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Mortgage Scores

dakota911
Member

Mortgage Scores

So do most FHA lenders use the Fico 8 or the Mortgage 4 score to qualify you for a mortgage loan?

Message 1 of 7
6 REPLIES 6
Irish80
Moderator Emeritus

Re: Mortgage Scores


@dakota911 wrote:

So do most FHA lenders use the Fico 8 or the Mortgage 4 score to qualify you for a mortgage loan?


Most use the 04 model

Message 2 of 7
iv
Valued Contributor

Re: Mortgage Scores


@Irish80 wrote:

@dakota911 wrote:

So do most FHA lenders use the Fico 8 or the Mortgage 4 score to qualify you for a mortgage loan?


Most use the 04 model


Not most - all.

 

The standard scores currently required are:

  • Equifax Beacon 5.0

  • Experian/Fair Isaac Risk Model V2SM

  • TransUnion FICO Risk Score, Classic 04

 

On the MyFICO 3-B Score Report, those appear as:

  • Equifax FICO Score 5

  • Experian FICO Score 2

  • TransUnion FICO Score 4

These are the scores previously commonly referred to in these forums as "04".

 

The only alternative to those three score models is manual underwriting with non-traditional credit - FICO 8 is not (currently) in the mix for GSE-backed loans.

EQ8:850 TU8:850 EX8:850
EQ9:850 TU9:850 EX9:850
EQ5:788 TU4:810 EX2:809 - 2021-05-06
Message 3 of 7
dakota911
Member

Re: Mortgage Scores

Wow that seems very complicated!  

 

If a husband and wife have different scores how do they average those? We are working really hard getting our scores up before we apply in a year or two. Right now one set of our scores is:

 

  • Equifax FICO Score 5 - 562
  • Experian FICO Score 2 - 609
  • TransUnion FICO Score 4 - 555

So do they average or take the middle score? Any idea why such a deviation in scores?

Message 4 of 7
Revelate
Moderator Emeritus

Re: Mortgage Scores


@dakota911 wrote:

Wow that seems very complicated!  

 

If a husband and wife have different scores how do they average those? We are working really hard getting our scores up before we apply in a year or two. Right now one set of our scores is:

 

  • Equifax FICO Score 5 - 562
  • Experian FICO Score 2 - 609
  • TransUnion FICO Score 4 - 555

So do they average or take the middle score? Any idea why such a deviation in scores?


They take the middle score.

 

Even with identical files across the bureaus and the identical generation of algorithm, there will be some disparities as the each one was customized for the individual bureau.

 

In mortgage land the Experian score is an utterly different generation than the Equifax and Transunion scores, but we're only recently starting to understand even some of the differences as other than Equifax the other two weren't readily available to people who wanted to test the algorithm. 

 

Even now it's an expensive proposition, ergo not many people really do it, and it really is only those of us who are going through the mortgage process and taking snapshots of our credit as while EQ / TU seem to behave the same, we're seeing some marked differences in how EX reacts... and in my case EX is my middle score heh.

 

@iv: The Experian score, FICO Risk Model v2 is actually EX '98.  V3 is the EX '04 score but I've never seen a lender use that personally, am sure they're out there somewhere but not in mortgage land.

 

The only exception to the usual scores is with a non-traditional score or with a portfolio lender who can do whatever they want.  Jumbo space typically goes standard scores  too.




        
Message 5 of 7
Korcupj
Member

Re: Mortgage Scores

How often do the following scores change? If FICO 8 changes will these change?

Equifax FICO Score 5
Experian FICO Score 2
TransUnion FICO Score 4

Message 6 of 7
crunching_numbers
Valued Contributor

Re: Mortgage Scores

Maybe. Probably. It depends on what changed in your data. They are different calculations and there is not a direct correlation between the two models. Some things are weighed more heavily in one model than in the other. In other words, something can be more heavily penalized under one of the scoring models than in the other, so that a change may be seen in only one score version. As a general principal, they both will move up or down together, but that is not always the case. 


Starting Score: 693 TU FICO, 679 EQ FICO
Current Score: FICO 8 = 844(9/15) EQ, 827 TU, 811 EX (7/15); mortgage FICO= 758 (9/15)EQ5, 797 TU4, 748 EX2 (7/15)
Goal Score: 750+, but shooting for the 800's
Hyatt Visa Sig ($23K), Amex BCP (24.8K), BofA Travel Rew Sig (22.5K), B&N World MC (22.3K), Amex RP Gold (NPSL w/ S&T), Cash+ Sig (20K),United Mil+ExpSig (16.3K), FNBO Visa (13.1K), Hilton Surpass (10K), Freedom Visa Sig (8.6K), Disc It (16.4K), Citi Dia Pref MC (3.7K),Sam's MC (10K), Wally (7.5K), JCP(5.3K), Costco (2K)
Message 7 of 7
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