Why a higher credit score could mean you pay more mortgage fees

MIAMI VALLEY — An already hot housing market might get a little tougher for buyers, including people with higher credit scores.

As of May 1, there could be some sticker shock on loans.

Emily Boyko is a new home buyer in a seller’s market.

“Our battle is we want a place with land because we don’t want the hustle anymore,” Boyko said.

Boyko sold her home in just days, but the search for buying a new home is now reaching six months.

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“I feel like the market is still really hot for how high the interest rates are, which is kind of absurd to me ... but there are a lot of buyers out there,” she said.

Higher credit scores usually reward buyers who pay bills on time with lower costs and rates.

That’s still the case, but new rules taking effect will close the gap between the high scorers and lower scorers — an effort by the White House to empower marginalized communities to compete.

“My understanding of what the government’s trying to do is to try and kind of close that gap and make homeownership more affordable for the people that are kind of on the lower end of the spectrum in terms of credit score down payment,” David Sherman said.

Sherman is with a Columbus-based Equitable Mortgage Corporation and said buyers with a score higher than 700 might pay more.

It’s a cost he said will be built into loan rates.

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But Sherman cautions you to not stop paying bills and purposely lower your credit score.

“No, do not ever do that. It’s important that you’re still maintaining good credit, saving for your down payment, etc., because at the end of the day, you’re going to have the best rates and terms if you do have good credit and a good down payment,” Sherman said.

As for Boyko, she knows she has no choice but to play by the new housing market rules.

“I don’t think anyone is ever prepared to pay more, but it’s, unfortunately, our society and the world is moving forward right now,” Boyko said.

The new rules only apply to conventional mortgages and not FHA, VA, or USDA loans.