The interest rate you receive on a
home loan is directly tied to your credit history. The
better you are at paying your bills, the lower the interest
rate you will receive. If you have late payments, have
been sent to collections, filed for bankruptcy, or defaulted
on a loan, your interest rate will be substantially higher.
Take a look at the example below for how much more you
will pay on a $300,000 mortgage, if you are not financially
responsible:
Credit
Rating
APR
Monthly
Payment
Total
Home Cost With Interest
Good (FICO 720+)
6.00%
$1798.00
$647,514
Bad (FICO <600)
9.00%
$2414.00
$868,992
If you have bad credit, you
will pay over $220,000 more over 30 years than you would
if you have good credit!
