High Credit Score = Low Mortgage Rate

Mortgage and Lending

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.

Mortgage Interest Rates*
Rates as of Friday, 5th December, 2008:
  Conforming APR Payment per
Jumbo APR Payment per
30-Yr. fixed 5.250% 5.383% $5.52 6.000% 6.093% $6.00
15-Yr. fixed 5.000% 5.227% $7.91 5.625% 5.779% $8.24
7-Yr. fixed ARM 5.625% 5.761% $5.76 5.625% 5.716% $5.76
5-Yr. fixed ARM 5.250% 5.383% $5.52 5.250% 5.339% $5.52
3-Yr. fixed ARM 5.250% 5.383% $5.52 5.250% 5.339% $5.52
5-Yr. Interest Only 5.375% 5.509% $4.48 5.500% 5.590% $4.58
*Rates are subject to change due to market fluctuations and borrower's eligibility.
Licensed Mortgage Banker, NJ Department of Banking and Insurance. Corporation also services CO, CT, DE, FL, GA, IN, MA, MD, MN, MI, NC, NH, NY, PA, SC, TN, VA, & RI.

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Karl Peidl

Accredited Loan Consultant
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