Live: Mortgage Rates and Housing Prices to Remain High
According to Zillow, the 30-year fixed rate mortgage is at about 6.57%.
What does that mean? It means that borrowing money to buy a house is relatively expensive right now. And it’s unlikely to get cheaper in the near future.
So What?
While borrowing money to buy a house may not be front of mind for you right now, the implications of high borrowing costs for a car, business, or your eventual oceanfront estate should matter to you right now.
^Your eventual house^
There are ways to make loans cheaper, today! With credit…
Learn: How Credit Makes Life Cheaper
Your credit history and score are what lenders (like banks) will use to evaluate whether you’re a scrub. Or, how risky you are to lend money to.
The higher the credit score you have, the lower the rates you will get on your loans. And the lower rates you get on your loans, the less you will have to spend on interest over time. So higher score = less money spent.
For example, say you’re buying a new Ferrari that costs $30,000 (for the affordable Ferrari’s out there).
If you have an excellent credit score (781-850), you’ll probably pay around $4,900 on interest on top of the cost of the car.
But if your credit rating is less strong (601-660), you’ll pay about $9,700 in interest, on the same car.
So your credit score determines how much more you will be paying for the same Ferrari. And it can be a lot!
The easiest way to start building a high credit score today is to get a credit card and use it responsibly:
Spend less than 30% of your credit limit.
Pay off your statement balance in full every month before the payment due date.
If you stay on top of those two things, you will start building credit history that will pay you back big time when you get a loan. Also, you can get free stuff with the cash back you accumulate on your card 👍.
Launch!
Don’t be a scrub, get a credit card. And use it responsibly!
And if you already have a credit card, look into getting a nicer one. The more cards you have, the better it is for your credit score.
A great card for people just getting started is the Discover Student Card, and for those looking at their second card there is the Chase Freedom Unlimited.
If you need help finding the perfect card for you, or have questions about how to apply or use it safely, respond to this email. I’d be happy to help you out!
Gif by oceanpark on Giphy
Credit cards are a great way to make loans cheaper, and get money back when you spend (which we could all use).
So take care of future you, and apply for one ASAP ;).
—Ben Brosnahan
