Your Credit Score could cost you Thousands!

Now more than ever it is paramount that your credit scores are taken very seriously. With the coming New Year, Fannie Mae and Freddie Mac (the main purchasers of home mortgages) will be increasing the fees on loans with less than perfect credit. 

Many are aware that the current liquidity crisis our credit markets are facing stems from the widespread use of extremely relaxed credit standards during the housing boom. This problem became nationally noticed in August of 2007. Labeled the sub-prime meltdown or “Mortgage Market Meltdown” has caused the few lenders surviving this financial problem to “tighten up” their standards on lending and review of credit worthiness.

 Starting in March of 2008 there will be a higher cost for home financing if your credit score is below 680 and you have less than 30% equity in your home. This could mean that if your credit score is 620, a $400,000 loan will cost you 2 points to get the same rates as someone with a credit score of 680 or higher. In real dollars that’s a fee of $8,000! Some banks are currently adding these fees to new loan applications.

 Even if you are not currently in the market for home financing (either purchase or refinance) you should know your scores and how to maximize them. Any scores below 680 will result in higher fees (origination or discount points) or a much higher interest rate than what prime borrowers will receive. Take a few minutes of your time to consult with me so I can help to steer you in the right direction. It could just save you thousands of dollars in interest over the life of your loans (home, auto or even credit cards).