Tuesday, January 20, 2009

Keep That Credit Score Above 700!

Want to know how to save as much as 1% on a home mortgage?

I thought you might. Read on.

A lot of people today do not realize how much a good credit rating relates to buying a home in this day and age. With a credit rating of 700 or above you can save as much as 1% on a home mortgage. Doesn't sound like a lot? Well......

Let's do some math. You find a place that fits your needs and after putting some money down you'll need to get a loan for $100,000.

You have a credit score above 700 and you get an interest rate of 5%. Here's what your payments will look like:

30 year mortgage @5%

P&I (Principal & interest) = $536.82

Interest over the life of the loan = $93,256.49

If your credit score is lower than 700 and you get an interest rate of 6%.

30 year mortgage @6%

P&I = $599.55

Interest = $115,838.42

So over a 30 year time period you would have saved $22,581.93

Your FICO (credit) score is of great importance in saving you money and a low one can even keep you from getting a loan. Check one of my previous posts for more information on credit scores. If you have more questions let me know. You can leave a comment here, email me (trfinch@gmail.com) or give me a call 937-423-3316.

1 comment:

Anonymous said...

I just went in for a refinancing meeting at GNB, and I was happy my credit score came out where it did.

Definitely put me in a good position to refinance, but with the decrease in home values, the worry is that my house will be re-appraised at a value less than what I currently owe.

The blog looks great, by the way. Hopefully this helps you communicate with your clients effectively. It's a nice touch.