Many more ways that Money With Google can save you money – The Top Ways Your Credit Can Affect Your Mortgage Application:
Everyone dreams of having their own home one day. Many people start out in an apartment and dream of what it will be like when they can finally get a home of their own. Others start out in a small starter home and count down the years until they can make it into a newer, nicer and bigger home. No matter what the circumstances are to begin with, your credit score and credit report can either help you into the home of your dreams or hinder your dreams from coming true.
The first thing you have to do after you’ve found the home of your dreams, is to fill out a mortgage application. This is really the first step in the mortgage process. Lenders will pull your credit report to analyze how much of a financial risk you are. You are given a FICO score which comes from the Fair Issac Corporation. FICO scores can range from 300-850. Any score under 620 is considered poor. Anything above 720 is considered excellent. You can get pretty much anything you want with a credit score over 720.
If your credit score is around 500, you can still qualify for a mortgage. Your payments will be much higher than if you had better credit. Some lenders even specialize in poor credit mortgages. You can also get the help of a mortgage broker. A mortgage broker can advise you about what options you have and what the best option is for you.
Even if you have great credit and are already in the home of your dreams, it is so important that you watch your credit report carefully. You need to check your credit with all three credit reporting agencies to make sure there is no fraud on your account. Also, watch out for any mistakes on your record. It will also help to make your payments on time. If you need to increase your credit score, try to minimize your debt-to-income ratio. Pay off any credit accounts that have a high balance. Avoid making any large purchases before applying for a mortgage as well. These ways will dramatically affect your mortgage application. Not only will you get the home you want, you’ll increase your credit score.
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