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This Is the Best Time of Year to Get a Mortgage

If you’re playing the waiting game with mortgage rates, you may not want to wait much longer.

A new study from Haus, the home-finance startup created by Uber co-founder Garrett Camp, examined what role seasonality, loan size, credit scores and other factors play in the mortgage rates that lenders offer borrowers.

The study found that much like the housing market itself the mortgage market ebbs and flows with the seasons. And January, as it turns out, is the best time of year to get a new home loan on average.

In January, lenders offer a discount of nearly 20 basis points compared to the time period between June and October when rates are typically the highest for the year. The cooler weather, in general, brings out lower mortgage rates, with December and February being the next-cheapest months based on the Haus study.

“While we can’t say for exact certainty why rates are lower in January than in the summer months, we can speculate that competition for customers matter,” Ralph McLaughlin, chief economist and senior vice president of analytics at Haus, said in the report.

“Since home buying and refinancing is seasonal, there is less mortgage origination in winter months, so it could be that lenders must lower their rates to stay competitive and attract business,” he added.

To produce the report, Haus analyzed loan data from Freddie Mac for more than 8.5 million mortgages originated between 2012 and 2018. When examining for seasonality in mortgage rates, the company controlled for other characteristics, including the borrowers, size of the loan and the property.

Nowadays, scoring the lowest rate possible can be akin to finding a needle in a haystack, McLaughlin noted. Although mortgage rates have risen from the record low set right before the New Year, they remain extremely low by historical standards. However, economists have warned that as the year goes on rates could rise, depending on the trajectory of the pandemic and the related economic recovery.

But the timing of when a prospective borrower applies for a new mortgage is just one factor that can save them money. The size of the loan is another consideration. Loans with balances between $350,000 and $450,000 typically fetch a 23-basis-point discount on the mortgage rate compared to mortgages under $100,000, Haus found.

The savings is actually a reflection of the cost for the lender to originate a loan. “The cost of paying someone to originate a loan is the same for a $500,000 mortgage as it is for a $100,000 mortgage, but the latter provides less of a return to the mortgage originator than the former,” McLaughlin said. “In order to help cover this fixed cost, lenders likely increase their rates for lower balance mortgages to compensate.”

Of course, borrowers can only control so much when it comes to the timing of when they apply for a loan or how large the loan is — especially if they are using it to buy a new home. As the study stresses, other factors can have an effect on the rate that’s offered. People with credit scores above 800, for instance, will receive mortgages with rates that are 42 basis points lower on average than borrowers with a score below 650.

And perhaps the easiest way to save money is by shopping around. Haus found that there was a difference of 75 basis points between the most and least expensive large mortgage lenders across the U.S. “This means that, all else equal, the same borrower would get a 5% rate with the most expensive lender and a 4.25% rate with the least expensive lender,” McLaughlin said.


How To Get The Best Mortgage Rate – Forbes

Learning how to get the best mortgage rate is an important part of getting a home loan. Over the course of a 30-year loan, the difference between a 4.00% interest rate and a 3.75% interest rate is more than $5,000 for every $100,000 you borrow. With larger loan amounts and larger interest rate differences, you’ll notice the impact on your monthly payment, too. Here’s what you should know to get the best mortgage interest rate.

10 Steps To Get The Best Mortgage Interest Rate

No matter where you’re starting from, and whether you’re applying for your first mortgage or your fifth, following these steps to get the best mortgage interest rate can save you real money—especially over the long run. These tips can help you whether you’re buying a home or refinancing.

REFINANCE ROADMAP: Forbes Advisor offers a pain-free guide to refinancing your mortgage and taking advantage of historic interest rates. Subscribe now to our free four-week newsletter.

1. Check Your Credit Scores and Reports

Any effort to secure the best interest rate for your mortgage should begin with checking your credit scores and reports with Equifax, Experian and TransUnion, the three major credit bureaus. Here’s an example of how to do this and what to look for.

At, you can sign up for a free account that will provide your FICO Score 8 and broad insights on what aspects of your credit need improvement.

For $4.95, you can access your FICO Score 2, which Experian says is the credit score most mortgage lenders use.

Experian also offers a tool called Experian Boost that can improve your credit score slightly by including your utility and mobile phone bill payment history.

Review your credit reports and check for inaccuracies on any item that’s dragging down your score. You can open a dispute online, by phone or by mail if you see any problems. lets you get free copies of your reports (but not your scores) from all three credit bureaus. You can get a free report as often as once a week through April 2021.

