How your Credit Scores Determine the Best Interest Rates in Nashville

June 9, 2009 · Print This Article

I am sure we all know that your credit score determines if you qualify for the best interest rates available for your new home mortgage in Nashville (or anywhere throughout Tennessee). We hear all of the chatter about having a good credit score. In some ways, the current economic crisis is due to a large part from people not paying a closer attention to this score (we will talk more about this in a later article)…………..Onward with my point, a customer found me recently. Probably the same way you did, on a search engine. They were first time homebuyers and had just placed an offer on a home. After an initial application, I felt it safe to say that they should qualified financially for the home. They didn’t have any outstanding debt. The only problem was his credit score. It was around 641. Not a great score but I can work with it. After explaining to them what they qualified for, they were upset that they didn’t qualify for the best interest rates that they “heard” were out there. I explained to them that since they were not putting a 20% down payment and that his credit score was 641, this is what he qualified for. Becasue of the score, his rate was .25% higher than someone with a 710 score and with a 20% down payment. After spending an hour to get them to understand (and taking a verbal abuse from the Misses!) I politely told them that they should secure financing elsewhere. They did! A few days passed and I received a call back from them. They found another lender but they were charging them a higher rate! They wanted to know if they could come back to me. Should I take them back?

How does your score effect your rate?

Mortgage products from lenders for the most part are the same. Every lender has to conform to a certain set of guidelines. One on the main guideline is your credit score in relation to risk. The more risk a lender has to take, the more they are going to charge you for the money, plain and simple. That is true in any lending environment. Automobile loans, credit cards, & yes home loans. Take a look at some of the things that could affect your rate:

1.Your Down Payment
2. Your Total Household Debt
3. Refinancing To Take Out Equity Of The House
4. Your Credit Score

Nashville, no matter what your financial situation is or credit score, finding the best home loan with the lowest possible interest rate can save you thousands of dollars over time. Regardless of your credit situation, bad credit (to read more about a bad credit loan:
Nashville loans: What can you do if you have bad credit and are looking for a home loan) or good credit, there are programs that we can tailor to your specific needs and offer you an interest rate and payments to fit your budget.

A pre-qualification is a must in searching for and making an offer on a new home. By knowing what you qualify for, you can have an idea of what your mortgage payment will be. You will be a little more prepared. To get started, fill out a pre-qualification worksheet. We will know in hours what you qualify for. I look forward to hearing from you.

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