Better credit scores get better point pricing. The economics of buying points change significantly depending on which credit tier you fall into.
Shopping multiple lenders is especially important for point pricing because different lenders price points differently for each credit tier. Patrick Kevin Fagan helps San Antonio homebuyers compare point pricing across lenders.
Credit Score Impact
Your credit score determines both the base interest rate you qualify for and the cost of buying points. Higher credit scores generally mean lower rates and lower point costs to achieve a given rate reduction. A borrower with a 760 score might pay 1 point to reduce their rate by 0.25%, while a borrower with a 680 score might need 1.5 points for the same reduction. Patrick Kevin Fagan explains how credit tiers affect mortgage pricing for clients in San Antonio.
Lender Shopping
Point pricing varies significantly between lenders, especially for borrowers with lower credit scores. One lender might offer aggressive point pricing for a 680 credit score while another charges a premium. Getting multiple Loan Estimates is the only way to find the best deal. Patrick Kevin Fagan helps buyers throughout Bexar County compare lender pricing.
Optimization
The optimal strategy depends on your credit score tier. Higher scores: buying points is relatively cheap and break-even is faster. Lower scores: the cost of points may be higher, so the break-even is longer and points may not make sense. In some cases, using the money to improve your credit score first may be a better investment than buying points. Call 210-317-6514 to discuss your credit situation.
