What is a Mortgage Loan?
In a mortgage loan, a property is used as a collateral so the borrower can make a real estate purchase without paying the entire value up front. Some banks also offer “Loan against property “as a form a mortgage loan where the borrower can leverage the economic worth of the property to get immediate financing for other needs. When it comes to a mortgage home loan, you must always aim to decrease the interest rate so that you can repay the loan as soon as possible to claim complete ownership.
There is one magic mantra that decides your eligibility and controls the interest rates when it comes to mortgage loan – the quality score.
Good Credit History equals Better Loan Deals
Credit score is a number that finance companies use to judge your financial health. Deciding whether to approve your application for a credit product like a loan or a credit card is largely based on your credit history. You can build up a good credit score over the time by paying all your bills on time, not having any legal action taken against you for defaulting on debts and not filing for bankruptcy.
It is also important to note that interest rates for mortgage loans depend on how risky you are and that decision about risk is based largely on your credit score. Having a quality score becomes very essential if you are looking to clinch an attractive loan deal.
Interest Rates and Credit Score
It is important to have a clean credit history as it will greatly improve the chances of loan approval. Also, interest rates are influenced by credit scores as described below.
How to get Low Interest Rates for Mortgage Loans
The interest rates for mortgage loans are decided based on your credit worthiness. If you have a quality credit score, it will easier to get your loan approved and also avail low interest rates.
Also, before applying for a mortgage loan, make sure that you have compared all the loans in the market. For this purpose, you can use a third party financial comparison site like BankBazaar. If you know your credit score, it will be easier to negotiate the interest rates with the bank if possible.
A good credit score can make or break your loan. Though building a good credit score will take a lot of time, you can achieve and maintain it by being financially responsible.
In a mortgage loan, a property is used as a collateral so the borrower can make a real estate purchase without paying the entire value up front. Some banks also offer “Loan against property “as a form a mortgage loan where the borrower can leverage the economic worth of the property to get immediate financing for other needs. When it comes to a mortgage home loan, you must always aim to decrease the interest rate so that you can repay the loan as soon as possible to claim complete ownership.
There is one magic mantra that decides your eligibility and controls the interest rates when it comes to mortgage loan – the quality score.
Good Credit History equals Better Loan Deals
Credit score is a number that finance companies use to judge your financial health. Deciding whether to approve your application for a credit product like a loan or a credit card is largely based on your credit history. You can build up a good credit score over the time by paying all your bills on time, not having any legal action taken against you for defaulting on debts and not filing for bankruptcy.
It is also important to note that interest rates for mortgage loans depend on how risky you are and that decision about risk is based largely on your credit score. Having a quality score becomes very essential if you are looking to clinch an attractive loan deal.
Interest Rates and Credit Score
It is important to have a clean credit history as it will greatly improve the chances of loan approval. Also, interest rates are influenced by credit scores as described below.
- A quality credit score implies that you have managed your financial affairs carefully. It tells the banks and other parties that you are trustworthy. Hence, for people with a quality credit score, the interest rates on loans will be lower and the access to credit will be easier.
- A poor credit history will suggest to the bank that you may not fulfil the loan agreement and may default on repayments. Because banks will interpret a bad credit score as “high-risk”, the interest rates will be higher and it will be difficult to access credit products.
- Having a no credit history is still better than having a poor credit history. Lenders may check your payment history, utility bill payments, rent history and how you manage large expenses to assess your credit worthiness.
How to get Low Interest Rates for Mortgage Loans
The interest rates for mortgage loans are decided based on your credit worthiness. If you have a quality credit score, it will easier to get your loan approved and also avail low interest rates.
Also, before applying for a mortgage loan, make sure that you have compared all the loans in the market. For this purpose, you can use a third party financial comparison site like BankBazaar. If you know your credit score, it will be easier to negotiate the interest rates with the bank if possible.
A good credit score can make or break your loan. Though building a good credit score will take a lot of time, you can achieve and maintain it by being financially responsible.