Yesterday we took a look at how your credit score can affect whether or not you qualify for a home mortgage. Today we’ll look at how your credit score affects your home loan interest rate.

After you qualify for a home mortgage, you then have to find out what sort interest rate the lender will offer you. The first step is seeing whether or not you qualify, and, if you do, the next is determining whether you are higher risk and have to help the lender offset that risk. This is where the home loan interest rate comes in. The lower your credit score, the higher your home loan interest rate. A low credit score indicates higher risk, and so the lender will in essence charge you more money to make the loan.

A lower credit score can mean thousands (and even tens of thousands) of dollars paid in interest charges. A better credit score will help you wil a lower interest rate, and it will mean that you will pay less over the life of your home mortgage.

Tags: home mortgage, home loan, qualify home mortgage, home loan interest rate,credit score