While the housing market has certainly seen better days, one of the bright spots for homeowners is that interest rates are at all-time lows. This makes now the perfect time to refinance your home, provided your credit scores are in good shape. A recent post on the FreeScore blog illustrates just how important it is to know your credit scores before you apply for a mortgage.
In “A High Score Equals a Low Rate, So Refinance Before It’s Too Late,” the financial experts at FreeScore explain how credit scores can drastically affect the rate you receive when refinancing your home. This is especially important for homeowners who are trying to lower their monthly house payments. In fact, missing one payment by just 30 days can lead to unpleasant consequences.
A New York Times article that examines a FICO study shows the correlation between late mortgage payments and credit scores for people with a spotless record (780), slightly tarnished record (720) or average record (680):
|Payment 30 Days Late||670-690||630-650||600-620|
|Payment 90 Days Late||650-670||610-630||600-620|
|Short Sale, No Balance Owed||655-675||605-625||610-630|
|Short Sale, Deficiency Balance Owed||620-640||570-590||575-595|
As you can see, knowing your three credit scores before applying for refinancing is vital to receiving a lower interest rate. If you want to check your scores and stay informed of changes to your credit information, visit FreeScore.com. As the industry leader in credit management and protection services, FreeScore offers the Power of 3: three credit scores, 24/7 credit monitoring and 3-bureau credit alerts. With these and many other exclusive FreeScore benefits, you’ll be empowered to stay on top of your credit and negotiate the lowest possible interest rate.