HomeMortgageFACT VS. FICTION: Greater charges for debtors with larger credit score scores?...

FACT VS. FICTION: Greater charges for debtors with larger credit score scores? Not essentially.


Higher fees for borrowers with higher credit scores? Not necessarily. Fact vs. fiction.

Listening to information about folks with good credit score scores paying extra for mortgages? Right here’s why that’s not true.

Did you see the latest information a few “new” tax on mortgage debtors with larger credit score scores? We all know we did! Let’s separate some truth from fiction.

FACT: Mortgage Degree Worth Changes (LLPAs) are altering on loans which are backed by Fannie Mae and Freddie Mac. LLPAs are charges which are charged to the mortgage via rate of interest pricing, and are decided primarily based on mortgage options like your credit score rating, loan-to-value (how a lot you set down), and different mortgage options.

FACT: The charge construction that was already in place for LLPAs has been tweaked to be extra favorable for these with decrease credit score scores, however there’s no situation the place somebody with decrease credit score could have a decrease charge than somebody with larger credit score who places down the identical amount of cash.

FACT: Fannie and Freddie have a mission to advertise inexpensive homeownership, which they’re doing by decreasing charges on residence purchases for these with decrease credit score scores in addition to serving to First time Homebuyers with low to reasonable revenue.

FICTION: Individuals with larger credit score scores can pay larger charges than these with low credit score scores. [TRUTH: People with lower credit scores will still pay higher fees, just not as high as they were previously.]

FICTION: Fannie and Freddie are instituting an “unfair” mortgage tax on folks with excessive credit score scores. You would possibly as effectively decrease your rating to get a decrease rate of interest. [TRUTH: While in some cases people with higher credit scores might pay more than they did previously, they will not pay more than someone with a lower credit score.]



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