Learn more about how your credit score affects your mortgage rate and whether it makes sense to pay for a special version of your credit score.

2. Work on Your Credit Score

If your score is below 760, it’s worth the effort to improve your credit score by taking steps to pay down your balances and make all your payments on time. Having excellent credit will make you eligible for the lowest mortgage interest rates. The Loan Savings Calculator from myFICO is a great tool for estimating how much you could save on your mortgage by improving your credit score.

If you’re putting down less than 20% on a conventional loan, excellent credit will also make you eligible for the lowest mortgage insurance rates. But even if you have bad credit, you might be surprised by your loan options.

3. Save Up for a Bigger Down Payment

When you make a small down payment on a home, the lender considers you a higher-risk borrower than someone who makes a larger down payment.

One place where you’ll see lenders account for this risk is with private mortgage insurance (PMI). If you put down less than 20% on a conventional loan, you’ll usually have to pay PMI premiums. Until you have enough equity to cancel it, PMI will affect you the same way a higher interest rate would: by increasing your monthly payment and your total borrowing costs.

Saving up for a bigger down payment can help you avoid PMI altogether. Even if you can’t put 20% down, you can pay less for PMI with a larger down payment. On top of that, a larger down payment can actually get you a lower interest rate.

The more of your own money you’re willing to invest in the property, the less risky you’ll be for the lender, and they may be able to offer you a lower interest rate.

Having trouble saving up? Check Down Payment Resource to see if you’re eligible for any down payment assistance programs in your area.

What if you’re refinancing? This strategy still works. You can bring cash to closing to increase your equity.

4. Consider a Shorter Loan Term

When you take out a 15-year fixed-rate mortgage instead of a 30-year fixed-rate mortgage, the interest rate will normally be lower. In mid-September 2020, for example, the 30-year rate was 2.87%, and the 15-year rate was 2.35%.

You also could consider an adjustable-rate mortgage. Its introductory rate may be lower than what you could get on a fixed-rate mortgage. It depends on the market, though: In mid-September, a 5/1 ARM had an interest rate of 2.96%.

Even if you can get a lower rate on an ARM, you’re taking a risk. It might be cheaper in the short term, but it could be more expensive in the long term. Why?

  • No one knows what interest rates will look like when the ARM’s introductory period ends.
  • There’s no guarantee you’ll be able to refinance or sell when the ARM’s introductory period ends.

5. Increase Your Income

All else being equal, who would you rather lend money to?

  • Someone who earns $7,000 a month who will have to spend $3,000 (42.8% of their income) on their mortgage and other debt payments
  • Someone who earns $8,500 a month who will have to spend $3,000 (35.3% of their income) on their mortgage and other debt payments

If you want to minimize your risk, you’ll pick the second one. The higher your income compared to your debt, the less trouble you’ll have managing your finances in tough times. If your finances indicate that you’re someone who will keep paying your mortgage if something goes wrong, lenders may offer you a lower rate. Ideally, your debt-to-income (DTI) ratio should be 36% or less.

“That’s great, but I can’t just start earning another $1,500 a month,” you might be thinking. We hear you. Fortunately, there’s another way to improve your DTI ratio.

6. Decrease Your Debt

Decreasing your debt instead of—or in addition to—increasing your income also can improve your DTI ratio. And while earning extra income to throw at your debt is one way to pay it down, cutting your expenses might be another way to do it. About 41% of homebuyers cut back on spending, canceled vacation plans or reduced monthly payments on other bills, according to the 2020 National Association of Realtors Home Buyer and Seller Generational Trends report.

Lowering your debt-to-income ratio isn’t the only way having less debt can help you get the best mortgage rate.

Carrying less debt also can improve your credit score. (Income, however, is not a factor in credit scoring.) According to Experian, the ideal credit usage is below 6%. This means that if you have $10,000 of available credit through your credit cards, you should try to keep your balance across all cards below $600.

7. Apply with at Least Three Lenders

Thousands of mortgage lenders are competing for your business. So another way to make sure you get the best mortgage rate is to apply with at least three lenders and see which offers you the lowest rate.

Each lender is required to give you a loan estimate. This three-page standardized document will show you the loan’s interest rate and closing costs, along with other key details such as how much the loan will cost you in the first five years.

Comparing loan estimates to get the best deal is not as straightforward as looking at the interest rate and APR, however.

