Here's what I mean by borderline 680 ==> a Credit Score of 679 or less!
Freddie Mac and Fannie Mae have effectively announced changes regarding how conforming mortgages will be priced. Here's the break-down:
If you're coming in with less than 30% down payment & your Credit Score is below 680, you will have a higher rate conforming mortgage!
Credit Score | Pricing Adjustment
679 - 660 = .75%
659 - 640 = 1.25%
639 - 620 = 1.75%
620 & below (or missing Credit Score) = 2%
These changes are to be in effect March 1, 2008.
*Note: the above referenced guidelines will not impact government loans like FHA and VA.
What this news does is emphasize the importance on two cautionary measures:
1. If you're buying a home any time soon, it's important that you sit with your Mortgage Advisor and conduct a Credit Review. Taking the arrogant route of "oh I have great credit" and not doing so could cost you hundreds of dollars in additional monthly payments as a result of a higher interest rate. Since you're already reading here, you can contact me for a Free copy of your Credit Report or you obtain a copy at www.freecreditreport.com BUT, it must be a tri-merged credit report (it must include your Equifax, TransUnion, and Experian credit scores).
2. If you're contemplating a refinance in the near future, you should know that the rate on a 30-Year Fixed Rate Mortgage is at it's lowest today since two years ago October. As my colleague would say,
"Tomorrow only comes sometimes, but today is always here." -- Dan Green
Waiting for the new year might very well cause damage by bringing you a higher rate, not to mention the changes this guidelines are bringing.
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