Why CREDIT impacts Your Mortgage Rate

We’re back with another episode of Let’s Answer The Internet: Why Credit impacts Your Mortgage Rate. Ryan Wilkerson, Sales Director with Atlas Premier Realty answers those frequently asked questions during this unprecedented real estate market.

Why CREDIT impacts Your Mortgage Rate

Why does your credit score matter when it comes to the interest rate you receive? Well, the rates that you typically see online when you Google interest rates, or you're trying to get a preliminary quote from someone; they assume you have a 740 or better credit score. Lenders are assuming great credit, lots of income, very little debt, and your credit score dictates what interest rate you actually receive. So if you see a bank advertising five and a half percent, but you have a 610 credit score and very high debt to income ratio, you're not getting five and a half percent. You're probably getting five point 75% or 6%. So it's really important to get your credit leaned up right now because that could be the difference between you getting an interest rate with a five in front of it or an interest rate with a six in front of it. And the difference is huge when it comes to monthly affordability.