No matter if you are purchasing your first home, or if you are an active investor and are purchasing your twenty-fifth property, your credit score will play a critical role in obtaining a mortgage loan. By wisely managing your credit and understanding how your credit score affects your borrowing ability, you will be able to make the most out of your investment.
Prior to applying for a home loan, you should get a copy of your credit report and verify that you have an adequate credit score to obtain the loan that you want. Credit scores are represented by a number that is given to you by each of the three major credit reporting agencies. It is based on a proprietary formula they have developed that determines your credit worthiness. The better your credit score, the more likely it is that you will qualify for a mortgage loan.
Experian, Equifax, and Transunion are the three major credit reporting organizations from which you can obtain your credit score and credit report.
By having a higher credit score, you should be able to get a better interest rate on your home loan. Many more lending companies will be willing to work with if you have a high credit score. Also, they will be willing to lend you a larger amount of money when your credit rating is favorable.
The best way to obtain and keep a high credit score is to be timely and responsible when paying your bills. You must avoid having late payments, skipping payments and having large amounts of outstanding debt, particularly with and credit cards and consumer loans.
By understanding how to maintain your credit and how your credit score will affect the type of loan that you will be approved for. You will be one step closer to purchasing the home of your dreams.
Of course your credit score is not the only factor that will determine if you will be approved for a home loan. Lenders will also consider your financial stability, your income, and your employment status.
Author Resource:
Weichert Realtors, Brockwell & Portwood, located in Colonial Heights, Virginia is dedicated to serving you and helping you achieve Your American Dream of home ownership. We appreciate the opportunity to provide you with information, tools and expert advice to help you purchase or sell your home. We feature Fort Lee, VA real estate and Petersburg, VA homes for sale .
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