The Right Credit Score for Buying A Home

A credit score offers a clear financial picture of an individual. This score refers to the worthiness of credit referring to a FICO score. This works as a type of surety for the lenders as a good credit score is assurance of the borrower being able to repay the loan taken for a home. homepath renovation mortgage financing A score of around 800 and more ensures that the monthly installments will be paid on time, while a smaller score of around 300 is difficult as there are possibilities of the borrower missing out on the monthly installments to be paid.

A "Good" Credit Score

You need to consider certain factors which make up ‘good’ credit scores. These include

• Owed Amounts (those who have used up a large amount of their credit tend to have lower scores).
• The past history of payment determines almost 35 percent of the credit score. Bill payment on time tends to give a good score.
• The time length the individual has credit with a longer history working out better for the scores.
• Those that open up new credit on a regular basis tend to have a low credit score.
• The types of credit also determine the credit score, like credit cards, retail accounts and installment loans boost up the score.

An individual gets a low interest rate with a high credit score. As there are different credit scores, the lender uses specific ones for mortgage loans.

A Credit Score for buying a home

As mentioned, there are no fixed rules for this. the money storeThis tends to change after or during a recession. If you find out that the economy seems to be shrinking the lenders tend to impose restrictions on the tighter side. The minimum required score also tends to depend on the type of loan.

The minimum required score for a loan which is conventional and is backed by Freddie Mac or Fannie Mae is around 620, while a loan with the FHA, a score of 580 is the requirement. The other factors considered by the lenders are the amount of down payment being made and the income of an individual. This can make a difference to the rates of interest. You can consider a credit score of 600 to be apt.

Mortgage lenders

Mortgage lenders tend to have a specific outlined credit scores for giving out loans. The FICO score works out as one of the most popular credit scores for getting the required loan for your home. You find almost 90 percent of lenders looking for this score. In short, lenders are looking for those who can make their payments on time along with the interest. It is not impossible to buy a home with bad credit as all that is required is extra money and a wee bit more effort. With the government programs for mortgage it is possible to buy a home even with poor credit. Individual’s can raise their credit scores by making their bill payments on time and pay off large debts.

I’m the owner of Gustan Cho Associates Mortgage & Real Estate Information Resource Center. It’s a subsidiary of Gustan Cho Associates https://gustancho.com/