How Your Credit Score Affects Your Mortgage

Home ownership is the biggest financial responsibility you will ever take on, especially if you will make the purchase through a financing service, such as a mortgage. A home loan can reach significant heights, but this does not automatically mean you no longer have ways to trim your expenses down. With the right tactics, combined with the help of a reputable mortgage lender in Utah, such as Altius Mortgage Group, you will have a much better and easier time managing your housing-related debt.

Where to start

One of the most important factors that lenders consider when gauging a borrower’s mortgage eligibility is credit rating. Applicants who boast of a high credit score have higher chances of securing a loan with a much better interest rate than those who have a bad to poor score. Those who have a less-than-stellar credit history ultimately pay more for their mortgage, since they pay more towards their loan’s interest.

How important checking your credit report is

You should prioritize how your credit looks like before applying. Whether you have a good rating or not, you should request a copy of your report, to ensure that nothing is amiss. Even the slightest error in this document can already mean several points of increase in the interest rate you will receive. If you do have a poor rating, you should take action to improve it, as this significantly boosts your chances of getting a better rate. Improving your score makes you look less risky in the eyes of lenders; thus, they are more likely to give you favorable interest rates. You should do this despite mortgage rates currently being at their historic lows for the longest time. Keep in mind that interest payments, especially over a duration of 30 years, can quickly balloon and consume a huge portion of your income and savings.