Subprime Credit Score
REM # A576
By Ilyce R. Glink
Summary: Ilyce explains how lenders decipher your credit score.
Q: What is considered a subprime credit score? And what kind of rates can I expect with say a 650 credit score?
A: Right now, you're on the border between a great rate (typically 650 to 680 and up) and a sub-prime loan. Some lenders will throw you a bone and give you A- status, and others will consider you sub-prime.
Since you're just a few points below the prime cutoff, your rate shouldn't be that much lower than someone with grade A credit. Lenders I know say you could expect to pay an additional 1/4 to 1/2 percent in interest and perhaps another point or so in fees.
One way to go might be with an FHA loan. FHA is used to borrowers with less than perfect credit, and outsized loan-to-value ratios.
You might also try a lender that keeps their mortgages in-house, as investments. This is also known as a portfolio lender.
Finally, consider pulling a copy of your credit history and credit score from myFICO.com. For $12.95, you'll get both items, plus a long list of specific things you can do that will raise your credit score. If you can wait six months to get your mortgage, you might want to do this, since you will save thousands of dollars over the life of your loan by being a Grade A borrower.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Quit Claim Deed Transfers Property Taxes
Quit-Claim Deed Question
Deed in Lieu of Foreclosure Will Hurt Credit Rating
Hail Damages House After Home Inspection
Ask the Real Estate Lawyer - January 16, 2004
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
