Learn about Credit Score Tiers and how they affect Refinance Mortgage Rates and Home Loan Qualification

We put together the following grids to help you see that there are different levels, or "Tiers",of credit scores which can impact refinance interest rates, terms, maximum-allowed amount that can be financed, and even eligibility for various refinance loan programs. This is a general look at FICO scores, for there is no "official" refinance credit score grid, but the following tables should give you a basic idea of where your particular credit score falls within the general tiers.

Tier 1 being the best, the closer you are to Tier 1, the more you will be eligible for lower refinance interest rates and a wider selection of refinance loan programs.

Not at a Tier 1 Credit Score? A FHA home loan refinance can be the answer for low mortgage rates for those with less than perfect credit scores. Don't despair if you are not at a Tier 1 credit level. A skilled refinance mortgage professional with access to an extensive database of mortgage lenders can often find very competitive refinance rates and loan terms for people with less than perfect credit. In fact, those with poor credit scores can get low mortgage rates with a FHA home loan refinance.

Tier 1: 720 FICO Credit Score and above

Those individuals with credit scores in the "Tier 1" range enjoy the advantage of qualifying for the very best refinance rates available. In addition, it provides for the highest Loan-to-Value (LTV) amount to be refinanced, up to 95% of home value in most cases. Also, those with "Tier 1" scores will qualify for the widest refinance program options, such as "Stated Income" and other reduced documentation refinance programs.

Click on your credit score in the tables below
to see how your score stacks up.

Tier 1

Upper Tier 2: 680 to 719 FICO Credit Score

The "Upper Tier 2" score range is very close to Tier 1, except that qualifying refinance interest rates will be slightly higher and the Loan-to-Value (LTV) amount to be refinanced may be capped at 90% of home value for some refinance programs

Tier 2: 620 to 679 FICO Credit Score

Those with credit scores in the "Tier 2" range will qualify for competitive refinance interest rates, but most likely a bit higher than Upper Tier 2 rates. Also, individuals with Tier 2 scores may be capped at 90% Loan-to-Value (LTV) amount to be refinanced and will experience a reduction in the number of reduced-documentation refinance loans available to them.

Tier 3: 580 to 619 FICO Credit Score

Individuals with credit scores in the "Tier 3" range will notice a bigger difference in qualifying refinance rates as opposed to rates in the upper tiers. Using the right refinance lender is key here, as refinance rates and programs can vary significantly in this range among lenders. Loan-to-Value (LTV) caps may be as low as 80% to 85%, depending upon the refinance program. Those with Tier 3 credit scores may not be eligible for reduced documentation refinance programs. An FHA refinance loan is a nice program for individuals in this range, especially for those wanting to refinance a high percentage of their home's value. Since FHA refi's are not really score driven, you can refinance for as much as a 97% LTV and get a low competitive fixed rate.

Tier 4: 500 to 579 FICO Credit Score

Those in the "Tier 4" credit score range will have less refinance options than the tiers above. Interest rates will be significantly higher and LTV will most likely be capped at 80% of the home value. Most likely, and individual in this range will not be eligible for reduced-documentation refinance programs. As with Tier 3, an FHA refinance program is highly recommended for those with Tier 4 credit scores.

Tier 5: Below 500 FICO Credit Score

It can be very difficult to refinance with a middle FICO credit score that is below 500. Generally, you will need to have significant equity in your home in order to qualify. Also, the associated refinance interest rates can be very high. One option for people in this situation is to contact a credit restoration company. Often times, credit scores can be raised in a relative short period of time to allow for eligibility in better refinance programs.