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For FHA loans, do rates differ depending on the credit score (like they do with Conventional) or does everyone who meets a 640 score get the same rate?
It varies from lender to lender. You probably would have the same rate, but not the same points. Example, if score was 720, the points may be 0, but if the score is 640, it could be 1/2 point due at closing for the same rate.
For FHA loans, do rates differ depending on the credit score (like they do with Conventional) or does everyone who meets a 640 score get the same rate?
Even people with the same credit score don't necessarily get the same rate. Each individual lender decides what they want to offer a borrower. One guy with a 700 FICO might get 3.25% and another guy with a 700 FICO might get 3.5% with a different lender on the exact same house.
Even people with the same credit score don't necessarily get the same rate. Each individual lender decides what they want to offer a borrower. One guy with a 700 FICO might get 3.25% and another guy with a 700 FICO might get 3.5% with a different lender on the exact same house.
But at the same lender, the rate should be the same right?
Didn't know about the points possibility being different. We were given a rate with 0 points so I guess it does not apply in our case. Im just stressing a little because Im trying to get our scores as high as possible before we go back into underwriting in the next 2-3 weeks (new construction) but our scores are comfortably above 640 (high 600s, low 700s range) but if it we were told 0 points and the rate is the same for everyone over 640, then I should probably stay calm.
So I went straight to the source and asked the LO. They said that the rate does in fact change depending on the credit score. 640 - 679 is one rate, while 680+ could get a better rate. I'm assuming 720+ would get an even better rate, though they didn't say specifically.
FHA purchase in Oregon, if I were to lock a 30-year fixed w/3.5% down:
640 fico gets 3.625% with a $400 Lender Credit
740 fico gets 3.25% with a $775 Lender Credit
I'm not the cheapest lender because I am not some shlub in a cube, and I provide impeccable service. This is not an advertisement or solicitation. Just showing you the spread.
Thanks Pfhtex! Can you also let me know what the other break downs are, does it change every 20 points, 40 points or how does it work? What would the rate be with a 700 mid credit score and $0 in lender credit?
Last edited by SelfEmployed75; 04-16-2013 at 02:56 PM..
700 score, Oregon purchase, 30 day lock w/700 fico = 3.25% with a $400 Lender Credit. You gotta take the credit, I can't keep it any more, and if we knock you down to 3.125%, then it would COST you like three grand. That's my break point.
It is an ever expanding and contracting, living thing, based upon about 26 factors, and what has become an unpredictable market.
**Purely illustrative post, not a solicitation, your mileage may vary....
Thanks again, that's a great rate AND there is lender credit thrown in! Unfortunately I am already in the loan process with another lender (builder's in house lender, closing costs paid by builder as an incentive to use their lender) plus I'm not in Oregon. Our initial quote months ago when we applied before construction started was 3.375% and no lender credit, but the credit score was in the mid 600s.
No problem. I lend in every state. Builders tend to build those incentives into their price packages, and that's fine. I'd have very close to an identical offer at those metrics. Sounds like you are happy, and that's all that really matters.
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