What is the impact of a borrower's credit score on mortgage loans?

A higher credit score can indeed lead to better loan terms and lower interest rates because lenders view borrowers with higher credit scores as less risky. A strong credit score demonstrates a history of responsible credit management, including timely payments and a good mix of credit types. Given this history, lenders are more inclined to offer favorable terms to these borrowers, which can include lower interest rates and reduced fees.

Better loan terms result in significant long-term financial benefits, such as lower monthly mortgage payments and decreased overall interest paid over the life of the loan. Consequently, borrowers with higher credit scores may find themselves with a mortgage that is more manageable and less expensive in the long run.