How credit scores have an impact on a mortgage

I think the above chart is very misleading and a disgrace. Okay, so they have a disclaimer stating that the information regarding the difference in rate was gathered from their lending partners. Well, either the people they spoke to at the mortgage companies have NO CLUE, or the person gathering the information didn’t listen correctly. And what ticks me off about information like this? The average client then thinks there is NO HOPE. Yes, you need better credit scores… but it’s not like the end of the world or that you need 700 + credit scores…

Two things that jump out… first off, the pricing penalty matrix only goes up to 740 +… you have the same penalty if you had a 740 credit score or if you had a 760 credit score. And this is a Fannie Mae guideline across the board.

Secondly, if I compare a 620 to a 740 score, there is only a difference in interest of a 1/2 percent to 5/8 of a percent… not a full percent as they described.

This kind of garbage ticks me off because it paints a very bad image. Besides, this example tells nothing about the LTV or the down payment. It just gives a loan amount and the state. It actually costs a half of a point less when putting 5% down compared to putting down 19.99 percent. If you put 20% down, it still costs 1/4 point more in fees than if you put 5% down.

Overall… I just have a problem when this information is not even close. I understand the genaric statement, that if your credit score is lower, that it could cost you more. But let’s be correct in the numbers when comparing.