Buying a house can be the biggest investment you can make in your life.
Why pay sky-high interest rates when having a good credit score can help you qualify for lower interest rates?
Follow these tips to having a smart mortgage and a great credit score.
Seriously think about all the effects that having a mortgage will entail.
Before applying for a loan, you should consider how much you’ll be able to afford on a monthly basis.
Even if you could get approved for a large loan online, it may not be a smart move to take on a huge monthly loan payment.
You have to take homeowner’s insurance, property taxes, and other fees associated with buying a house into consideration.
Do your research.
Find the lowest mortgage rate possible by visiting local banks and credit unions.
You should do your research in a relatively short time period because multiple inquiries to your credit record can have a negative effect on your credit score.
At this point, you also be able to determine if an adjustable or fixed mortgage rate is right for you.
Re-evaluate your monthly bills.
When considering a mortgage, take a look at your other monthly payments.
Will it look like you’ll have trouble paying your mortgage?
At this point, pay down any credit card balances you may have.
And don’t finance anything else (like furniture or a computer) that will result in more monthly payments.
Your debt-to-income ratio is something that creditors look at when determining an interest rate for you.
Check your credit score.
Obtain a copy of your credit record and check it over to make sure there isn’t any fraudulent or inaccurate information on it. In general, you should look at your credit record every three months.
Any mistakes can impact whether or not you get approved for a mortgage. The three credit bureaus, Equifax, TransUnion, and Experian, will issue you a credit score between 300 and 850.
Anything above 680 is considered to be a “fair” credit rating and will generally allow you to get approved for many different types of loans.
However, the higher your credit score, the lower the interest rates will be applied to your loans, which means you’ll have a lower monthly payment.
That is why it literally pays to make timely monthly payments every month. Never having a late payment reflects positively on your credit record.…