When preparing to buy a home, there are several factors that can impact your interest rate. One factor is the amount of down payment you plan to make and another one is your credit score. Your credit score indicates how risky of a borrower you are and a high score can significantly upgrade the mortgage terms you are offered.
Below is an article from trulia.com that provides helpful tips and practical steps you can take to increase your credit score in an effort to land the lowest possible interest rate. After reading the article, give us a call so we can discuss your situation and create a strategy to help you buy or sell your home.
Source: trulia.com | Re-Post Sean Carney 10/13/2017 –
How to win at the credit score numbers game.
If you’re considering making the leap to homeownership, there’s more to think about than the curb appeal of those Springfield, IL, homes for sale—the health of your credit score tops the list. To many, a credit score seems like a random trio of numbers determined by a complicated algorithm, but it represents much more to a lender who’s considering whether to approve your mortgage loan. While you may not need a perfect credit score, it’s important to know what you can do to improve your numbers.
A low credit score can indicate you’re a risky borrower, while a high score can significantly upgrade the mortgage terms you’re offered. But even if your score teeters on the edge of dismal, there are steps you can take to speed up the credit repair process and improve your chances of landing a home with manageable loan terms.
What’s the minimum credit score for a mortgage?
The minimum credit score required to receive a loan depends in large part on the type of loan you’re considering. FHA loans have some of the lowest credit score requirements, at 580 with a 3.5% down payment. However, that doesn’t take other applicants out of the running; FHA lenders allow lower scores with a down payment of 10% or more. Veterans Affairs (VA) loans are a bit trickier. While the VA doesn’t have a minimum credit score requirement, VA lenders do—and that number varies by lender. Some lenders require a score of 620, while others might be at 640. The good news? Getting a “no” from one lender doesn’t mean you’re out of luck. For conventional loans, most lenders will look for at least a 620 credit score, according to Chris Hauber, a mortgage loan originator with Hallmark Home Mortgage in Denver, CO. Ideally, however, applicants would need to have a 660 credit score to land a better rate and avoid jumping through additional hoops.
What is a good credit score?