Florida Mortgage : Learning Center

Fannie Mae, FNMA, and Freddie Mac, FHLMC, have announced new pricing requirements for any homeowner or home buyer with less than perfect credit scores.  These changes are to take place for loans they purchase on the secondary markets as of March 1, 2008.  This means Florida home buyers and homeowners, seeking new conventional mortgages, may encounter higher costs determined by their credit scores.

Generally, the adjustments in costs to the consumer is based on mortgage loans with less than 30% in down payments.  In fact, most conventional loans will cost more for credit scores under 680 and considerably more for credit scores below 620.

Up to now when someone qualifies for a FNMA or FHLMC conventional mortgage, the interest rate or cost should be the same, regardless of a lower credit score of say 620 or a higher score of 780.  It simply makes it easier for the higher credit score buyer to obtain a mortgage loan commitment.  Well all that is changing.

There are more details regarding this dramatic increase in cost to the consumer as Fannie Mae and Freddie Mac continue to adjust their qualifying guidelines to offset mortgage defaults.  It is of course very important for new home buyers to review their credit reports, correct or improve the scores if necessary, save money for reserves and down payments, and ask for professional assistance when it comes to the ever changing world of conventional mortgage loan programs

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