Mortgage Rate Update High Credit Score = Low Mortgage Rate
Credit scoring was developed in the 1960s as a means to determine whether or not consumers were likely to repay their loans. The score ranges from 350 to 850 with a higher score being extremely favorable. Essentially, a high credit score translates into lower interest rates for the borrower.
There are five factors that comprise the credit score. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. This gives the lender a snapshot of an individual's sense of financial responsibility and ability to pay back loans.
There are many quick tricks to improve the credit score, and I can provide borrowers with more information on this subject. If necessary, I guide them to a reliable resource for credit remediation. If a borrower has to pay a higher interest rate to close a loan, the tarnished credit rating will begin to improve once mortgage payments are made on time and in full. If that is the case, my team and I will be on the watch to alert the borrower when an opportunity arises to refinance and get a lower interest rate.
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Mortgage Interest Rates for Fixed Rate Mortgages*
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Rates as of Thursday, 31st December, 2009:
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Term
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Conforming
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APR
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Payment per $1,000
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Jumbo
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APR
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Payment per $1,000
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30-Yr. fixed
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360
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5.250%
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5.472%
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$5.52
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5.000%
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5.131%
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$5.37
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15-Yr. fixed
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180
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4.750%
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5.124%
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$7.78
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5.125%
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5.352%
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$7.97
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7-Yr. fixed ARM
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360
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4.875%
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5.092%
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$5.29
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5.500%
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5.635%
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$5.68
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5-Yr. fixed ARM
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360
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4.250%
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4.459%
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$4.92
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5.375%
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5.509%
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$5.60
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3-Yr. fixed ARM
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360
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4.875%
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5.092%
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$5.29
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5.375%
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5.509%
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$5.60
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FHA 30-year fixed
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360
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5.250%
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5.472%
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$5.52
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5.375%
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5.509%
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$5.60
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*Rates are subject to change due to market fluctuations and borrower's eligibility.
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New Jersey: Licensed by the N. J. Department of Banking and Insurance Delaware: Licensed Lender by the Delaware Office of the State Bank Commissioner.
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© Copyright 2009. All About News, Inc.
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