Knowing your credit score or getting a recent copy of your credit report is one of the first steps that you can take toward knowing how ready you are to start the home buying process.
Make sure all the information listed on your report is accurate and work to correct any mistakes. The higher your credit score, the more likely you will be to receive a better interest rate for your mortgage, which will translate into more ‘home for your money.’
Many potential buyers believe that they need a 750 FICO® Score or higher to be able to purchase a home. The truth is that according to Ellie Mae’s Origination Report, over 53% of loans were approved with a FICO® score under 750 last month!
Here are some tips for improving your credit score:
- Make payments, including rent, credit cards, and car loans, on time.
- Keep your spending to no more than 30% of your limit on credit cards.
- Pay down high-balance credit cards to lower balances, and consider balance transfers to free up credit.
- Check for errors on your credit report and work toward fixing them.
- Shop for mortgage rates within a 30-day period — too many spread-out inquiries can lower your score.
- Work with a credit counselor or a lender to improve your credit score.
Speak with several lenders:
Ask questions, get all the information you can about what type of programs they can offer you. Get information about interest rates, closing costs and points. When you have found a lender you are comfortable with then follow their direction. You want to be able to get the best rate possible. The lender will then get you pre-approved for a mortgage. Doing this will ensure that you know your budget before you start looking for your dream home.
Ready to get started? Contact us so we can provide you with a list of lenders you can speak with.