Making the decision to buy real estate in Scottsdale is a big step. Entering the realm of home ownership means taking on a mortgage that you can comfortably afford while getting the most house for your money. But are you aware that your credit score plays a major role in how much money you put towards principal on your new home?
When buying a home, your current financial situation and your financial history are carefully looked at by mortgage companies when considering your loan application. Things like your income and your credit record are carefully examined and help to determine the interest rate you will qualify for when taking out a mortgage. When it comes to your credit rating, the lower your score, the more in interest you pay. This could potentially leave you with less wiggle room to purchase a home and be comfortable with the payments. You may think you’ve found the right piece of real estate in Scottsdale for your needs, but if your credit is poor, that home could end up being out of reach.
The reason why lenders charge higher interest to people with poor credit comes down to trust. The lender is trusting you to repay the loan for your coveted piece of real estate in Scottsdale. When you fail to maintain your debt repayment on your credit card, for example, you are demonstrating that you’re not as good of a customer as you think you should be. The lender expects to be repaid and is going to charge a higher rate of interest to ensure that they are going to recoup the money. They may also tack on extra for the risk they are taking by giving you a mortgage.
At Shield Property, we want to help you buy the house of your dreams at a price point that makes sense for you. Having a good credit score enables us to find a wide range of properties in Scottsdale for you to choose from. We can also give you guidance on what you need to do if your credit rating is less than ideal.
For more information, contact us at Shield Property today.