How a Low Credit Score Can Affect Your Loan
A good credit score can save home buyers a good amount of money when it comes to their loan. While no one needs an absolute perfect score, the better your credit history the more likely you are to quickly qualify for a mortgage in addition to saving money. Although, don’t be fearful as most lenders want to find something that can work for you, and there are programs such as down payment assistance if you find yourself tight on cash.
Industry experts estimate that borrowers with very good credit scores of 740 to 799 can save up to $29,000 on a 30-year fixed rate mortgage of $234,400 compared to borrowers with fair credit scores of 650. Aside from lowering your monthly payments, it can also simply be harder or take longer to qualify for a loan with a poor score.
Generally, the ideal score is from 760-780 and up. Although, as previously mentioned, there are numerous ways to work with a low credit score. As long as your recent history shows you have been financially responsible and you are working to improve it, there can be ways to make a mortgage work for you.
If you are working on improving your credit score, check out our article here on the best methods.