Should You Tank Your Credit for a Better Mortgage Deal? Here's What the Experts Say

An important disclaimer about the trend of tanking your credit score.

Today, we’re here to address a concerning question that has been circulating: “Should I purposely lower my credit score to get better pricing on a mortgage?” This is a loaded question, and we’d like to clarify some facts about recent changes in guidelines and rules set by Fannie Mae and Freddie Mac.

In short, the answer is no, you should not tank your credit. Yes, Fannie Mae and Freddie Mac aim to make homeownership more accessible to people across the US by improving pricing for those with lower credit scores. However, while this may seem like a disadvantage to those with higher credit scores, there is still a significant benefit to having good credit. The pricing difference between great credit scores (740 and above) and okay credit scores (640 and below) has simply become smaller.

“Good credit still gets rewarded.”

It’s important to note that these changes only affect purchase loans, not refinances, except in cases where cash is not being pulled out. Also, it’s worth mentioning that Fannie Mae and Freddie Mac want to promote homeownership, so if you already own a home, the pricing will not be as favorable as it is for first-time buyers. Therefore, we advise against purposely lowering your credit score since it will not significantly improve pricing, and good credit is still beneficial in the long run. 

Check out this link if you’d like to learn more. If you have any questions about buying, refinancing, or investing, we are happy to help. Just call or email us. We look forward to hearing from you!

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