Home buyers can save a good amount of money on their loan if they are walking in with a good credit score. No one needs an absolute perfect score, but the better your credit history is than the more likely you are to quickly qualify for a mortgage. Not only this, but you can also save money. Don’t allow this to intimidate you if your score is not what you’d like. 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, so always apply regardless of your uncertainties.
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. In addition to lowering your monthly payments, it can also be harder (or take longer) to qualify for a loan with a poor score.
The ideal score is, generally, from 760-780 and up. Although, 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.
If you are working on improving your credit score, check out our recent article here on the best methods.