Did you see in the news that the Playboy mansion is up for sale? The asking price is listed at $200 million. Often when I see homes up for sale with a price tag of $200 million I wonder what the mortgage payment on a home like that would be for a regular gal like me. How to find out? I visit one of my favorite mortgage calculators on myfico.com and this is what it says:
With 20 percent down, the monthly mortgage payment for the Playboy mansion would be $71,669 with a top notch, 760-850 credit score.
Crazy, right!? And unfortunately out of my budget. However, if you take a look at the MyFico calculator you will see that it shows you how much money you can save on your monthly payments with a better credit score. So, if I had a not-so-great credit score, like a 620 to 639, I would be paying $86,558 per month, considerably more for the same house, the same 30-year mortgage.
When I say it pays to improve your credit score, it literally keeps cash in your pocket. These are the steps you can take right now:
1. Get a copy of your credit report: A free credit report is available to you each year at www.annualcreditreport.com. Examine your credit report for any errors. Highlight anything you see that is incorrect and dispute it with that credit bureau.
2. Have credit cards? If you have credit cards with balances, make a plan today to pay them down to 10 percent or less of the total available credit line. Keeping lower balances will help increase your credit score.
3. Pay bills on time: Perhaps the most simple habit you can get into that will help raise your score is to pay all of your bills on time. Once you're in the habit, time and good behavior will help your score to rise.
As for that mortgage on the Playboy mansion, let's knock off a few zeros to a figure regular people like us can relate to so I can illustrate the savings you enjoy by maintaining healthy credit. If you were going to buy a $200,000 home with a $160,000 mortgage, your monthly payment would be an as estimate of $717 per month with a 760-850 credit score. With a lower score, 620-639 you would pay a whopping $53,600 more for that mortgage! Money that could have been used for your kids college, or a down payment on a vacation home. So, whether you have the $200 million to spend or not, working to have healthy credit is always worth it! To maintain healthy credit follow my credit tips.