During this holiday season, and every other holiday this year. Retailers continually bombard you with the at-the-register offers to “open a charge card and save 10% to 15%”.
Hey, it is a great immediate money-saver, but for many Americans in the market for a new home, but by taking this in-store savings ploy could make them a long-term loser.
Why?!?!?
It is because new credit applications are damaging to credit scores. myFICO.com says that, “new credit” accounts for 10 percent of a credit score; recent applications may signal weakness in a borrower’s profile.
Meanwhile, mortgage lenders will make a rate adjustments for lower credit scoring applicants. An example of this, a home buyer with a 20% downpayment and a 720 plus credit score would face an interest rate adjustment of 0.125% and it could be up to .250% on an Indiana FHA Home Loan.
To keep reading this blog, head on over to the Mad Mortgage Machine blog. It will open in a new window and it is full of new ideas
Dave Woodson
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