  • If you’re planning to keep the loan a long time, getting the lowest mortgage rate can be more important than paying the lowest closing costs.
  • The opposite is true if you don’t plan to keep your loan for very long.

8. Watch Mortgage Rates

Mortgage rates fluctuate constantly. The short-term changes tend to be small, but you want to lock your rate when it’s at a level you can afford. If you can lock your rate when rates are trending down, even better.

  • Prepare to take advantage of a possible rate drop by knowing what rates have been doing lately.
  • When rates move in your favor, ask your lender to lock your rate.

For example, someone shopping for a 30-year fixed-rate mortgage in September 2020 would want to be aware that over the last year, average rates have ranged from a high of 3.78% in October 2019 to a low of 2.86% in mid-September, according to Freddie Mac’s Primary Mortgage Market Survey. The strongest borrowers should expect to lock their rate close to 2.86% if they’re paying 0.8 in fees and points.

But those are average rates. Why not try to get a better-than-average rate?

9. Decide Whether to Pay Discount Points

A discount point is basically a fee you can pay at closing to reduce your mortgage interest rate. Paying points can be worth it if you keep your mortgage long enough. If you refinance or sell within a few years, paying points may not be worthwhile.

  • One point is equal to 1% of your loan amount, so if you’re borrowing $200,000, 0.8 points would cost $1,600.

How much can you lower your mortgage rate by paying points? It depends on market conditions, but a rate reduction of 0.25% per point is a good benchmark.

10. Don’t Make Any Big Moves

After doing all the work to improve your credit score and make yourself the strongest applicant possible, you don’t want to do anything that might jeopardize your standing with lenders. This isn’t the time to switch careers, nor is it the time to apply for additional credit. Try to keep everything the same as it was when you got approved for your loan.

Any big changes to your borrower profile could make you look riskier and force the lender to charge you a higher interest rate or even decide not to give you a mortgage at all. Your loan approval isn’t really final until you’ve gone through the mortgage underwriting process. Don’t give the underwriter any reason to think twice about letting you close.


The No. 1 Reason Homeowners Refuse to Refinance

Woman contemplating refinance
Photo by Antonio Guillem /

Around 19 million homeowners could save money on their mortgages by refinancing — but many fail to do so because “they’re not sure it’s worth it,” according to a recent survey.

A YouGov survey for Forbes Advisor found that 34% of survey respondents cited that reason for not refinancing. Forbes believes “borrower burnout” may be behind such reticence:

“As loans get older and borrowers have more exposure to lower rates, (homeowners) are increasingly confronted with chances to refinance. So even though rates are scraping near record lows, those seasoned borrowers don’t want to go through refinancing again.”

Clifford Rossi, an executive-in-residence and professor of the practice at the Robert H. Smith School of Business at the University of Maryland, tells Forbes that many borrowers simply don’t want to endure the paperwork and other hassles surrounding refinancing, even if they would save money.

The coronavirus pandemic is adding to the potential for refinancing headaches. During these tough times, millions of homeowners have asked for mortgage forbearance. This — combined with a large number of new mortgage requests in a red-hot housing market — has put pressure on mortgage lenders struggling to keep up with demand.

The result is that homeowners who try to refinance often face “stalled applications, poor communication between lenders and borrowers, and even misinformation,” according to Forbes.

Homeowners also are reluctant to refinance because they fear paying high fees, a factor cited by 16% of respondents in the survey.

Other reasons why people are reluctant to refinance now include:

  • Having already refinanced recently: 23%
  • Low credit score: 7%
  • Refinancing is too much work: 7%
  • Too busy to refinance: 5%

Why you should consider a mortgage refinance

Despite such concerns, a mortgage refinance can be a great deal right now. Mortgage rates continue to hover near all-time lows, so homeowner savings can be substantial.

If you are a homeowner, it’s likely wise to at least shop around to see what is available. To get started, check out our story “6 Tips for Refinancing Your Mortgage During the Pandemic.”

If you decide refinancing is right for you, continue your education process by reading “How to Refinance Your Home Loan.”

Then, stop by Money Talks News’ Solutions Center and search for the best rates on a mortgage refinance.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


Today’s mortgage rates creep lower | January 4, 2021 – Fox Business

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

Check out the mortgage rates for January 4, 2021, which are trending down since last Wednesday. (iStock)

Based on data compiled by Credible Operations, Inc., NMLS Number 1681276, mortgage rates have fallen since last Wednesday.

