Interest Rates and Credit Scores

Yesterday, at our weekly business meeting here at the Coldwell Banker Previews office, Kelly Rebimbas- Senior Loan officer for Sunbelt Lending, spoke about current industry news concerning mortgages. Here are a few topics that I think you will find very interesting:

• Did you know that mortgage rates have been higher in 35 out of the past 35 years? Fixed rates in March of 1974 were 8.41%. Going up each year from there, they reached their peak in March 1982 at 17.16% (shortly after I had gotten my real estate license...whew!) In the years that followed rates went up and down, but stayed fairly level with another upswing in March 1989-March 1990. This was the last time we saw double digits! Since March 2002 rates never went above 7%. Currently 30 year fixed rates are at 5%, an historic low!

• Did you know that the current credit scoring system was originally designed in the 1960s to help lenders with the approval process when looking at the financial profiles of customers. A credit score can range from 350 points to 850. The higher the better. Only 1 in 1300 people have a credit score over 800! (I found that to be amazing) Some customers ask me why the rates are advertised at 5% but the rate they are quoted is higher...this is due to their credit score. A higher credit score translates to a better interest rate for the consumer. An underwriter interprets the credit score in terms of risk. Today a mortgage lender considers a score of 700 or higher to be a good score.

If you would like additional information about what factors are used to determine credit scores or how to dispute errors on a credit report, please feel free to call me at 239-250-4370. Or you can call Kelly directly to be pre-approved before looking at homes or condos! Her direct # is: 239-273-5239. Now is the time! -and As I mentioned in an earlier post, Naples was just named the #2 place to find real estate bargains in the Nation! Great rates, great value, great time to be a buyer!