loan, a borrower with a top-tier score would pay $232 less per month -- a saving of $2,784 per year -- than a borrower near the bottom, according to MyFICO.com.”
Cite Source: Klipinger.com
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