Mortgage Rates Are Based on Your Credit Score and Equity

November 10, 2009

It used to be that a 720 was considered an excellent credit score, however that’s no longer the case.  The new benchmark for excellent credit when it comes to mortgage rates is now a 740 or better.  When we obtain a credit report, we go off the middle score (not average) when there’s only one borrower, or the lower of the two middle scores when there’s a borrower and co-borrower.

We then look at the equity position.  Depending on the type of loan (rate/term refi, cash-out refi, or purchase), the rate can be higher or lower depending on the credit score and equity position.

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