Home » Finance

New Home Mortgage : How Credit Score Can Affect Your Lending Cost

Sep 2, 2008
New Home Mortgage is obtainable whether you have a high or low credit score. However, low credit score can cause interest rates to become higher thus also making monthly installments higher and more difficult to manage your lending.

Credit score is a major factor when trying to obtain a home mortgage. And you will know if there is indeed a problem is when you present your score and a prospective lender isn't giving you any further financial attention. However nowadays loan requiring only good credit history is a thing of the past. Even people with low credit score will be able to find a home loan that they can use to purchase their own home. However, new home mortgage using bad credit will be costing you more because of higher interest rates. So, technically, it is more advantageous to apply for a home mortgage if you can present a good credit score.

Select the right lender

If you have a low credit score, it is likely that you will not be able to acquire a home mortgage with the lender of your choice. And it can be quite difficult to change to a new lender as you have to make documentation of your second mortgage try just like you first time. This extra effort and time spent on documentation for the lender is one of the most taxing parts of applying for new home loan.

Duration of Loan

The time that you will spend in order to finish the repayment of the new mortgage loan is definitely affected by the credit report. This aspect is perhaps less significant than the other factors, however it is still important enough to be taken into financial consideration. The most obvious impact is when a low credit report leads to a higher interest rate. With such high rate, payments will certainly be exorbitant for the borrower especially of shorter payment term is chosen. And so, the borrower has to switch to a longer term in order to make payment more manageable, which on the other hand will make the borrower pay more in interests.

Loan rate

As earlier mentioned, credit score of the borrower has a great impact on new home mortgage loan. As a rule, the lower the credit score, the higher will be the loan's interest rate. And if the credit rating is very low, the borrower unfortunately might not get a normal home mortgage. It is without saying that better loan rates and terms are offered to borrower if he has good credit scores.

Type of loan

Another factor concerning new home mortgage loan that is affected by your credit score is the type of loan available for borrowers. The major types of loan available include:

1. Fixed rate mortgage
2. Adjustable rate mortgage
3. Balloon payment mortgages

Bear in mind that some unscrupulous lenders will entice or even coerce the borrower to get an adjustable rate mortgage so that when interest rates increase, such increase will be the responsibility of the borrower and not the lender. Borrowers must likewise avoid drawing a loan that might result in the negative equity on the home property and this will financially impact you greatly.
About the Author
If you are looking for a New Home Mortgage or for information about almost any type of mortgage loan, the best location to find it is at http://www.homemortgageloan-refinance.com for all your financial information.
Please Rate:
(Average: Not rated)
Views: 180
Print Email Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources