Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: Cherry Office Furniture - How to Find Cherry Office Furniture to Email A Fax - How to Email a Fax

Mortgage Credit Score - Credit Scores and Mortgages - What Lenders Look At, Credit Score and Mortgage Rates, Other Factors

How Does Your Credit Score Impact Your Chances of Getting a Mortgage Loan?

loan pay money debt

Before you are approved for a mortgage loan, the lender will have to check your credit score. Your scores will be pulled from Experian, TransUnion and Equifax and examined. The creditor will look at many things before deciding if you should be granted a mortgage loan.

What Lenders Look At

Your lender will look at your mortgage and credit history. He will want to know if you have paid past mortgages on time, and how you handle your debts. He may look at your accounts, as well as your credit score.

You should make sure your credit report is up to date and accurate before allowing the creditor to check your credit score. If there is any inaccurate information, it could prevent you from getting your mortgage loan.

Credit Score and Mortgage Rates

If you are approved for your mortgage, your lender will also use your mortgage credit score to decide your interest rate. If you have a low credit score, you are considered to be a high-risk borrower. Because of that, your lender will charge you a higher interest rate than he would if you had good credit. If you pay back all of the money, he will be rewarded for having faith in you by getting back the loan’s principle, along with a large amount of interest.

On the other hand, good credit is rewarded. If your credit score is 760 or higher, you will have an interest rate around 5.78%. The better your credit, the less you will have to pay the lender in interest. Thus, it is a good idea to clean up your credit prior to applying for a loan.

Other Factors

While your mortgage credit score is certainly an important factor in deciding your creditworthiness, it is not the only factor lenders consider. They also look at your income levels and the amount of money you owe. If you make a lot of money but only have a little bit of debt, you will look good to lenders. However, if your income is low and your debt is high, lenders will look at you as a high-risk borrower.

Credit scores are important when looking for a mortgage loan. People can work on their credit scores prior to applying for credit. They can clear up negative accounts and pay down some of their debt. Then, they will look more favorable to lenders.

Credit And Card - How to control credit and card debt [next] [back] Credit For People With Bad Credit - Credit Guide for People with Bad Credit - Types of Credit for People with Bad Credit, Secured Loans, Payday Loans

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or