How Much Money Does A Good FICO Credit Score Save You On A $200,000 Mortgage Loan?
When it’s about credit scores, what are the primary fears that cycle around on a general basis? Well, they can revolve around:
- Fear of losing a mortgage loan deal because the score was too low.
- Fear of getting scammed by an online free FICO Credit score report retailer.
- Fear of hitting bankruptcy anytime soon, at the present demolishing score rate.
Well, good news is that as far as mortgage deals and getting a copy of free MyFICO Credit Score, the situation is not as bad as it looks. A low score has many forms. Lenders like to refer to a person with stained credit as a risky anomaly, a sucky client and probably a long term hassle. However, mortgage loan is one of the best deals that reap the benefits of a good credit score report. Which is why, we need to discuss modes of improving you score and the impact of a good score on a mortgage plan payback policy.
According to Janette E. Jones of American Home Mortgage – Bethesda, “For most people, a mortgage loan is where they’ll reap the greatest rewards from an improved credit score. “For the past two or live score three years, mortgages have been the lowest in 30 or 40 years, but that doesn’t apply to everybody. That basically applies to people who have excellent credit. Someone who has excellent credit can actually get a fixed rate loan for 5.5 percent. However, for people who have less-than-excellent credit — and I would say that’s anything below 650 (on the FICO scale of 300 to 850) — they’re looking at an interest rate that’s 1 percent higher, at the bare minimum.”
That being said, an ideal score, which is deemed as “good“, is somewhere between 700 – 759 to 760 – 850. Take a look at the following U.S. population chart against credit scores. It’ll help you to assess your position in the market.
% of Population……. Credit Score
2%………….. 300 – 499
5%………….. 500 – 549
8%………….. 550 – 599
12%………….. 600 – 649
15%………….. 650 – 699
18%………….. 700 – 749
27%………….. 750 – 799
A simple breakdown of the above numbers indicate that half people fall below the median (723) and the other half maintains a high credit report. 2% to 3% of the entire U.S. population has a stained credit report. Our prayers are with them, as they won’t be entertained by any notable mortgage loan organization.
You, on the other hand, are viable to fall underneath the 650 – 750 categories. At this stage, you can choose to get 3 free credit score reports from a reliable online platform. It’ll help you to further improve your stance on your current position. As far as the mortgage plan is concerned, we concocted a 30 Year Mortgage Plan, with $200,000 worth.
In above case, your good FICO credit score can save you a lot of money. For instance, if your score happens to be somewhere between 760 – 850, you’ll end up saving $9,378 on the $200,000 30-year mortgage payback policy. It’d mean that you’ll be paying $1, 90,622 on an overall scale.