The short answer? No. You should not tank your credit score for a better mortgage rate.
If you’ve been keeping up with the news or social media, you might have heard that you should purposefully tank your credit score to get a better mortgage rate. That is not the case. The Biden administration had announced changes to the home loan industry that threw people for a loop. You can view the initial press release by the Federal Finance Housing Agency (FFHA) here.
Now, nothing! The FHFA announced a rescission (fancy word for changing their mind) to the fee changes to better understand the negative feedback they received.
Overall, they were not increasing mortgage rates for people with good credit and lowering rates for people with lower credit. What was going to change was the fees added to the base rate to determine your final mortgage. Borrowers with a lower credit rate would have received a reduced fee, while people with a higher credit score would receive an increased fee.
People were upset because the change was meant to help borrowers with lower credit scores.
There are many benefits to taking good care of your credit score. Benefits include getting approved for higher loan amounts and lower fees.
The changes that threw everyone for a loop are no longer a concern. Do not stop paying your bills in hopes of getting a better mortgage rate. It will only make the home-buying process more difficult and play less in your favor. If you still have questions regarding the recent change or lack of, reach out to our team at GoPrime, and we would like to discuss it with you.