I bought my three credit scores and they are excellent. My wife and I are recently out of college and can afford a mortgage in our target range, but we don't have a large down payment... we've got excellent credit but no downpayment. It would take quite a while to get a large down payment. We can have a few thousand for closing costs, first mortgage, or even a downpayment if the seller pays closings costs (happening a lot where I am now).
I spoke to Bank of America yesterday and they quoted us an 80/20, but both rates were a full percentage higher than we see on myfico.com and bankrate.com for rates we could qualify for. Instead of upper 5's and low 6's, they had our 80% a full percent higher at 7% and the 20% second mortgage at 7.5%. I know the second will be slightly higher, but I was expecting closer to 6% for the 80 and 6.5% for the 20. Is the only way to get the rates shown on these sites and the rates in the newspapers as national averages to have a full 20% to put down?
If so, why does credit score even matter? We've done well to keep high scores throughout college and since we've been married, we just had some debts to pay off and it would take years to make enough for a 10% or 20% down payment. We'd rent for a while, but it costs the same or more than mortgages!
Basically, is the only way to get the best rates (5.75-6.25) to have a large down payment? Or will some other mortgage banker or broker see the good credit score and not jack up the rate full percentage point just because the down payment isn't large?