By now you’ve probably heard the term, credit score. It’s a fancy word that helps lenders determine the, “probability that a person repays his debts.” Your score is based on your past transactions and how well they were repaid. The better your credit score is, the lower your interest rate will be on your mortgage loan. A lower interest rate means an overall cheaper house over the life of the loan.
While having a lower credit score isn’t ideal, it’s not always a deal breaker. The LaForest Team is committed to finding unique and viable solutions to help families in Northern Colorado realize the dream of owning a place to call their own.
Generally speaking, your credit score affects your mortgage rates in these ways:
740 and Above – If your credit score is above 740, you’ll likely qualify for the best mortgage interest rates from lenders
620 – 740 – You should have no issue
620 or Below – It is likely going to be difficult to qualify for a mortgage loan if your credit score is less than 620, but it is possible under certain circumstances
Those with better credit will benefit from a mortgage rate that is as much as a 1.5% better rate than those who have had an unfortunate event that has brought their credit score down. Over the life of the mortgage loan, a percentage point and a half can add up to a much more costly home.
If you have poor credit, don’t fear. The LaForest Team is here to help. Start by using these steps to improve your credit and work with our team to repair any damage to your score. We’ll help you get where you need to be in order to make home ownership possible for you and your family.
Not sure what your credit score is or want to work towards improving your score in order to qualify for a home loan? Contact us, your Greeley, Colorado mortgage experts who will help you understand the ins and outs of your credit score and its affect on your mortgage rate.