arrow

Got a Home in Virginia?
Get Your Best Mortgage From Just 2.21%

Your Credit Score Will Make or Break Your Mortgage Refinance

by


If you’re shopping for mortgage refinance rates and are frustrated because top mortgage companies like Amerisave are quoting interest rates much higher than they’re advertising, the likely culprit is your credit. It’s true that lenders use several factors including loan-to-value ratio when quoting you mortgage refinance rates; however the most import is your FICO credit score. Here’s how your credit score can make or break your mortgage refinance, even if the lender doesn’t deny your application.

» Mortgage Lender Spotlight «

Each month we showcase exclusive offers from top lenders
that can save you thousands of dollars on your next home loan.

Here’s an example how credit score affects your payment on a 30 year, fixed-rate mortgage loan:

Example One:

• Mortgage Amount: $300,000
• Fico Score: 760
Refinance Mortgage Rate: 4.25%
• Payment Amount: $1,475
• Total Lifetime Interest Paid: $231,000

Example Two:

• Mortgage Amount: $300,000
• FICO Score: 650
• Mortgage Rate: 5.0%
• Payment Amount $1,610
• Total Lifetime Interest Paid: $280,000

In this example, less than ideal credit costs you around $100 each month, effectively negating the benefit of refinancing over the lifetime of your home loan. That small difference in your credit score totals an additional $50,000 that you’re paying out unnecessarily.

The good news is that there are steps you can take to make sure your credit score isn’t holding you back from today’s lowest mortgage refinance rates. First, avoid applying for new credit for at least 90 days before submitting your application for mortgage refinancing. Second, keep the balances on your credit cards low as a maxed out credit card will drag down your credit score like a boat anchor. Lastly, make sure you’re paying your bills on time every month.

You can learn more about getting the best mortgage refinance rates for your next home loan without paying unnecessary fees by checking out my free Underground Mortgage Videos.

People Who Read This, Also Read:



{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: