Scoring w/Refinance

[recoverychick]

Will FICO make any adjustments for refinancing your mortgage to get a lower rate.  I'm about to close at 4.5% from 6% reducing my note by $200.00, no cash out.   The simulator says I could take a hit as big as 30 points.

Refinancing shouldn't hurt you.

[haulingthescoreup]

I agree, it shouldn't! Can't get them to listen to me, though.

I wouldn't think it would be that bad. Your higher-APR mortgage should show as closed, and the new one will replace it.

If it acts like my auto loan, you might have a one-month drop when it initially reports at 100% util, but after that, I wouldn't expect much of a ding. Plus there might be an overlap where both show open, putting you into the exciting world of holding two mortgages. But everything ought to settle down after that.

Maybe the sim (which can be pretty dense) is not acknowledging that it's a refi, and it thinks you're taking an additional mortgage, thus the projected drop. It can be hard to read the so-called mind of the sim. It reminds me a lot of the Whoopie Goldberg character in Ghost: basically making things up, but sometimes eerily accurate.