Continue Reading Below

  • 30-year fixed-rate mortgages: 2.500%, Unchanging
  • 20-year fixed-rate mortgages: 2.250%, Down from 2.375%, -0.125
  • 15-year fixed-rate mortgages: 1.875%, Unchanging

Rates last updated on January 4, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

To find the best mortgage rate, start by using Credible. Credible can show you current mortgage rates for conventional loans from multiple lenders and help you make an informed decision regarding your home loan.

Looking at today’s mortgage refinance rates

Today’s mortgage refinance rates have remained largely unchanged since last Wednesday. Mortgage refinance rates continue to hover at historic lows, with 30-year rates holding firm at 2.625% for 30 consecutive days and 15-year rates remaining at 2.125% for 25 consecutive days. If you’re considering refinancing an existing home, check out what refinance rates look like:

  • 30-year fixed-rate refinance: 2.625%, Unchanging
  • 20-year fixed-rate refinance: 2.625%, Unchanging
  • 15-year fixed-rate refinance: 2.125%, Unchanging

Rates last updated on January 4, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

A site like Credible can be a big help when you’re ready to compare mortgage refinance loans. Credible lets you see prequalified rates for conventional mortgages from multiple lenders all within a few minutes. Visit Credible today to get started.

Current mortgage rates

The new year brings a slight drop in mortgage interest rates today with 20-year rates falling by 0.125 percentage points since last Wednesday. Meanwhile, 30-year and 15-year interest rates hold steady at unprecedented lows.

Current 30-year fixed-rate mortgages

The current interest rate for a 30-year fixed-rate mortgage is 2.500%. This is the same as last Wednesday.

Current 20-year fixed-rate mortgages

The current interest rate for a 20-year fixed-rate mortgage is 2.250%. This is down from last Wednesday.

Current 15-year fixed-rate mortgages

The current interest rate for a 15-year fixed-rate mortgage is 1.875%. This is the same as ast Wednesday.

You can explore your mortgage options in minutes by visiting Credible to compare current rates from various lenders. Check out Credible and get prequalified today.

Rates last updated on January 4, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

How mortgage rates have changed

Today, mortgage rates are down compared to this time last week.

  • 30-year fixed-rate mortgages: 2.500%, the same as last week 
  • 20-year fixed-rate mortgages: 2.250%, down from 2.375% last week, -0.125
  • 15-year fixed-rate mortgages: 1.875%, the same as last week 

Rates last updated on January 4, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re trying to find the right rate for your home mortgage, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

The factors behind today’s mortgage rates

Current mortgage and refinance rates are affected by many economic factors, like unemployment numbers and inflation. But your personal financial history will also determine the rates you’re offered.

Larger economic factors

  • Strength of the economy
  • Inflation rates
  • Employment
  • Consumer spending
  • Housing construction and other market conditions
  • Stock and bond markets
  • 10-year Treasury yields
  • Federal Reserve policies

Personal economic factors

  • Credit score
  • Credit history
  • Down payment size
  • Loan-to-value ratio
  • Loan type, size, and term
  • Debt-to-income ratio
  • Location of the property

How to get your lowest mortgage rate

If you want low mortgage rates, improving your credit score and paying down any other debt could secure you a lower rate. The size of your down payments also affects mortgage rates, with a low down payment likely to yield you a higher rate.

It’s also a good idea to compare rates from different lenders to find the best rate for your financial goals. According to research from Freddie Mac, borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote — and an average of $3,000 by comparing five rate quotes.

Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Use Credible’s online tools and get prequalified today.

Mortgage interest rates by loan type

Whether you’re a first-time homebuyer shopping for a 30- or 15-year mortgage, or you’re looking to refinance an existing home, Credible can help you find the right mortgage for your financial goals.

Be sure to check out these loan rates, which you’ll be able to compare by annual percentage rate (APR) as well as interest rate:

More resources on getting a home loan

Want to learn more about how to get a mortgage? Take a look at the following articles:


Guide to FHA Mortgage Insurance

Federal Housing Administration (FHA) mortgage loans have helped millions of people with credit blips, lower incomes or smaller down payments achieve the dream of owning their own home. But while FHA loans can be a great way for some buyers to secure financing on their homes, these loans come with a small catch: you’ll need to pay for FHA mortgage insurance with your loan.

