Mortgage Home Loans by Sean Young

Colorado Home Loans | NMLS: 191647

  • Contact
    • Contact Sean
    • About New American Funding
    • About Sean
  • Loan Programs
    • FHA Home Loans
      • FHA Home Loans
    • VA Home Loans
      • VA Funding Fee Table
      • VA Home Loans
    • Metro Mortgage Assistance Plus
  • Testimonials
  • Apply Now
  • Blog
  • Metro Mortgage Assistance Plus
  • RealtorĀ® Resources
    • Agent Mastermind Webinars
  • Mortgage Info
    • Mortgage Calculator
    • Closing Costs
    • Document Checklist
    • Home Appraisal
    • Home Inspection
    • Interest Rates
    • Loan Process
    • Mortgage FAQ
    • Mortgage Glossary

Understanding Your Credit Score And How It Impacts Your Home Ownership Prospects

June 10, 2014 by Sean Young

Understanding Your Credit Score And How It Impacts Your Home Ownership Prospects

Understanding your credit score and how it impacts your home ownership prospects your credit score is an important part of your financial profile. It has a direct impact on your ability to take out loans.

The score itself is a numerical reflection of your credit history. It gives lenders a way to discern your reliability before approving a loan like a mortgage for instance.

Though this is the basic function of a credit score, it can also have a far-reaching influence over other aspects of home ownership.

Mortgage Loan Approval: Will Your Score Make the Cut?

First and foremost, the status of your credit score is a deciding factor in whether or not you are approved for a loan.

Even if you put down a large down payment on your home, a low credit score can still cause the loan to be rejected. For this reason, it’s best to wait until you’ve built up a good credit score before looking to purchase a house.

Mortgage Interest Rates: The Lower The Score The Higher The Rate

High interest rates are another reason to hold off on purchasing a home until you’ve obtained a very good credit score. While applying for a loan with the minimum credit score required might get the loan approved, it also means having to pay higher interest rates.

Shooting for a credit score above the bare minimum before applying for a mortgage will increase the likelihood of receiving a much lower interest rate. A higher credit score demonstrates a credit history of timely payments and the ability to successfully pay off debts, which are key factors in mortgage approvals.

Homeowner’s Insurance Approval And Premium Rates

An insurance broker running a credit check might seem a little out of the ordinary, but in actuality when is comes to home insurance, companies frequently run credit checks on prospective clients. When an insurance company inquires about your credit history, all they receive is your credit score and nothing more.

The nitty-gritty details of your credit history remain private. So, why are insurance companies running credit checks in the first place? Credit scores are an integral part of the scoring system they use to determine premium rates for each client.

Though your credit score might seem irrelevant in determining how likely you are to file an insurance claim, the industry argues that there is a documented connection between those who are more likely to file insurance claims and the lowly state of their credit scores. This trend has led insurance providers to offer higher insurance premiums to those with lower credit scores.

In some cases companies may refuse to insure a client based on a poor credit rating. Credit scores have a profound influence over financial transactions. You ability to make a large purchase like a new home can be severely hindered by a poor credit score.

If you have a low credit score, consider taking some time to repair your credit history before applying for large loans. Correct any lingering errors on your credit report and get into the habit of making consistent, timely bill payments.

Addressing these issues could dramatically improve your credit score in a year’s time, putting you in a much better position to tackle home ownership.

Filed Under: Credit Scoring Tagged With: Credit score, Home Buying, Mortgage, Real estate, real estate tips

Sean Young Loan Officer
Click Here
to Apply Now →

Get a Rate Quote →

Five Star Mortgage Professional
VAREP
Top Mortgage Broker in Denver

Connect with Me!

Mortgage-Backed Securities & Treasuries - Click Below for More Information

Loan Program of the Month

Visit Sean's profile on Pinterest.
Sean Young

Browse Articles by Category

Search for a specific subject

Recent Articles

  • The Top Reasons To Downsize When You Retire
  • The Top Tips To Remember When Moving
  • Call in the Pros: 4 Ways That Using a Mortgage Professional Will Save You a Lot of Money
  • The Type of Home You Want to Buy Determines Your Closing Cost and Here’s Why
Equal Housing LendingNMLS Consumer Access


DORA

Our Location


5299 DTC Blvd Suite 300
Greenwood Village, CO 80111

Copyright © 2022 · Powered by MySMARTblog