There are some things in life that are fluffed up to be important but soon turn out to be insignificant as life goes on, like what group of friends you were a part of in high school or your pre-calculus grade. Your mortgage credit score is not one of these things. You will need it, possibly more than once, and your lender definitely cares about it.
On one hand, your lender wants your mortgage credit score to be high, preferably at 720 but even higher if you can manage it. A high score tells the lender that you are responsible. You pay your bills in time and are not likely to default. This saves the lender the potential costs associated with foreclosure as well as the time and effort that come along with it. The lender is more likely to trust you, and therefore, approve you. You’ll get the loan for the house you want, and you’ll be rewarded for your good credit with a low interest rate.
On the other side, if your score is too low, your lender may not even bother taking the risk of approving you, and if they do, you’ll suffer with an excruciatingly high interest rate. This puts you at a high risk of foreclosure because your payments will be expensive and you may eventually be unable to keep up. You’ll lose your home, and your lender will lose money on their investment Mortgage Broker.
If your mortgage credit score is somewhere in the middle where you’ll end up with an average-but-not-great interest rate, don’t count on your lender to suggest that you raise your score and come back when it’s higher. If your score reflects a decent level of trustworthiness, your lender will be happy to approve you and charge you a higher interest rate than they would someone with a better score. It means a sale and more money for them.
Check your mortgage credit score often, and take action as soon as possible to improve it before you start the application process for a new home. Don’t even let your lender have a chance to see your score before you’re ready. You want to be in as much control as possible. Keep your score high by paying your bills on time and keeping your credit balances low to ensure that you don’t pay any more in interest than you really have to.