Why Maintaining A Good Credit Score Matters

Your credit history is important in different spheres of your life but more so when you want to apply for a home loan. Mortgage loans are generally large compared to car loans or student loans and are also not so easy to procure.

You as a borrower need to prove that you are in the pink of financial health. A good credit score does that. It broadens your financial options as well as gives you the negotiating strength to get a larger loan at a better rate. We at Home Loan Comparison Co. have seen that the benefits of a good score are seen in:

  • Improving the probability of getting a loan approval – an important milestone.
  • More favourable or lower interest rate.
  • A bigger loan than would be possible otherwise.

What Makes The Loan Process Simple?

Do not be under the illusion that your good credit score alone will open the doors of lenders for you. But significant weightage is given to this factor in a loan approval decision. It is a confidence booster in getting approval. A poor or even a fair credit rating is likely to result in your loan being rejected. It is in your interest to maintain a consistent credit.

Trying For Lower Interest Rates?

Your credit score is an important starting point to strike a good mortgage loan deal as it directly influences the interest rate you get. But there are other financial parameters that include:

  • Your debt-to-income ratio.
  • The down payment amount you place on the table.

If all of these factors are favourable, you will be pocketing a better (lower) interest rate that is advantageous.  This can you save more money throughout the life of the loan and canbe used to pay off more of the principal loan amount.Your mortgage will be repaid in fewer years than expected, lifting a stressful financial burden of your monthly commitment.

Can Get A Larger Loan

The loan amount you are eligible for depends on your income and credit score. Lenders are interested in safe loan applicants who can make monthly payments on the due date without any hassle. They will be interested in giving larger loans provided your credit score is promising and your income flow is consistent and high. It is beneficial for you to maintain a good credit score if you are planning to go in for a mortgage loan. You can find information related to different loans on Home Loan Comparison.

If you want to know more, don’t hesitate to contact us! We’re called Home Loan Comparison Co and we’re licensed Mortgage Brokers in Melbourne. We’re here to help you on your path to acquiring the home of your dreams.