Alex Stenback has a great explanation of how a few point difference in your credit score effects what you could pay for your mortgage.
How a Three-Point Difference in Your Credit Score Could Cost You Thousands.
Now suppose your credit score is a still very good 718 – just three points lower than the previous example. here’s where it gets a little tricky – now you have a choice.
1. You can either pay an additional .5% of the $200,000 loan amount ($1,000) to obtain a 6% rate.
2. Or, you can accept a rate that is .125% or so higher, in lieu of the up-front fee.
In this case, 3 points will cost you $1000 as a 1-time payment or $16/month for 10 years. Ouch.