Solano Real Estate Scene: Jim Porter
Article By: Jim Porter – June 13, 2025
My readers and clients are always hearing me say that the rich are getting richer and the poor are getting poorer and the one thing the rich all have in common is high FICO scores.
Having great credit is 100 times more important today than when I started working for Beneficial Finance in 1979, and 10 times more important than when I opened Solano Mortgage in 2003.
Another thing I say a lot when I am coaching loan officers, Realtors, young people and clients about financial literacy is that artificial intelligence and automated underwriting is here to stay and is only getting smarter, not dumber. Risk-based pricing for interest rates and credit decisions are made by computers based on algorithms, odds, data provided on the loan application and data that can be taken from third parties like credit bureaus, the IRS and websites like Zillow, Realtor.com, the Federal Reserve and TheWorkNumber.com.
The two first-time home buyer couples below are identical in every way other than FICO score.
Billy Joe and Bobbie Sue have a 680 FICO and darn good credit. They had a couple of 30-day late payments two years ago, but have been perfect ever since. They financed a new Dodge Charger eight months ago and have two Visa cards. One of the cards has a credit limit of $5,000 and a balance of $4,600, and the other has a limit of $3,000 and a balance of $2,000.
They saved $20,000 and granny gave them $30,000 to buy a house for $580,000. They put down a little more than 5% to obtain a 30-year fixed rate loan for $550,000 at 7.125% with a private mortgage insurance factor of 1.13%. The mortgage is $3,840 per month, and the PMI is $517. The seller gave them $10,000 for closing costs, so they were able to close escrow with only $40,000 out of their pocket, leaving them $10,000 in savings.
Frankie and Annette are identical in every way other than they have a 780 FICO and only have $40,000. They buy a house for $580,000 with $30,000 down, and like the other couple, the seller incentivizes them to purchase with $10,000 in closing costs allowing this young beach-loving couple to squeak into their very first home.
They obtain their loan from the same bank, and they rate-lock the same day as the hot-rod Dodge Charger-loving couple at 6.75% with a PMI factor of only 0.38%. This is $3,697 for the mortgage and $174 per month for the PMI.
This is $486 less monthly and all because of the 100-point difference in FICO. Twenty-three years ago, these two couples would have received the same rate and the same PMI. If Bobby Sue had a talented local loan officer, her lender would have had her pay down the two credit cards to less than 20% of the limit, which would have increased the FICO score to 750, which wouldn’t be as good as the other couple, but would have been at least $350 less per month.
Both couples are on cloud nine, feeling groovy about owning their own home, and if Billy Joe and Bobbie Sue cool it with the sitting around the house, getting high and watching the tube, they can have a 780 FICO by the time the next refi market comes in 2026.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
