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Effect of Credit Report on Mortgage and Car Loan |
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The wave of credit reports is flowing like a heavy tide across the United States. Of late, Americans are more concerned about their credit report, especially with mortgages and car loans. If you want to buy a new house or car, you must be aware
of your credit score, otherwise, your dreams won't come true. Before asking for a mortgage or car loan, this concept should be crystal clear. The mortgage amount is the amount of money you borrow from a mortgage lender to pay for your house. The term is the number of years over which you can pay back the amount you borrow. At the same time, never forget to have a look at your credit report regularly. The length of your mortgage repayment period will directly affect your monthly mortgage payments. For the same mortgage principal amount, you will find that the shorter your repayment period is, the higher your monthly payments will be, but the total interest you pay over the life of the loan will be less. On the other hand, the longer your repayment period is, the lower your monthly payments will be, but the total interest you pay over the life of the loan will be more. The most popular mortgage term is 30 years. By extending payment over 30 years, you keep your monthly housing costs low. If you can afford higher monthly payments, you can select a mortgage term that is shorter: there are 20-year, 15-year, and even 10-year fixed-rate mortgages available from most mortgage lenders. But you can see your mortgage credit report anytime you wish. Another most sought after loan is the car loan. There is hardly any person, who does not long for a car, be it Jaguar, Audi, BMW or the high end Maybach. But everyone can't buy a car in one single payment. Thus, car loan comes in to play its role. A car loan credit report can help you determine how much you can really spend on a new vehicle. As everyone knows buying a car is a major purchase, so it is wise to start with a carefully planned budget to help you determine how much you can afford. Your credit score is the single most important factor in determining whether you will get approved for a car loan, and what the APR (annual percentage rates) of the loan will be. Keeping your credit score high should be an ongoing process. If you attempt to clean up your score just before applying for the loan, banks may reject you because you have disputed an item on your credit report, until it resolves in 30 days. As it can take up to 60 days to clean up your credit score, don't apply for new credit until all disputes are resolved and you verify the score. If your credit score is high, you can get a good APR on your loan. If your credit score is low, you will pay much higher APR on your loan. Below certain levels, it's nearly impossible to get a car loan. That is why many loan professionals recommend getting a copy of your credit report before you start the car loan application process. A thorough study of your credit report will bring to your notice if there are any inaccuracies, which can adversely affect the interest rate you get on your car loan. This can save you THOUSANDS! |
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