Today, thanks to many apps and access to information, all consumers have ready and easy access to their FICO (credit) score. Anyone thinking of buying a home no doubt knows their credit score will come into play in terms of qualifying for a mortgage but just how significant is your credit score? Is there really that much difference between a 670 and 700 credit score, or between a 700 and 741 score? Well, when it comes to mortgage rates, it does make a difference!
A 670 FICO vs a 741 FICO will run up the typical cost of St Louis home over $17,000 over the life of your loan!
For example, as the table below illustrates, the median interest rate for a mortgage for a person in St Louis (borrowing over 80% of purchase price) with a FICO score of less than 680 is 3.962% versus an interest rate of 3.611% for someone with a FICO score above 740. The median price of homes sold in St Louis during the past 30 days was $245,055. So, to make it simple, if we assume that for the loan amount a person with a 679 score would be looking at a house payment of $1,153 per month (principal and interest) while someone with a 741 credit score would be looking at a payment of $1,104 or $49 per month less. That may not sound like much, but over the 30-year life of the mortgage that means the person with the lower credit score will pay $17,640 more in interest than the borrower with the higher score. Or, to look at it a different way, for the same payment of $1,153 that the lower score borrower will pay for a $245,055 home, the borrower with the higher score can buy a home that costs $255,823.
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St Louis Home Loans Mortgage Interest Rates By Credit Score
(click on chart for live, interactive chart)
