CREDIT SCORES & BUYING A HOME
The thought of purchasing your dream home is exciting! But before you get too far ahead of yourself in your home search, you will want to ensure your finances are in order. This includes reviewing and strengthening your credit. Here’s what you need to know!
Why Your Credit Score and Report Matters
As a buyer, a strong credit score and report makes you a more desirable loan candidate. When deciding to approve you for a home loan, mortgage lenders take a deep dive into past car loans, student loans, credit cards, bills, and more. They also review your history of repayment and public-record information. If their findings are positive, they will be much more likely to approve you for a loan and offer lower interest rates and better terms.
What Credit Score Do You Need
The credit score required for a loan depends on the type of mortgage you select, the size of your down payment, and your lender. Most lenders require around a score of 620 or higher to be approved for a conventional mortgage with lower interest rates and flexible repayment periods. If a buyer would like a Federal Housing Administration (FHA) loan, they require a minimum score of 580 and, for a loan through the U.S. Department of Veterans Affairs (VA), score requirements differ depending on the private lender.
How to Improve Your Credit
Reviewed your credit score and realized it may need some work? There are ways to improve your score. These include, but are not limited to, correcting payment errors on your credit report, ensuring you make all payments on time, making micropayments in between due dates, and paying down credit cards.
If you’d like to make a plan to purchase a home in your near future, and want to make sure everything is in line with your credit, or would like a customized strategy of what you can do to improve your credit, let me know! I can connect you with a lender who can work with you through this and even set you up with free credit counselling services!
