Credit repair is a crucial and often overlooked aspect of the mortgage purchase process. While 850NOW is not a credit repair firm, we do have very close relationships with the nation’s top rated credit repair agencies.
Your credit score greatly determines your mortgage interest rate. As shown below, the interest rate can greatly change your monthly mortgage payment – by 30% or more. The higher the interest rate, the longer it takes to reach positive equity in your home. Research also proves that higher rates also reduce their chance of successfully paying off a mortgage.
Today, the PMI payment on a 400k home with a 95% LTV (Loan-to-Value) changes by nearly $400 per month. You will pay PMI on FHA loans for the life of the loan and on Conventional products until your LTV is under 80%. Obviously, the financial impact of a low credit score drastically outweighs the cost of credit repair with the purchase of a home.