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Does Having A High Credit Score Decrease My Mortgage Rate?

By Bob Redtree

Credit is one of the most important issues facing consumers today. It affects every aspect of your purchasing power, from credit card acceptance to mortgage rates.

How credit scores affect purchasing

The higher your credit score the lower your risk as a buyer. Creditors judge your ability and willingness to repay based on your past, and a credit score is the tool to rate your credit history. Credit scores can vary from low 400 (very poor credit) to high 700 (excellent credit). You may receive lower interest rates, better terms on a loan as well as a better job offer with a high credit score.

Does high credit score decrease my mortgage rate?

Whether you are filing for an initial mortgage or refinancing your current mortgage, a high credit score may mean a significant reduction in your mortgage rate, therefore lowering your monthly payment. Lower monthly payments can mean the difference in paying additional principal toward your mortgage each month with the money you save. Many home loans are reduced by 5 to 7 years by paying more towards your principal each month.

Differences in mortgage rates

Mortgages can range from fixed to variable rates and those differences can be quite significant. Having a high credit score can decrease your mortgage rate by qualifying you for better terms on your loan as well as a low fixed rate. Variable rates may begin low but the rates can change every 6 months and your credit score has an impact on those rate variations as well as the market rate for loans. Typically in the past those with lower credit scores have had to settle for variable rate mortgages and try to raise their credit score by paying payments on time to creditors.

Related posts:

1. Does Having A High Credit Score Decrease My Mortgage Rate?
2. Does Having A High Credit Score Help My Mortgage Rate?
3. How Will My Credit Score Affect My Mortgage Rate?
4. What Are Mortgage Interest Rates For An Average Credit Score?
5. How Does My Credit Affect My Mortgage Rate?