The FHFA – the federal regulator for Fannie Mae & Freddie Mac -- set out new guidelines for interest rates and one part of the change has certain consumers with lower credit scores qualifying for lower interest rates than other consumers with higher credit scores. Someone with a 640 credit score in essence will qualify for about ¼% lower in interest rate on a 30 year mortgage than someone with a 740 credit score. This is flat-out wrong! How does this happen?

Everyone wants to get the lowest interest rate on a mortgage when they purchase or refinance a home. Many consumers think a minimum 720 credit score will qualify them for the lowest interest rate. More savvy consumers realize that that credit score requirement is 740. Now that number is being raised to 780 for the most popular mortgage loans. There are a few other new criteria in order to get the lowest interest rate. What does this mean for prospective home buyers and those looking to refinance their mortgage? Things are changing!