Susan and John are preparing to purchase their first home and will need a loan for $200,000.00. Not knowing how important their credit is, they have some late payments on a car loan and a credit card in the past year which have knocked their scores down between 640 and 650. They may still qualify for a home loan, but it will be more expensive – as much as 1.50 -2.00% higher than if they had excellent scores (like 740 – 750). Over the 30 years that most people take out a mortgage, they will pay over $70,000.00 more because of their credit score. Susan and John had saved up a good amount of money for their down payment on the mortgage, but lucky for them they are first time home buyers, and with that comes programs to help buyers get into their first house with little to no money down. When they found out this information, they used some of that money to get caught up on their late payments, helping bring up their credit score and lower their debt.
So, moral of this little story – Take care of your credit today and save money in the future.
Call or stop into one of our branches and talk to a lender if you are ready to start your home purchase journey!
Buffalo Lake 320-833-5325
Hutchinson 320-587-2265
Ortonville 320-839-6123
