Does your credit score have much to do with the mortgage rate you are offered? You bet it does, and so that is why it’s always mentioned to take a good close look at your credit report and score well ahead of buying a home. Do you know where your credit score stands today?
You certainly want to understand how your credit score affects your mortgage rate. When you buy a home, you want to be sure that you lock in a good rate. You are making a big investment, and you are going to be paying on that home for years. It is highly important that you prioritize your credit score ahead of mortgage applications.
One of the reasons you need to do so far ahead of time is because it takes time to improve your credit score. If there are things you can do, you could work towards those goals while you build up your finances towards buying a home. When it’s time to buy, your credit score will have improved, and you will get a better interest rate.
Are you willing to work towards that resolve? If you do, it could save you thousands of dollars over the long run. If you want, do the math by comparing two different interest rates to see what you discover. You’re going to find out that there is quite a bit of savings waiting for you.
Now there comes a point in time when you decide to start applying for loans. Your credit score won’t be perfect, and you’re going to also want to realize that you can compare interest rates with different lenders. When you do that, you will see that there are different types of lenders and mortgages, too.
Plus you know that your credit report and score aren’t the only factors that impact the type of mortgage loan that you get. Work towards better finances as a whole as you plan to buy a home. You’re going to have fun doing this, but you’re also making an important business decision.
Hopefully, your credit is in good shape already, and maybe simply paying down some credit card balances could work out in your favor. Think about how much money you could save on interest, and you’re going to see that if you are eventually offered a better rate. Get a good home loan by working on your credit ahead of time.
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