Choosing a lender or a Realtor® isn’t the first step in becoming a homeowner. The quality of your wallet starts the home buying process. To propel your dreams of homeownership forward, giving serious consideration to your credit score is a must. Alongside that focus should be an analysis of the type of lender to use, keeping in mind that a pragmatic choice will increase your odds of success. By this, I mean selecting a lender who will meet the seller’s approval–not yours. After all, the seller holds the keys to your next house. Please the seller with your offer price, terms, AND the company financing your purchase and you are more likely to get your hands on those keys.
The Fair Isaac Company bases your FICO score on the summary of your total credit history. The score ranges from 300 to 850, with the majority of people traditionally having a score of 650. Job loss has been common in the last few years, but FICO scores aren’t necessarily adjusted “on a curve.” A low score is a low score and that often means you can’t get a decent interest rate. Some of the pieces in calculating your FICO score are:
Lenders want to make sure that giving you a loan is a safe move. Your credit score gives lenders an insight into what type of borrower you are solely because of your credit history. Because of the shift in the economy, most home buyers should have scores in the range of 740 or higher to get an acceptable interest rate. If your score is lower, you can still qualify for a loan, but the interest paid in the long run could be more than double the amount of an individual with a higher FICO score.
Getting your credit in order is the best way to ease into buying a home. Contact Me and I can help you get on the right track to the home of your dreams.
How do you boost your credit score? Building your FICO score takes time. It can be hard to make a significant stride change in your credit score with quick fixes, but your score can improve in a year by keeping tabs your credit report and by using your credit wisely. The most important thing is to know your FICO score. You’ll improve your credit score by using these tips:
Knowing the ways you can raise your FICO score, you’re one step closer to becoming a homeowner. Remember that when it’s time to apply for a loan to purchase a house, you’ll want to keep your lender applications within a one-month window to avoid a negative mark on your credit score. Multiple applications or “credit pulls” within that period count as just one. With the help of my preferred lenders, the loan application process can be a stress-free experience so you, too, can become a homeowner.
Learn more about FICO scores at myFICO.com, Fair Isaac’s informational site and review your credit history for free at annualcreditreport.com. And, for a small payment, you can get your FICO score from each bureau on their websites: equifax.com, experian.com and transunion.com.
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