You could have an extra £78,000 added to your mortgage if you fail to do THIS
We can't believe this figure!
Taking out a mortgage is one of the biggest financial commitments we can make during our lifetimes. And for many would-be homeowners keeping the cost of this monthly payment down is a key priority.
More mortgage news: If you have a mortgage with Tesco Bank then you need to read this
But now research from TotallyMoney and Moneycomms has revealed that a poor credit score could see this repayment leap in cost by tens of thousands of pounds.
They estimate that in the first five years a £207,000 90 per cent loan-to-value (LTV) mortgage could cost buyers an additional £14,857, while this cost jumps to £78,500 extra over a 25-year term.
Additional figures from the analysis also showed that a poor credit score also had a knock-on effect on other areas of lending that could be factored into a household budget. This includes personal loans; here a £7,500 loan taken over four years could cost an additional £7,453. And when it comes to credit cards, paying a £3,000 credit card bill over a period of two years could cost £1,979 more in interest.
Commenting, Alastair Douglas, CEO of credit experts TotallyMoney, said: 'The extra fees people pay for having a bad credit score are huge. Taking the time to check their report means they can understand why this might be happening.
'Lenders review a customer’s credit report when they apply for a product. With a bad score, they’re more likely to charge a higher APR, offer less interest-free months, or even reject an application.
Get the Ideal Home Newsletter
Sign up to our newsletter for style and decor inspiration, house makeovers, project advice and more.
'Being informed about their score can help people to see where to improve and how to get the best deals. A report shows customers up to six years of credit history, and how much credit they are currently using.'
Before adding: 'At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking a report is the first step of this process and can help people to understand their score. With this, they can get better rates and more choice — helping them work towards a better financial future.'
Have you given your credit score a recent health check?
-
5 signs you’ve taken decluttering too far — and how you can pull yourself back, according to organisation experts
You might have to start resisting the urge to purge
By Lauren Bradbury
-
What is the Party Wall Act 3m rule and is it something you should be worried about? This is what the experts say
Don't get caught off-guard by the Party Wall Act 3m rule — our expert guide is a must-read
By Natasha Brinsmead
-
Shoppers can’t get enough of The Range’s lemon tree, but I’ve found an even cheaper bestseller at B&Q - it’s perfect for a Mediterranean look
Welcome the summer with this glorious fruit tree
By Kezia Reynolds