InvestigateTV – Buying a home is the biggest investment many people will make in their lifetime. Getting the best interest rate on a home loan will save you thousands of dollars over the life of the loan.
There have been three interest rate increases this year, which has increased costs for buyers paying with a mortgage. A high credit rating facilitates access to low interest rates.
One way to maintain your credit score is to refrain from opening new lines of credit.
Cherry Dale, a money coach at Virginia Credit Union, said every time you apply for credit, your credit score is hit, especially if you’re looking to buy a big-ticket item, like a car.
“In 2022, if you’re preparing to get a mortgage this year, you don’t want to open new credit for at least six months before that,” Dale said. “You ask for that mortgage you want to keep clean.”
Dale said if you open new accounts within six months of buying your home, the number of inquiries or requests you make factor into your score. If the number drops, it could increase the interest rate on your mortgage.
Rocket Mortgage shows that a 1% increase in your mortgage rate could cost you hundreds of extra dollars per month.
Dale suggested that you also pay your bills on time in the six months leading up to the purchase. Every action you take can improve your creditworthiness and save you money.
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