As an Arizona mortgage broker, I am often asked a number of questions that would-be home buyers are confused about when it comes to approval and the affordability of a home loan. I am always open to answer questions from potential homebuyers, and while some of their questions tend to revolve around points, fees, and percentages, many people don’t realize what they can do to prepare for the opportunity to buy a home.

Any mortgage lender in Arizona, or even throughout the United States, will tell you that your credit score is a major factor in determining how much your mortgage will cost you over its lifetime. It can even cause you to be denied, as is the case with numerous potential clients since the real estate market sank in 2008. As a dedicated Arizona mortgage broker, let me inform you of some of the basics about how your credit score affects your mortgage.

The Various Credit Scores

Most consumers are familiar with the main three credit reporting agencies. Experian, TransUnion, and Equifax. Each of these agencies has their own algorithms that they use to determine credit scores. There is certainly more than one way to determine what your score may be. And while you can get a free report from these agencies once a year, that doesn’t mean that what you see is the same as what a bank sees.

There is a variance of between 19% and 24% that could alter your score from a lender as opposed to what your credit score rating with those agencies may be. In other words, while you may earn a grade of ‘A’, for example, on your credit score, a lender might see your score as a ‘B.’ A small percentage of mortgage applicants would receive a mark of two full grades lower than the agencies report them.

The difference could be half a percentage point or more on the interest rate you earn. This can equal tens of thousands of dollars over the course of a 30 year mortgage. For example, if you sport a top credit rating, you could end up paying $74,000 in interest over the life of the mortgage. However, being knocked down one grade could cost you $6,000 or more during that same time period.

Get Your Credit Score In Advance

As an Arizona mortgage broker, I want my clients to be prepared, to know what they are bringing to the table and understand any potential pitfalls that may arise with their credit score. Make sure that you receive a free copy of your credit score and get all three agencies to report. Review all of the details and if there are any discrepancies, resolve them before applying for a mortgage.

Be prepared with information so that when you apply for your mortgage, you can address any questions in a timely manner. As an Arizona mortgage broker, I believe that the best client is one who is informed, educated, and armed with the right tools to garner the best mortgage possible. Your credit score is vital and it’s important to be prepared and know the details of your score.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

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Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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