How does my credit score affect my ability to get a mortgage?

@kay.wiza 

Your credit score plays a significant role in determining your ability to get a mortgage. Lenders use your credit score to assess your creditworthiness and determine the terms of the mortgage, including interest rates and loan amounts. Here are a few ways your credit score can affect your ability to secure a mortgage:

1. Loan Approval: A high credit score indicates a lower credit risk, making you more likely to be approved for a mortgage. Lenders prefer borrowers with good credit scores as they are seen as less likely to default on the loan.
2. Interest Rates: Your credit score often influences the interest rate you'll be offered on the mortgage. A higher credit score generally results in lower interest rates, potentially saving you thousands of dollars over the life of the loan. Conversely, a lower credit score could lead to higher interest rates, making the mortgage more costly.
3. Loan Amount: Lenders consider your credit score when determining the maximum loan amount they are willing to extend to you. A higher credit score may qualify you for a larger loan, while a lower score may limit the amount you can borrow.
4. Down Payment Requirements: With a lower credit score, lenders may impose higher down payment requirements to mitigate potential risk. Conversely, a higher credit score may allow you to qualify for a mortgage with a lower down payment.
5. Approval Process: During the mortgage approval process, lenders scrutinize your credit history to assess your payment history, outstanding debts, and overall financial health. A poor credit score might raise concerns about your ability to manage debt, resulting in a more rigorous approval process or even denial of the mortgage application.

It's crucial to work on improving your credit score before applying for a mortgage. This involves timely bill payments, reducing debt, avoiding new credit inquiries, and regularly monitoring your credit report for errors or discrepancies.