Finance
What is 'credit score' and how does it affect a Hawaii borrower's mortgage terms?
AA. A score used only for credit card applications; not relevant to mortgages
BB. A numerical representation of creditworthiness; higher scores result in lower interest rates, better loan terms, and approval for larger loans✓ Correct
CC. A score that only affects the down payment requirement
DD. A government-assigned number that cannot be improved
Explanation
Credit scores (FICO or VantageScore) range from 300-850. Higher scores indicate lower default risk. In Hawaii's high-cost market, even a small difference in interest rate due to credit score can mean significant savings over 30 years. Scores affect not only rate but also loan program eligibility, down payment requirements, and PMI rates.
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