The Relationship Between Mortgage And Credit Score
The Relationship Between Mortgage And Credit Score: Getting a mortgage is a big milestone in one’s life. That said, getting a mortgage is not as easy as it sounds. There are a few pre-requisites that need to be fulfilled before you are able to get a mortgage. Your credit score plays a very important role in getting your desired rates.
The mortgage costs vs credit scores are a comparison that can give you a good picture of the mortgage rates you might be getting in the market.
What is a Credit Score?
If you are applying for a mortgage for the first time, you will repeatedly hear the lenders asking for information about your credit score. Simply put, your credit score is a three-digit number that represents your ability to repay the debt.
The score typically ranges from 300-850 and is managed by three main credit bureaus on the basis of the number of good-standing accounts you have and how regular you are in making your payments.
Your Credit Score and the Mortgage Rates You Will Be Offered!
When you are applying for a mortgage, your credit score has a huge impact on the mortgage rates you will be offered. Obviously you would want the lowest mortgage rates available.
Your credit score affects the mortgage rates directly. The higher your credit score is, the lower will be the mortgage rates offered to you and vice versa. A few points on your credit score can affect your monthly mortgage payments by hundreds of dollars. So it is important to maintain a good credit score. That said, there is no definite guideline for lenders regarding the qualifying credit score for a lower interest rate.
Improve your Credit Score to Get the Best Mortgage Rates
It is important to understand the mortgage costs vs. credit scores ratio before you head out in the market to get the best mortgage rates. You can improve your credit score and get a good mortgage rate by reviewing your credit report carefully and correcting any mistakes or errors. By simply correcting any errors, you can improve your score. Be regular with your payments and hold off on opening any new credit accounts while you are looking for a mortgage.
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