This additional payment includes an upfront sum and an annual payment that is broken up into 12 payments, which are made with your mortgage payment each month. This extra insurance is unique to FHA loans, and it is required of any borrower taking advantage of this type of mortgage loan.

If you’re considering an FHA loan, you need to understand the ins and outs of this type of insurance. Learning how FHA loan mortgage insurance works is essential to understanding how this type of loan works. If you understand FHA loan mortgage insurance, you’ll understand why your premium payments might be a little higher than you thought they’d be with this type of loan.

In this article

What is FHA mortgage insurance? 

Your FHA mortgage is backed by the U.S. government and insured by the Federal Housing Authority, or FHA. The federal government isn’t the lender, though. There are FHA-approved lenders that do the actual work of extending the loan, but they are required by the government to include two charges in addition to the usual legal fees and other closing costs. Both of these charges pay for mortgage insurance.

These charges include:

  • An upfront premium of 1.75% of the loan amount, payable at closing
  • A monthly premium that varies from 0.45% and 1.05% of the loan amount, depending on how much the loan is, how much your down payment was and how long the loan is financed for

Both of these charges are mandatory with this type of loan. If you take out a conventional, non-FHA mortgage, you generally won’t have to pay mortgage insurance unless your down payment is less than 20%.

But with FHA mortgage insurance, your monthly payments for mortgage insurance will continue for the life of the loan. The only way to get around this is to put down 10% or more at closing. In that case, the extra insurance premiums will end after you’ve been paying off the loan for 11 years.

Mortgage insurance doesn’t protect you in any way. It only protects the lender in case you default. This ensures that lenders are willing to work with buyers who don’t meet the income or credit conventional loan requirements. It also makes it possible for buyers with smaller down payments to purchase a home.

Pros of FHA mortgage insurance 

There are several advantages to FHA loan mortgage insurance. These include:

  • There are no payment fluctuations. The amounts are set in stone and won’t fluctuate due to market changes or other factors. Your monthly payments will stay the same throughout the life of the loan.
  • These loans are easier to qualify for. An FHA mortgage is easier to qualify for than a conventional mortgage. Regular mortgages generally require a credit rating of 620 or more, while you may be able to get an FHA mortgage with a credit score as low as 500.
  • Low credit scores are acceptable. You can qualify for an FHA loan with a down payment as low as 3.5%, even with a credit score as low as 580. If your credit rating is in the low 500s, you’ll be able to score that loan with a 10% down payment.
  • Bankruptcy and foreclosure isn’t a deal-breaker. FHA mortgage loans are still available to those who are unlikely to qualify for a conventional mortgage, such as people who have a bankruptcy or foreclosure in their recent past.
  • You have multiple property options. With the new federal guidelines put in place in 2019, you can now use your FHA mortgage for not only a house purchase, but also to buy a condominium unit.

Cons of FHA mortgage insurance 

There are also some drawbacks to FHA mortgage insurance. These include:

  • It’s required. No matter what your down payment is, you’ll be required to pay mortgage insurance premiums. With a conventional mortgage, a down payment of more than 20% of the value of the loan eliminates this requirement. And, once you have built up 20% equity in your home, that insurance can be cancelled. With FHA loans, you’ll pay the insurance premiums either for 11 years (if you put down more than 10%), or for the life of the loan.
  • There are property limitations. You can’t use an FHA loan to purchase a “fixer upper.” If you enjoy working on your home and wish to buy one that needs extensive structural renovations, you may not qualify for an FHA loan. The government requires homes that they finance to be structurally sound.
  • It can last for the life of the loan. If you put down less than 10% at closing, you are stuck with your FHA mortgage insurance for the life of the loan. The only way to get rid of it is to refinance to a conventional mortgage.
  • No second homes or investment properties are allowed. Your FHA loan can only be used for your primary residence; the FHA will not loan you the money for a second home or investment property.

How much is FHA mortgage insurance? 

As noted, there are two charges associated with your FHA mortgage insurance: an amount that is due at closing, but which can be rolled into the monthly payments, and a monthly payment that is added to your regular mortgage charges each month.

The first charge is a one-time fee of 1.75% of the amount financed. For every $100,000 that you are financing, this fee will be $1,750. So if you are buying a $350,000 home, you will pay $6,125. If you have the cash available, you can pay this at the closing. If not, it will be rolled into your premium payments. Note that this is not an annual fee — you only need to pay it once.

