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What Is My Credit Score And How Does It Affect My Mortgage?
(presented by www.refinance-refinance.net - mortgage lenders)
By Ben Afzal
Basics
Your credit report usually has three different credit scores.
Each score is from one of the three credit bureaus.
A mortgage lender usually uses the middle of the three credit scores. This is known as a “mid score”.
Your credit scores from different bureaus are usually within a similar range. For example, your credit scores may be:
- 720
- 706
- 691
Sometimes there is a substantial difference between these scores.
Ratings
A credit score over 720 usually gets a borrower the best possible interest rates.
As your credit score declines the interest rates offered by lenders increase.
Mortgage lenders typically offer many different loans.
Each of these loans has a different set of criterion for approval. One loan may require a minimum credit score of 680, while another loan may require a credit score of at least 580.
There are loans for all types of borrowers, even borrowers with credit scores below 500.
Often times a borrower with a lower credit score may be approved for a loan type but is capped in the amount of money they can get on a loan.
For example:
- a borrower with a 720 credit score may be able to cashout 100% of their property value
- a borrower with a 600 credit score may be approved for the same loan but only cash out up to 90% of their property value
