How can your credit score affect mortgage refinancing?
Most lenders use your “FICO” (Fair, Isaac and Co.) credit score to evaluate any mortgage loan or refinancing application you make. So, before contacting them, it is wide to get a copy of your credit score.
If you are not familiar with how can your credit score affect mortgage refinancing. Well lets get in to it, basically it tells lenders, creditors and others if you are a good risk or a poor one in terms loans. The score is arrived at by a formula involving your history of paying off debts, like credit cards, mortgages and the like.
The bottom line is this: The higher your FICO score, the better chance you will get a mortgage “refinance” at a lower interest rate. Currently, any score of 620 or above is in the good range to excellent range.
If your score is below 620, then refinancing becomes more expensive in terms of interest rates. Since lenders consider you a higher risk, they want to ensure they will be repaid.
Where can you get your FICO score?
Several companies offer them on the Internet: myfico.com and the three major credit bureaus, (Experian.com, TransUnion.com, and Equifax.com) offer you your credit report and your FICO score, for a small one-time fee charged to your credit card. Equally important, they provide you with suggestions for improving your score.
Be sure to review your credit report carefully. If you find errors, ask the three major credit bureaus to correct them before you apply for refinancing. You should expect to receive a corrected credit report within 30 days.
If you or someone you know want more information on how can your credit score affect mortgage refinancing. Please give us a call at 909-920-3500. Or check our website www.TheSoCalLoanPro.com.
Teresa Tims is President of TDR Mortgage in Charming Downtown Upland CA. She prides herself in offering quality home loan products, competitive pricing and knowledgeable assistance when helping her clients select a home loan. Teresa is a life-long resident of the Inland Empire.