When you start shopping for a car, you might be more concerned with additional features and specialty paint jobs than you are about the monthly bill. Unfortunately, the wrong financing can cost you dearly. Compound interest never sleeps, which means that you might be paying much more than you should if you work with the wrong lender. I want to help you to make great financial decisions, which is why I created this website. However, if you can remember a few tricks and keep those payments to a minimum, you can drive away with the car of your dreams without breaking the bank.
Before you make the decision to buy a house, there are a number of different steps you must take to make sure you are ready for this big event. Not only will it be important to make sure you are financially ready for this, but it is also important to take the time to view your credit score. Your credit score can affect the interest rate on your loan, and here are several things to understand about this.
Why Your Credit Matters
Any time you apply for credit, the lender will look at your credit report to see what your credit score is. The purpose of this is for the lender to determine the risk level you are at. People with great credit are considered low-risk borrowers. Because of this, lenders will typically offer better terms, including lower interest rates. People with low credit scores are not considered creditworthy, and this is why lenders may decline offering credit to them or may offer credit with higher interest rates.
The Score You Need For A Mortgage
To qualify for a mortgage loan, you will probably need to have a credit score of at least 660; however, if you want to qualify for the best interest rate available, you should aim for a score that is at least 740. There is a chance you will qualify for a loan even if your score is below 660, but the score you have will determine your interest rate.
The interest rate on your loan will affect the amount you must pay for your monthly payments and for the total loan. With a low interest rate on your loan, you will save a lot of money over the lifetime of the loan.
Base Your Decision On Your Credit Score
If you feel you are ready to buy a house and find out that your credit score is not high enough to qualify for the best interest rate, it might be worthwhile to wait for a few months before you apply. During this time, you can take actionable steps to help increase your score, and this may include the following tasks:
Once your score is high enough, you might be ready to visit a lender to apply for a loan. To learn more about the guidelines and requirements of home mortgages, contact a lender today. Click to read more about credit scores and mortgage companies.Share