Due to the recent housing crisis foreclosures are estimated to reach 2 million by the end of next year. And that is causing bankers to rethink the way they set mortgage rates.

Previously there was a great divide of people that had a credit score of 600 or better and those that did not, but now the up-front fees are gradually varying based on credit scores. And some experts are saying that mortgage points may soon start resembling home owners insurance more than anything with factors such as the material of your house, whether it’s in a trendy neighborhood and its replacement cost coming into consideration.

Also being included in the up-front point consideration is the size of your down payment, your employment history, the house’s history and anything else that might affect repayment of the loan. Besides that you could be charged higher interest rates if you choose to live in a less up-and-coming neighborhood or the color of your house is bright pink.

This could be good news for you though if you have excellent credit records and conventional taste as it will most likely pay off in the form of lower than average interest rates and better mortgage terms. For now, credit scores matter the most, and the higher your score is, the lower your rate and fees will be.

A New Mortgage Rate Calculation?