Schumer Bill Would Require Credit Rating Companies to Provide Consumers with Detailed Credit Score Information

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No Lifer
Sep 29, 2000
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A typical reputable subprime lender may charge three percentage points more than a conventional bank lender. On a modest mortgage of $90,000, for example, shaving three percentage points from a loan would save homeowners $160 per month, or over $1,900 a year on lower mortgage costs had they known that their credit score was strong enough to secure better loan terms.
How's that possible? 3% of 90k is $2700, and even allowing for the slowly shrinking principle it should be still $2600+, not $1900.
 

DT4K

Diamond Member
Jan 21, 2002
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Originally posted by: Skoorb
A typical reputable subprime lender may charge three percentage points more than a conventional bank lender. On a modest mortgage of $90,000, for example, shaving three percentage points from a loan would save homeowners $160 per month, or over $1,900 a year on lower mortgage costs had they known that their credit score was strong enough to secure better loan terms.
How's that possible? 3% of 90k is $2700, and even allowing for the slowly shrinking principle it should be still $2600+, not $1900.

Depends on the rates.

90,000 mortgage for 30 years:

At 6%, payment would be 539.
At 3%, payment would be 379.

Savings of $160 per month.