Good Credit Scores No Longer Enough For Loans

People with above-average credit may have trouble getting loans. Even people who had what was once considered a fairly solid credit score – more than 700 – will face extra fees if they are attempting to get a mortgage backed by Fannie Mae or Freddie Mac, said Kenneth Harney, executive director of the National Real Estate Development Center. For example, Harney said, a buyer with a 699 FICO score who has a downpayment of about 25 percent at closing will pay a 1.5 percent delivery fee under new guidelines that became effective Wednesday. The lower the score, the greater the fees and the larger downpayment lenders are requiring. The alternative, of course, is for hopeful homebuyers to get loans backed by the Federal Housing Administration, but those typically require paying for mortgage insurance and come with higher interest rates.

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