Are you considering a home loan? Or, are you interested in refinancing your existing home mortgage? Then you need to know what a good credit report score is for a home loan since credit score requirements vary with the type of loan you are interested in obtaining. Whether you receive credit and the interest rate you are offered both depend in large measure on your credit score.
The importance of your score cannot be overemphasized in acquiring a mortgage on a house. Anyone who has ever owned a house or done any type of in depth analysis of a house mortgage, knows that a change in interest rate can result in lower monthly payments as well as savings of thousands of dollars over the life of a mortgage, which normally are for periods of 15, 25, and 30 years.
Consider this example from a mortgage lender:
The difference in the interest rates offered to a person with a score of 520 and a person with a 720 score is 4.36 percentage points, according to Fair Isaacs. On a $ 100,000, 30-year mortgage, that difference would cost more than $ 110,325 extra in interest charges. The difference in the monthly payment alone would be about $ 307.
Those are not insignificant numbers. A three-hundred dollars per month increase in monthly payments could mean the difference in whether or not you qualify for a loan since your disposal income each month figures into the equation of qualifying for a home mortgage loan. So what is a good credit report score for a home loan?
Sorry, there are no easy or simple answers. The score varies from lender to lender. It appears that anything below 600 is out of the question, except for the most onerous terms and conditions and a very large down payment. Mortgage lenders seem to start taking you serious around 650 and they get excited about you if you have a score of 700 or above.