WASHINGTON – If you have plans to buy a house in 2014, some new fees on the settlement sheet may surprise you.
Those fees come down to two things: down payment and credit score. The more, the better in both cases.
Steven Cohen of First Place Bank in Rockville, Md. says fees will rise sharply for those who put down less than 20 percent and for anyone with a credit score lower than 760. And that may have you looking for a cheaper house than you thought, says Cohen.
“It definitely will affect people who are maybe looking in the $400,000 price range. It might bring them down to a $340,000 or $350,000 price range.”
The time to make sure credit scores are in tip-top shape is before applying for a mortgage.
But credit scores aren’t what they used to be. Next year, lenders will look for even higher score, The Wall Street Journal reports.
Any score lower than 760 will lenders consider the borrower a risk. That means the bborrower willl pay more. The old threshhold was 740.
Cohen says it’s important to review scores now, but he urges potential borrowers to beware of “free” credit score websites. They don’t use the same scores that the banks use.
Cohen’s recommendation is to use myFICO.com. There’s a small fee to obtain your report, but you see exactly what the banks will see.”
No matter how it’s sliced, loans will cost more in 2014. The best way to keep a lid on extra costs is to improve lower credit scores.