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I have a 640 credit score, am I going to have to pay higher costs related to my purchase?

by lin_s345 from McDonald, New Mexico. Jan 12th 2016 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Your purchase costs should not be different, but your loan costs certainly could.. If you're looking at using FHA for financing, then there's little difference in the rate with a 640 borrower vs. a 740 borrower, its higher, but only slightly.. However if you go conventional, then yes.. there is a huge difference with a low score vs. a high score.. even greater difference if your putting less than 20% down since the required mortgage insurance premium is based on your credit scores as well.. but your typical closing costs should not be any different since they have nothing to do with your score.. One other thing.. your home owners insurance premium can also be based on your credit scores, so its possible that you will pay more for that as well.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Jan 12th 2016
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 399 contributions

Great question! The answer, like most these days is, it depends. If you are looking at purchasing with a government loan, (e.g. FHA, VA or USDA), then your interest rate and costs will be very close to those paid by someone with an 800 score. If you are buying with a conventional loan, (e.g. Fannie Mae or Freddie Mac), then yes, the rate OR fees will be higher but most likely not both. I'd be glad to provide you with a few options (at no charge) so you can compare and determine which is best for you. Please contact me at your convenience. My phone is on evenings and weekends too! Charlie Sparks (MLO# 195031) Pinnacle Capital Mortgage in Albuquerque, 505-350-3735 or csparks@pcmloan.com. Thanks!

Jan 12th 2016
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 399 contributions

Correction, my phone# is 505-350-3745

Jan 12th 2016
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,970 contributions

Technically no, the costs don't change. The rate will change, and this can effect what a lender may give you as a lender credit... So technically no, but maybe yes. For example, with an 800 score at 4.00% rate, maybe I would give you a 1% lender credit towards closing costs. But with a 680 credit score, there would be no lender credit at 4.00%. Sort of confusing, but your Loan Officer can show you and explain.

Jan 13th 2016
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