Finding the best mortgage rate for you.

If you are new to home ownership and mortgage shopping, you may not know that mortgage rates change frequently. Lenders across the nation post weekday mortgage rates to a comprehensive national survey so that you know what a competitive rate is.

When it comes to being financially responsible, do your homework. When preparing to enter a home loan, one of the most important areas to research are interest rates and how they will affect your loan pricing. Learning what determines your rate will help you choose which lender is offering you the best deal.

As part of the lending agreement, a lender will affix an interest rate to the repayment agreement. This rate will affect how much interest you pay over the life of the loan and will affect your monthly loan payment. Even seemingly small adjustments to the interest rate can translate into thousands of dollars over the loan term.

If you are new to credit accounts, you might not understand their connection with seeking future loans (house, car, etc.) and why excellent credit is so important. Upon entering into a credit relationship with a lender, you assume the responsibility of repaying credit debt in the contractual, monthly installments set up. Late or missed payments result in late fees and negative reports on your credit report history, bringing down your overall credit score. Conversely, if you make your pay-back payments timely, you are rewarded with positive factors that contribute to a higher credit score.

“A credit score tells lenders about your creditworthiness (how likely you are to pay back a loan based on your credit history). It is calculated using the information in your credit reports. FICO® Scores are the standard for credit scores—used by 90% of top lenders,” FICO said.

Credit scores determine your ability to borrow money in the future so they are not to be taken lightly. They are the main tool a lender uses to decide if they feel they can lend you money. Low credit scores or negative reports make you a risky candidate for loans. This can result in loan applications being denied or you being assessed a higher interest rate with your loan and fees.

Negative information on your credit report stays there for 7-10 years, allowing lenders to have a broader range to evaluate your credit history. This may seem unfair if you are a potential borrower suffering from a poor credit history, but it protects lenders from lending money that is never repaid.

While you can’t change past credit mistakes, credit repair requires that you demonstrate good credit management moving forward by making timely payments in the scheduled minimum amount. Efforts towards rebuilding your credit will pay off in the long run, but sometimes you may need a little help from a professional credit counselor along the way to help with credit repair.