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 Credit scoring was developed in the 1960s as a means to determine whether or not consumers were likely to repay their loans. The score ranges from 350 to 850 with a higher score being extremely favorable. Essentially, a high credit score translates into lower interest rates for the borrower.
There are five factors that comprise the credit score. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. This gives the lender a snapshot of an individual's sense of financial responsibility and ability to pay back loans.
There are many quick tricks to improve the credit score, and I can provide borrowers with more information on this subject. If necessary, I guide them to a reliable resource for credit remediation. If a borrower has to pay a higher interest rate to close a loan, the tarnished credit rating will begin to improve once mortgage payments are made on time and in full. If that is the case, my team and I will be on the watch to alert the borrower when an opportunity arises to refinance and get a lower interest rate.
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| Mortgage Interest Rates* |
| Rates as of Friday, 5th December, 2008: |
| |
Conforming |
APR |
Payment per
$1,000 |
Jumbo |
APR |
Payment per
$1,000 |
| 30-Yr. fixed |
5.250% |
5.383% |
$5.52 |
6.000% |
6.093% |
$6.00 |
| 15-Yr. fixed |
5.000% |
5.227% |
$7.91 |
5.625% |
5.779% |
$8.24 |
| 7-Yr. fixed ARM |
5.625% |
5.761% |
$5.76 |
5.625% |
5.716% |
$5.76 |
| 5-Yr. fixed ARM |
5.250% |
5.383% |
$5.52 |
5.250% |
5.339% |
$5.52 |
| 3-Yr. fixed ARM |
5.250% |
5.383% |
$5.52 |
5.250% |
5.339% |
$5.52 |
| 5-Yr. Interest Only |
5.375% |
5.509% |
$4.48 |
5.500% |
5.590% |
$4.58 |
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| *Rates are subject to change due to market fluctuations and borrower's eligibility. |
| Licensed Mortgage Banker, NJ Department of Banking and Insurance. Corporation also services CO, CT, DE, FL, GA, IN, MA, MD, MN, MI, NC, NH, NY, PA, SC, TN, VA, & RI. |
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0 comments • Karl Peidl - Accredited Loan Consultant • December 05 2008 01:03PM