The credit score is one of the most important factors when it comes to getting a mortgage. It can help you determine how much you can afford and how much interest rate you’ll be paying.
The credit score is calculated using information such as your payment history, debt ratios, and recent credit inquiries. Numbers can be scary, but these numbers are some that you should know, because they have an effect on your daily life!
Mortgage lenders use this information to decide whether they want to give you a loan or not. If they decide that they don’t want your money, then the process will end there and you’ll have no chance of getting approved for a mortgage loan at all!
It’s important to know what factors impact your mortgage rate and how they might affect your ability to secure one in the future. This is important to know when you go through the steps to buy a house.
Score Measure
Again, your score is one of the main things that determines your approval for a loan! If your score is too low, you won’t get approved.
If your score is higher, it shows that you are reliable with your credit, budgeting, etc. Always measure your score and observe whether it’s low or high.
The score that you want to be looking for is around 670 to 739. If your score is not around there, set a personal goal for yourself to get to that zone.
If your score is not good enough, everything you are going through for a loan will come to a screeching halt as talked about above. Your score should be the first thing that you get measured and squared away before you attempt to get a loan.
What Lender You Are With
It also depends on what type of lender you are with that is giving you the loan. Some require different score ranges that they will approve.
A certain lender may require a higher score for them to approve you for a loan. Others may be more flexible with their required scores.
That is why it all goes back to you checking your score and getting it to a place that you’re comfortable with. You could also do some research and see what each lending company wants to see in a credit score when they give out a loan.
Future Attempts
We already established that your score is number one and it being high or low will decide if you get approved or not. What about the future?
If you can finally get your credit score up, you’ll get approved. Congratulations, you’re most likely going to be the owner of a new home.
Then there’s the opposite side of the future where you haven’t increased your score and you may have even decreased it more! Opening more credit cards and impulse buying are big issues that lead to lower scores when things like credit you’ve opened aren’t paid off on time.
