5 tips on your credit score when you’re financing your home
*Disclaimer: Readers are advised to seek personalized financial advice for a comprehensive understanding of their situation. Products and pricing are subject to change. Not all individuals will qualify for certain programs. Give us a call to discuss your unique situation: 321-972-6468. Holly Ecimovic, NMLS 2396592, Licensed Mortgage Loan Originator/Processor. Edge Home Finance Corporation, Company NMLS 891464.
Your Credit Score: The Magic Number Behind Your Mortgage Dreams!
Does your credit score really hold the key to your mortgage approval?
Here are a few things to remember.
Imagine for a second your credit score is like a report card from your days in school. But instead of grading you on math or English, it’s judging your debt handling skills. That is one way of putting it. Here are some tips for you to think about:
1. Credit Score: The Mortgage Gatekeeper
In the mortgage world, your credit score is important.
Lenders use it to gauge if you’re a risky bet or a sure thing.
The higher the score, the less likely you are to default on your loan, in their eyes at least. Your score can seriously sway your mortgage approval chances.
2. Credit Score Tiers: Which Club Do You Belong To?
Where do you stand?
Credit scores usually range from 300 to 850.
If you have a 740 or higher, you’re in the elite club! Lenders will be lining up to roll out the red carpet for you.
If you’re between 670 and 739, you’re in the ‘good’ zone. Scores below 670 might mean you need to roll up your sleeves and boost your number before house hunting.
3. The Interest Rate Twist
It’s not just about the approval, your credit score also affects your mortgage’s interest rate.
Higher score equals lower rates, typically.
Think of it like a seesaw, when one goes up, the other comes down.
4. Credit Score: The Repair Manual
If your score isn’t quite as high as you want, don’t lose hope. It’s like a bad haircut – with time and a little TLC, it can be fixed. This is great news. Start by paying your bills on time, every time. Also, try to pay down your debts, especially on credit cards. Keeping your credit usage low is a good look in the credit world.
5. The Big Reveal: Lenders Consider More Than Just Your Score
Plot twist! While your credit score plays a huge role, it’s not the only character in your mortgage approval story.
Lenders also consider your income, employment history, and debt-to-income ratio.
Even with a not-so-great score, these factors could swing the pendulum in your favor. So, if your score is low, don’t despair, your mortgage dreams can still be a reality. A lot of factors are in play.
In the end, remember, your credit score isn’t just a number – it’s your golden ticket to your dream home. So take care of it, nurture it, and before you know it, you’ll be holding the keys to the place you want. And if your score isn’t up to par yet, don’t worry. By putting in small efforts, some time, and responsible habits, your score can definitely improve.
(Note: The above blog is a light interpretation of how credit scores affect mortgage approvals. Readers are advised to seek personalized financial advice for a comprehensive understanding of their situation.)