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If you’ve managed to earn a credit score of 800 or higher, congratulations! You’ve achieved one of the highest scores out there. Credit scores stretch from 300 to 850, and the average American’s score sits at 711 as of October 2020.
Generally, a high credit score shows you’ve managed debt responsibly in the past — and it comes with benefits. Aside from bragging rights, an exceptional credit score makes you an attractive borrower for mortgage lenders and puts the best interest rates within your reach.
Here’s what you need to know about credit scores of 800 or higher:
- How good is an 800 credit score?
- Average mortgage rates for an 800 credit score
- Other factors behind your mortgage rate
How good is an 800 credit score?
Lenders tend to evaluate credit scores in ranges, and a credit score between 800 and 850 falls in the “excellent” range. People who achieve such a high score have generally shown they pay back borrowed money on time and don’t miss payments
Here are just a few advantages to having an 800+ credit score:
- You have a better chance at getting approved for a home loan
- You may qualify for a low mortgage rate
- You have more power to negotiate your interest rate and closing costs
Learn More: What Is a Mortgage Rate and How Do They Work?
Average mortgage rates for an 800 credit score
Your credit score plays a big part in whether you’ll qualify for a mortgage and receive a good interest rate.
The table below shows a sampling of interest rates from our partner lenders.
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These rates reflect the annual percentage rate (APR), which includes the interest rate plus lender fees. The APR is a good metric to check when comparing mortgage offers because it reflects the total cost of borrowing. Qualifying for a lower APR can help you save thousands of dollars over the life of the loan.
For example: A high credit score might net you an APR of 2.606% on a 30-year, $200,000 mortgage with a monthly payment of $801 (not including insurance or taxes).
On the other hand, a borrower with a 620 credit score might receive an APR of 3.966% and pay $950 per month. That $150 difference in monthly payments adds up to $54,000 over the life of the loan.
But you don’t need to seek perfection. If you can improve your credit score by just a few points, it might put you in the next credit score range and make you eligible for a better interest rate.
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Learn More: APR vs. Interest Rate: Understanding the Difference
Other factors behind your mortgage rate
While having a good credit score can help you get a low mortgage rate, it isn’t the only factor driving your offer. Lenders also examine broader economic trends and other areas of your financial life when determining rates. Some examples include:
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While some of these factors are out of your control, you can work on other areas to boost your chances of getting a low mortgage rate — regardless of your credit score. Here are some factors you can control:
- Down payment: Putting down at least 20% can help you avoid private mortgage insurance. And because the lender is taking on less risk, you’ll likely get a break on the interest rate.
- Loan size: Getting a particularly big mortgage might mean paying a higher interest rate. If possible, look for homes that are cheaper or increase your down payment so the loan size shrinks.
- Loan term: Generally, shorter loan terms have lower interest rates because the lender is extending risk for a shorter period of time. Compare interest rates and monthly payment amounts on different loan terms —such as 15, 20, and 30 years— to see what you can afford.
- Debt-to-income ratio: Your DTI ratio compares how much of your monthly income goes toward paying debt. A lower DTI ratio — around 43% or less — may help you qualify for a low mortgage rate.
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About the author
Home » All » Mortgages » Here Are the Mortgage Rates You Can Get With a Credit Score of 800
As an expert in credit, mortgages, and financial management, I bring a wealth of knowledge and experience to help you navigate the complex world of personal finance. My expertise is not only demonstrated through a deep understanding of credit scores and their implications but also by staying up-to-date with the latest industry trends and providing practical insights to empower individuals in making informed financial decisions.
Now, let's delve into the key concepts discussed in the provided article:
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Credit Score Basics:
- The credit score range is from 300 to 850, with 850 being the highest possible score.
- The average American credit score is reported as 711 as of October 2020.
- A credit score of 800 or higher falls into the "excellent" range.
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Benefits of an 800+ Credit Score:
- Individuals with a credit score of 800 or higher are considered attractive borrowers for mortgage lenders.
- Benefits include a better chance of getting approved for a home loan, qualifying for low mortgage rates, and having the power to negotiate interest rates and closing costs.
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Mortgage Rates for an 800 Credit Score:
- Lenders evaluate credit scores in ranges, and a score between 800 and 850 is classified as "excellent."
- The article provides a table showing sample interest rates from partner lenders for different credit scores.
- A higher credit score can result in a lower APR (annual percentage rate), potentially saving thousands of dollars over the life of a loan.
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Factors Affecting Mortgage Rates:
- Broader economic trends and personal financial factors are considered by lenders when determining mortgage rates.
- Economic indicators such as inflation rates, employment, housing market conditions, and stock and bond markets play a role.
- Personal factors include credit score, credit history, down payment size, loan-to-value ratio, loan size, type, and term, debt-to-income ratio, and the location of the property.
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Controllable Factors for Better Mortgage Rates:
- Down payment size: A down payment of at least 20% can help avoid private mortgage insurance and may lead to a lower interest rate.
- Loan size: Larger mortgages may result in higher interest rates, so managing the loan size is crucial.
- Loan term: Shorter loan terms generally have lower interest rates.
- Debt-to-income ratio: A lower DTI ratio, ideally around 43% or less, may improve qualification for a low mortgage rate.
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Credible Operations, Inc.:
- The article mentions Credible Operations, Inc., with NMLS # 1681276, as a partner that provides information on mortgage rates from various lenders.
- Credible facilitates the comparison of loan options from partner lenders, making it easier for individuals to find suitable mortgage options.
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Author Information:
- The article is authored by Kim Porter, an expert in credit, mortgages, student loans, and debt management.
- Kim Porter's expertise is highlighted by her features in reputable publications such as U.S. News & World Report, Reviewed.com, Bankrate, and Credit Karma.
In conclusion, understanding the nuances of credit scores, mortgage rates, and the factors influencing them is crucial for making informed financial decisions. A credit score of 800 or higher opens doors to favorable mortgage terms, but optimizing other controllable factors further enhances the likelihood of securing a low mortgage rate. Credible Operations, Inc. serves as a valuable resource for comparing mortgage options and navigating the complex landscape of personal finance.
