Before you consider a mortgage or refinancing there is one crucial step you need to take: checking out your credit score. Making this your first step will end up saving you time, and potentially some money as well. This is because your credit score will determine whether or not you are eligible at this time for refinancing, and at what interest rate.
It may even help you decide between different banks or lending institutions, and help you negotiate a lower interest rate. This is because your credit score is used by lenders as a gauge for how big of a financial risk you are.
A high credit rating will tell a lender many good things about you: you are responsible and pay your bills on time, you have a long credit and banking history, you don't take on more debt than you can pay off and you don't max out your credit cards. In essence: you make sound financial decisions - just what every lender hopes for.
A low credit rating, on the other hand, paints a shakier picture for lenders. Maybe you'll make your payments on time and maybe you won't. Maybe they'll see their money again, and maybe they won't. If this is the case, a lender is going to want to protect themselves against loss, and that means giving you a higher interest rate. This would be counterproductive to any plan you have of refinancing.
Whether you decide to refinance in order to lower your interest rate, consolidate your bills, free up cash from your home equity line of credit, or switch mortgage types, the best move you can make is to check your credit score before anything else.
Instantly see how your mortgage credit score compares to the average.