Mortgage lenders consider several different factors when deciding whether to approve or deny your application for a home mortgage. While lenders want to be sure that your income will be sufficient for paying your mortgage each month, they also check your credit score. When it comes to buying a house, your credit score can be key.
WHAT IS A CREDIT SCORE?
Basically, a credit score is a numerical rating of your overall financial responsibility. Your credit score is helpful for determining your credit risk; it signifies how well you’ve handled debt in the past and allows for an assessment of the likelihood of your paying bills and repaying loans in the future.
CREDIT SCORE RANGE
This number comes from analyzing your credit in terms of different considerations, like the types of credit you have (including recently opened lines of credit), the length of your credit history, your payment history for previous loans and bills, and your current credit usage. Minimum required credit scores for buying a house vary depending on the type of loan you seek, but a score in the 600s and up often is given as a guideline.
WHY IS YOUR CREDIT SCORE IMPORTANT?
Your credit score plays a major role in your ability to secure a mortgage loan. Not only does it impact your initial qualification, but it also impacts the interest rate and down payment requirements, and more. If you have a good credit score, it will increase your chance of getting approved for a mortgage with a favorable, low interest rate. That is, the higher your credit score, the more likely it is that a mortgage lender will want to work with you as a potential homebuyer. Having a low credit score often results in a lender granting the mortgage with a high interest rate; but at the worst, it can disqualify you from receiving a mortgage altogether.
If you’re planning to buy a house, your credit score will play a major role. If your credit score is lower than optimal for securing the mortgage you need, you will have to increase the score to qualify. While there are no quick fixes when it comes to boosting your credit score, you can take steps to increase it so you will be able to qualify for a loan. Make sure you focus on paying off your outstanding debt on time, every time; and resolve any other credit or collections issues you might have. While mortgage lenders will review your personal finances as a whole, boosting your credit score before you try to buy a home will give you more options.
If you are interested in buying a house on or near the Texas coast, consulting a professional real estate agent like those at WEICHERT, REALTORS® – The Place of Houses is an excellent first step to take. The reputable group of real estate experts at this Corpus Christi, Texas-based real estate agency is the professional team to call for help navigating the current market and understanding all your options. WEICHERT, REALTORS® – The Place of Houses employs experienced property specialists who offer outstanding guidance and support to their clients as they go through the process of purchasing a home. Contact WEICHERT, REALTORS® – The Place of Houses to find out more about how they will assist you.