How Your Credit Score Determines Your Los Feliz Mortgage Rate
Today we’re going to talk about How Your Credit Score Determines Your Los Feliz Mortgage Rate. If you are thinking or you are ready to buy a home in Los Feliz, CA, it’s smart to read the below and make sure that you’re working with an expert Los Feliz buyer’s Realtor Agent.
With all of the changes in the Los Feliz mortgage industry these days, it is more important than ever to understand How Your Credit Score Determines Your Los Feliz Mortgage Rate and how a credit score works – and how to keep your credit score as high, and the mortgage rate you lock-in, as low as possible.
Many homebuyers don’t realize how how your credit score determines your Los Feliz mortgage rate and how important it is to understand conventional lenders, those which use Fannie Mae guidelines, are now charging a premium for credit scores that are between 620 (the minimum they will lend on) and 720, part of which is passed on by Fannie Mae itself. The lower the score, the higher the premium and the rate, with borrowers in the 720+ range getting the best rates available in the market place.
FHA is also an option, and has premium for credit scores in that 620-720 range, but their upfront premium for all borrowers is 1.5% of the loan amount plus a monthly mortgage insurance premium. On it’s face the loan may seem like a smart plan of action, however, this can be a pricey option as well. And they do have sub-620 score premiums if that’s your current credit situation.
Your credit score consists of several components, each which contributes to your score.
Credit is pulled from the three main credit bureaus (Trans Union, Experian, and Equifax) and lenders use the middle of the three scores to determine a combined credit score.
The major factors are:
1) Payment history, which is about 35% of the total scoring.
This indicates how well a borrower is able to pay on time. Recent late payments of any shape or kind, including utility bills, and mortgage late payments weigh the most heavily on a persons credit score and ultimately their payback liability.
2) Level of indebtedness
This is the balance of a credit line versus the total limit, and is about 10% of the score. Ideally you want to carry a balance somewhere between 40% – 30% of the credit line limit.
3) Length of credit history
Demonstration of being able to manage credit long-term makes up about 10% of a credit score.
Visit my Real Estate 101 page on my blog for more useful information for first time homebuyers. And call me when you are ready to buy a home. It will be my pleasure and privilege to assist you in finding and buying a new home in Los Feliz, CA, or anywhere else on the Eastside of Los Angeles.
How Your Credit Score Determines Your Los Feliz Mortgage Rate
I’m a local real estate agent with The Shelhamer Real Estate Group, and It would be my pleasure to help you find the perfect property to call home in Downtown Los Angeles, or if you’re thinking about selling a house, condo, or multi-family building in, Los Feliz, Silver Lake, Atwater Village, Glassell Park, Mount Washington, or Downtown Los Angeles, it would be a privilege to help you get top dollar for the sale of your property.
Let’s chat sometime. 310-913-9477 or contact me
