Do You Need Perfect Credit For A Refi?

		Do You Need Perfect Credit For A Refi?

Written by Jaymi Naciri
Tuesday, August 04, 2020
Do You Need Perfect Credit For A Refi?

Those sub-3% mortgage rates sure look enticing. But, can you get your hands on one? If you don’t have excellent credit, the best rates might not be on the table. But that doesn’t mean you can’t refinance.

Minimum credit score

A score above 700 is generally considered to be excellent and will open up your refinance options. But, contrary to what you may think, you can have a lower credit score and still qualify.

“Credit requirements vary by lender and type of mortgage. In general, you'll need a credit score of 620 or higher for a conventional mortgage refinance,” said Experian. “Certain government programs require a credit score of 580, however, or have no minimum at all. As is true for other types of loans, the higher your credit score, the more likely a mortgage refinance lender will be to work with you. Not only are your chances of approval higher, but you'll typically receive a lower interest rate and more favorable loan terms than qualifying borrowers with lower scores.”

Going with a higher rate

Even if you don’t qualify for the lowest available rate, any drop will save you money on a monthly basis, and also over time. This refinance calculator shows how a .25 reduction in rate can save you almost $100 a month on your mortgage. Of course, you’ll want to weigh those savings against the cost of that refi and also consider how long it will take you to recoup those costs.

Buying down your rate

If you don’t qualify for the lowest rate and you want to go lower, you can buy down the rate. “Mortgage points are one way for homeowners to lower their interest rate,” said Bankrate. “When you pay for points on a mortgage, you are actually paying interest right now for the loan. In return, the homeowner can lock in a lower and discounted rate. The rate depends on how many points are purchased. Your mortgage rate will drop more if you purchase more points.”

Typically, one point means a .25% discount in the mortgage rate, and this will cost you 1% of the total mortgage loan amount. If you were looking at a $300,000 mortgage, it would cost you $3,000 to lower your rate by a quarter point. “Homeowners can buy more than one point, depending on their financial situation.”

Copyright© 2020 Realty Times®. All Rights Reserved
Luxury Florida Real Estate Short Sale Specialists North Florida Homes North Florida Condos

Real Estate News

Jacksonville is a Buyers Market
Posted: Wednesday, March 19, 2014 Jacksonville is a Buyers Market says Zillow...<Click to read the Artilce>
> Full Story
New St Augustine Real Estate Website
Posted: Friday, May 03, 2013 Florida Homes Realty & Mortgage is proud to announce the release of our newly...
> Full Story
A New Site, New Tools, But the Same You
Posted: Thursday, May 02, 2013 Florida Homes Realty & Mortgage is proud to announce the release of our newly designed...
> Full Story
> Read All Articles

Copyright ©2020 James Angelo®. All Rights Reserved

Today's Real Estate News and Advice Updated: Tuesday, August 04, 2020

Building A Backyard Studio To ...

Everybody I know rich and not so rich are climbing over each other at home. They need space ...
> Full Story

How Deferment of Mortgage Paym...

According to Mark Hanf, president of Pacific Private Money, Section 4021 of the CARES Act co...
> Full Story

Different Types of Pet Doors a...

Installed-in type

An installed pet door is usually installed in a wall in a homes ex...
> Full Story

More Real Estate News

Copyright ©2020Realty Times®. All Rights Reserved