You’ve decided it’s time to purchase a home, and you’re getting your finances in order. You have sufficient income and savings, and you’ve even been browsing some properties. Now it’s time to talk to a mortgage lender and find out what kind of rate you qualify for. There are several factors that can affect your mortgage rate, and one of the most important is your credit score. Typically, the higher your score, the lower the interest rates you’ll be offered by lenders. According to our team of experts at GVC Mortgage, knowing how your credit score affects your mortgage rate and working to increase it will help you in the loan-approval process and make purchasing your home a smoother process.
What Does Your Credit Score Mean?
A credit score is a number assigned to a person that indicates their ability to repay a loan. According to bankrate.com, most credit scores grade the individual on a 300-850 point range, and anything over 750 is considered an excellent score. A higher score indicates a lower risk to the lender, so they are more likely to offer lower interest rates, though rates can vary from lender to lender. A lower interest rate means you will be paying less interest overall and your monthly payments will be lower.
How Can You Increase Your Credit Score?
If your credit score isn’t as good as you’d like it to be, there are steps you can take to increase it before speaking to a lender. Your first step should be to obtain a credit report to review your score and look for any mistakes or outstanding debt that you weren’t aware of. There are several websites that will provide free reports such as creditkarma.com and freecreditreport.com. You should also clear up any accounts that you have with collections, and make sure to pay all of your monthly debt payments on time.
Who Can You Call with More Questions?
If you think you’re ready to begin the pre-approval process or if you have more questions about potential mortgage rates, give GVC Mortgage a call at (317) 564-4906. Our knowledgeable team can walk you through the process and help you begin your loan application. Our office is convenient for anyone in the Carmel, Fishers, or greater Indianapolis area. Get one step closer to homeownership by contacting us today or applying online.