Prime rate and credit score?

Does anyone know what the cut off points are for credit scoring and how it relates to what type of interest rate you can get for a home based on the current prime rate? Is anything above 750, pretty much the same interest rate?

My situation is:
Single
No debt
20% down payment ready on a $175,000 home
750+ credit score
Very good debt to income ratio
Location: Hattiesburg, MS

With the housing market the way it is, what intrest rate should I be able to get on a 30 year fixed mortgage loan taking the above into account. I can easily afford the payment for a home in that price range.

I see alot of offers online, but is my best bet negotiating directly with the local Wachovia bank to get the best rate? I'm reading my "First Time Home Buyers" book, but they don't cover this topic very well.... :D

Primetime,

You can find estimates of current mortgage rates for your area online at http://finance.yahoo.com/rates/query?t=m or www.bankrate.com. Ultimately, you'll have to apply for a loan from a lender or broker to know exactly what rate you qualify for. The lender/broker will provide you with a Good Faith Estimate (GFE). The GFE shows an itemized breakdown of all of the expenses associated with getting a mortgage and purchasing a home. There are many costs beside the rate you get, so pay close attention. The GFE allows to you compare different offers in a standard format.

With a score of 750+, you will likely qualify for the best rates (around 6.1%-6.625% as of 7/24/08), but be sure to shop around and get at least 2-3 quotes from different banks/brokers (not just Wachovia). There can be a lot of "other" fees that get charged at closing that are not included in your rate - many are legit and reasonable, but other may be inflated, unnecessary, or rediculous.

Buying a house is probably the biggest purchase you'll make in life, so take your time to shop for the best mortgage deal! That goes for buying the house too...shop around, get to know your local housing market and be sure to negotiate on price when you make an offer. Don't offer asking price, especially in this market. A good real estate agent can be very valuable guide, especially if this is your first home purchase.

You sound like you're in good shape with a 20% down payment. 20% down will help you get a good interest rate and also avoid private mortgage insurance (PMI). Keep in mind closing costs, which I would suggest paying for out-of-pocket instead of rolling them into your loan.

Hope that helps.

Brent

Thanks Brent! Your reply was most helpful!

I checked out yahoo, and these are the results:

http://finance.yahoo.com/rates/result?t=m&u=MortgageRatesByMarket&s=7&e1=8&a=1&b=175000&c=1&d=1&p=1&st=MS&m=1277

1. Is the lowest APR always the best deal?
2. Do the listed fee's already include the points? I don't think they do because one of them has the fees at $439 and the points read 0.000/
1.000 Since $1000>$439, I guess the points aren't included.

3. Where the points say 0.000/1.000, what do the 0.000 and the 1.000 refer to?

I like to recommend credit unions. But always shop around for a loan, especially in today's mortgage climate. With your credit, you should be able to get a great loan.

I checked out yahoo, and these are the results:

http://finance.yahoo.com/rates/result?t=m&u=MortgageRatesByMarket&s=7&e1=8&a=1&b=175000&c=1&d=1&p=1&st=MS&m=1277

1. Is the lowest APR always the best deal?
2. Do the listed fee's already include the points? I don't think they do because one of them has the fees at $439 and the points read 0.000/
1.000 Since $1000>$439, I guess the points aren't included.

3. Where the points say 0.000/1.000, what do the 0.000 and the 1.000 refer to?

Q1 Answer: The lowest APR may not always be the best deal because of the other costs associated with getting a mortgage, such as points/origination fees.
Q3 Answer: The first number (0.000 in this case) is the discount (prepaid interest) points and the second number (1.000) is the origination points. Discounts points are the % of your loan that you have to pay upfront to receive the quoted interest rate. The more discount point you pay, the lower your rate. There are calculators (try http://www.bankrate.com/brm/Calsystem2/Calculators/InterestVsPoints/Default.aspx) that can help you decide if its a better to pay points or not. Origination points are the % of your loan you have to pay upfront for the privledge of getting a mortgage from the lender.

As I previously mentioned, be sure to get a complete picture of the mortgage terms and fees by getting several good-faith estimates for comparison. Shop, shop, and shop some more!

I thought that the APR takes the points into account, which is why its higher than the rate?