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Find Your LenderPurchase » Do I need to have excellent credit
Your credit score and credit profile are major qualifying factors to buy a home or refinance an existing mortgage. In the past, people with lower credit scores, if qualified by a Fannie Mae or Freddie Mac underwriting system, could get the same interest rate on a mortgage as a person with excellent credit. Unfortunately, that's over now that these entities have implemented more strict risk based interest rate hits. Most of the time there are interest rate adjustments (increases) made for people who have less than a 720 middle fico score these days.
You can think of the rate adjustments as being done in tiers. Look at the following table for an example of how your credit score might affect your interest rate on a conventional loan in today's mortgage market.
| Credit Score | Interest Rate |
| 740 | 5.625% |
| 710 | 5.75% |
| 679 | 5.875% |
| 655 | 6.125% |
You can see that it's very important to try and maintain the highest credit score possible. A few credit score points in either direction can affect the rate you will be offered on your mortgage.
It's not quite so bad with FHA loans. For the most part, if you have a 580 credit score or higher, and can qualify for the loan, you will also qualify for a great rate with government financing.
Because of rapidly changing mortgage underwriting criteria, you should always consult a BeatMyBroker.com mortgage professional regarding your credit score to determine what interest rate you can obtain with your score. Loan to values and loan types also play a more critical role in affecting your interest rate than they used to.
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