How many times have you heard this one recently: “Interest rates are at an all-time low.” It seems every commercial peddling a mortgage or refinance program lives by that mantra.
Well, it’s true: Due to continuing economic uncertainty, interest rates remain remarkably low, making now a great time to either buy a home or refinance your current home. If you are refinancing to lower your home payment because you are struggling to pay in full on time each month, you will absolutely want to refinance before you ever miss a payment.
The New York Times published an eye-opening article on mortgages and credit scores. Just missing one mortgage payment by 30 days can mean a serious hit to your credit score – but that’s not the only thing. Loan modifications, short sales, foreclosures and a series of missed payments can all drag down your score, making it harder to refinance or attain a lower interest rate.
The article reveals a FICO study, showing the effect of late mortgage payments on credit scores for people with a spotless record (780), slightly tarnished record (720) or average record (680):
780 720 680 Payment 30 Days Late 670-690 630-650 600-620 Payment 90 Days Late 650-670 610-630 600-620 Short Sale, No Balance Owed 655-675 605-625 610-630 Short Sale, Deficiency Balance Owed 620-640 570-590 575-595
Before you apply for refinancing, make sure you know where you stand by checking your three credit scores at . As the industry leader in credit management and protection services, FreeScore offers the Power of 3: three credit scores, 24/7 credit monitoring and three-bureau credit alerts. You’ll know your scores, rest assured that your credit is being monitored for fraud and errors, and be alerted any time there is a critical change in your credit information.
Have you tried to refinance your home lately? Did you have success?