Free Money for You

Posted by M.S. on May 2, 2009

Were you aware that your credit score is very important to your financial health?  Did you know that the better your credit score is, the lower the interest rate when you borrow money?

A credit score is simply a number that represents the risk of lending to someone and is primarily based on credit report information, gathered from credit bureaus.

These days, it is common for mobile phone companies, insurance companies, car dealers, landlords, and even employers to run a credit check to see your credit score.  If you pay your bills on time, and pay back money that you have borrowed, lenders see that you are a better risk, so they will give you a lower rate to borrow money.  Employers know that people who don’t pay their bills are generally less reliable workers too.

As the the current economic situation has worsened, the Federal Reserve has made decisions that have lowered mortgage rates- especially for people with excellent credit scores, like us.  The days of anything goes in mortgage lending are over, and now banks only want to deal with people they know will pay back their loans.  As a matter of fact– mortgage lenders WANT to do business with people with great credit!  So, protect your credit rating!

We decided to investigate refinancing a rental property and were stunned to learn we could refinance the loan at an amazingly low rate of 4.99%!  The best part is the payment will stay fixed at that low rate for 30 years, although we plan to pay it off faster than that, while hopefully the rents will increase over time, along with the value of the property.  Same property, same basic loan amount, different payment.

Lowering the rate saved us almost $ 100 a month on the mortgage payment, which we will apply directly to the principal each month.

In essence–that is free money!

Take a look at  How Refinancing Would Give You Free Money