Credit - not just about the rate!
We are all aware that a person’s credit score impacts their ability to obtain a mortgage; it dictates the cost of that loan if they qualify. However, very few people focus on all the factors involved in a credit score. Further, while many people think that they are “good” if their score is over 620; most people are unaware that according to Experian®, the average credit score in the United States as of 2/22/2022 was a record high of 714! Why is this important? Because anything below 714 is BELOW AVERAGE! So, if you put it into perspective, that client with that 620 score, is 93 points BELOW AVERAGE!
The reason this is important is that the borrower’s credit score impacts not only the interest rate on the loan, but it also can impact:
- Loan program
- LTV
- Ability and cost of PMI
- Ability and cost of homeowner’s insurance
The point I want to make here is simple; we can’t control the interest rate market, but we can do something about the costs by improving credit scores!
Now would be a good time to put together short video with your:
- Self, explaining the pricing differences between 620 to 800
- Your PMI rep showing the impact on those payments
- Your Insurance Professional show the impact of credit score on different types of home insurance policies.
This kind of information can help you help your clients by reducing costs that they can control!
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