The mortgage rate examples below were pulled off the MYFICO website. We know that rates change, so regardless of where rates are, the following general rules apply:

Low 600 credit score range—for every 20 point increase to the credit score, the interest rate lowers by.50% ($75 a month or $27,000 over the life of your loan, for a 250K loan).

Above a 660—Once you’re above a 660, for every 20 point increase to the credit score, the interest rate lowers by.25% ($37 a month) up to a 700.

$250,000 mortgage loan on a 30 year fixed loan:

760-850        3.447%

700-759        3.669%

680-699        3.846%

660-679        4.060%

640-659        4.490%

620-639        5.036%

As important, you have a greater chance of being approved for the financing you are looking to obtain when you have a high credit score. If you’re talking dollars, even small differences can be big bucks. The difference between a 639 and a 700 (which really isn’t much) over the life of this loan is about $78,000 in interest. Then, factor in all your auto loans, credit cards and bank loans, which have really high rates, over that same 30 years, and this could easily add up to $100,000, or more. Now you are looking at an additional 178K in interest over 30 years. The opportunity cost loss is $178,000 less to invest over 30 years. You might have been able to earn $325,000 using the additional money. On top of that, add that to the amount you paid in additional interest in over just 30 years, which could cost you an estimated $500,000 or more. Moral of the story—boost your credit scores up fast!

By Carl Guzman

Carl Guzman, NMLS# 65291, CPA, is the founder and president of Greenback Capital Mortgage Corp. He is a residential financing expert and a deal maker with over 25 years’ experience. Carl and his team will help you get the best mortgage financing for your situation and his advice will save you thousands! www.greenbackcapital.com [email protected]