Knowing Credit Score Key Factor in Obtaining Low Mortgage Rate

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According to the US General Services Administration, “Many people mistakenly believe that you have to come up with a down payment equal to 20 percent of the price of a home."

Educated home buyers are more likely to get better home mortgage rates than those with no prior coaching. Knowledgeable buyers are less likely to fall prey to high pressure mortgage brokers charging an extra two or three points just because they can get a away with it. This needless waste of money can be avoided learning a few simple facts and there is no cost for the education. Credit Ratings and Mortgages website provides basic information about credit scores, lifestyle choices and mortgages on just a few pages:

Spending habits, reliability and behavioral risk are parameters by which lenders measure our creditworthiness. Banks and other lenders like numbers and scales so naturally even our credit profile has a scale and each of us has our place on the scale. Credit scores are called FICO scores. You can find out more about FICO scores and what goes into it.

Something you won’t see very often is a rate sheet. Rate sheets are one of the tools of the trade for mortgage brokers. It is essentially a table of risks and rates broken down by loan amount. The other piece of information present in the table is how much the broker will be paid for selling you and given rate. This is known as yield spread premium and this is one of the places where a dishonest broker can really take advantage of you if you are not savvy.

The bottom line is that buying a house is a gut wrenching experience and it costs plenty of hard earned money. By taking a few minutes to get ready before you call your broker you can save yourself enough money to furnish your new house with new furniture.

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Adam Lazer

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