The second charge varies between 0.45% and 1.05%, depending on the length of the loan, the amount you put down and other factors. For that $350,000 loan, you would pay an annual charge of between $1,575 and $3,675, divided into 12 monthly payments. That would add between $131.25 and $306.25 to your payment each month.

Should you get FHA mortgage insurance?

FHA mortgage insurance isn’t optional. If you apply for and receive an FHA mortgage, you will have to pay for the mortgage insurance for at least 11 years. That may seem like a long time, but it’s the FHA’s way of ensuring that they are protected in case you should default on your loan. Since FHA loans are often used by those with poor credit, it only stands to reason that they would want this protection.

So is there any way to get rid of it? Your first option would have been to make a down payment of 10% or more. In that case, you will be free of the insurance payments after 11 years. If you put down less than 10%, there is unfortunately no way to eliminate the insurance payments for the life of the loan.

You could also opt to refinance. Many homeowners who take out an FHA loan and then find that their financial circumstances have improved will get rid of the extra insurance premium by refinancing their loan. That means switching from an FHA loan to a conventional loan, and making a large enough down payment that you do not have to pay private mortgage insurance (PMI).


How Your Credit Score Impacts Your Financial Future

Improving your Financial FutureYour credit score is a numerical reflection of your credit history. The score is given as a 3-digit number between 300 to 850 and is an indication of how creditworthy you are. You can get both your credit report and credit score from Annual Credit Report.Com.

Generally, a higher credit score increases your credibility to lenders and opens you up to better terms of credit. On the other hand, the lower your credit score, the riskier you appear as a borrower.

More specifically, your credit score impacts your financial future in several ways:

1.  Your Credit Score Influences Eligibility for Employment

When employers are vetting prospective employees, a large percentage also run a background check which may include credit checks. Notably, they cannot access your credit score but they can access your credit reports.

Credit reports give details of your borrowing and payment history, which can give a hint of how well you fair in your credit score. Some employers may take this as a reflection of how well you can handle money, your decision-making ability, and your potential to be involved in criminal activity.

Note: According to the Fair Credit Reporting Act, prospective employers are obligated to inform you in writing if a credit check is a requirement in the hiring process and seek your written consent on the same.

2.  Your Credit Score Determines your Qualification for a Loan

Whether you require a private, auto, or business loan, a good credit score is paramount. It is the biggest factor in determining whether your loan gets approved, the amount that you receive, and the interest rates of the loan.

Typically, for SBA and term loans, you will need a minimum credit score of 680. Still, business loan providers consider a score of between 640 and 700 as good. For an auto loan, you will require a minimum score of 660.

While it is still possible to get loans with a low credit score, your choices will be limited. Further, the few lenders who are willing to work with you will charge higher rates, significantly raising your monthly payments.

3.  Your Score Affects Your Ability to Buy or Rent a House

Just like the case with other lenders, mortgage companies depend on your credit record to determine your eligibility for a mortgage. A good score, such as 760 and above, reflects your ability to honor your payments.

On the other hand, you might not strike a deal with many lenders if your score is 640 and below. If you do, they will impose high-interest rates to cover the risk of delayed payments or defaulting.

When you are looking to rent a house, it is common for some landlords to run credit checks. By so doing, they can only get your credit report and not your credit score. That said, there’s no minimum credit score to qualify you to rent.

However, a landlord may use your payment habits and your current debt to decide if they should approve you to rent or not.

 5. Your Credit Score Determines Whether you Get Mortgage Refinancing or Not

Are you looking to lower the interest rate on your current mortgage? You can do that by refinancing. This can also help you get a shorter loan term, reduce your monthly payments, or switch to a fixed-rate mortgage.

To refinance your mortgage, the credit requirements may vary from one lender to another. Nevertheless, you will need a credit score of 620 and over for a conventional mortgage refinance. If you are lucky, you can get refinancing from government programs with a score of 580.

By contrast, if you want to try your luck with private lenders, you may need a credit score of up to 750. In any case, higher credit scores translate to higher chances of loan refinancing approval, better loan terms, and lower interest rates.

Besides your score, you will also need a minimum of 20% property equity and funds to cater for other costs related to refinancing.

The Bottom Line

Many aspects of your financial future are pegged on how you have handled your financial responsibilities in the past. Your credit score is a good indicator of this information. With good credit, you can live more comfortably, access financing when you need it, and avoid extra expenses brought about by a low score.