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How Can I Calculate an Interest Rate Based on My Credit Score?

How Can I Calculate an Interest Rate Based on My Credit Score?

Many prospective homeowners don’t realize the direct impact their credit score will have on potential mortgage rates.

Credit Score and Interest Rate

Your mortgage rate is based on credit history. When you walk in and apply for a loan, lenders are trying to determine the risk factor of their investment. They do this through a process of reviewing your credit history – everything from outstanding debts to current income to credit scores. All these pieces combined will give them an idea of your credibility as a borrower. But how can you know what the verdict will be?

Higher Score, Lower Rate

A simple way to predict your interest rate is to figure that the higher your credit score, the lower your interest rate will likely be. However, there isn’t any set scale that can guarantee the exact interest rate you will qualify for. Lenders will also be looking into other dimensions of your credit history and these will influence your mortgage rate.

Set Yourself Up For Success

Don’t apply for a loan before you are ready. Timing is everything in life, and this is especially true for mortgage loans. If you know your credit score isn’t very strong it might be prudent to take the necessary steps and breathe new life into that number. If it qualifies you for a better mortgage rate, you could save big in the long run.

If you are ready to move forward with a loan application, it is time to work with the experts at Midland Mortgage. Let us walk you through the process to ensure you have a positive experience and get the best rates available. Click here to get more information about mortgage rates before you proceed with a loan application.

Posted Aug 05, 2015 by Midland Mortgage Corporation