Is your credit ready for a home purchase?
When you apply for a mortgage, your qualifications will be reviewed, and your credit will have a significant impact on what mortgage rates and loan products will be available to you. The stronger your credit, the better chance you have at qualifying for a great interest rate and more loan options. Because of this, your first step in the homebuying process should be examining your credit. Here’s how you can find out if your credit is ready for buying a home.
Review your credit reports
Your credit reports contain the details of your credit history that are used to calculate your credit scores. For that reason, it’s important to regularly review your reports to ensure all your information is correct and to check for any fraudulent activity. You have three credit reports – one for each of the three major credit bureaus. Click here to learn how to check your reports for free and dispute any inaccuracies you find.
Check your credit scores
Your credit scores are the 3-digit numbers that can have a big impact on your mortgage options. Generally, you need a minimum score of about 580 to qualify for a mortgage and about 740 to qualify for the lowest available interest rates. Like your credit reports, you have one credit score for each of the three major credit bureaus, but those scores can be calculated in different ways, so assume that any scores you find on your own are approximations of the ones your lender will use. Click here to learn how to check your credit scores for free.
Speak with a loan officer
While you can get a good general sense of your credit health on your own, you should speak with a loan officer for a true expert analysis of your credit as it relates to your home financing options. Your loan officer will evaluate your credit with you and show you which mortgage options you can expect to qualify for and what interest rates you can expect to obtain. They will also point out any potential credit hurdles and advise you on if your credit needs further improvement before you proceed with your home purchase. And as always, there’s no cost for a mortgage consultation with a Draper and Kramer Mortgage Corp. loan officer!
If you’re planning on buying a home, follow these steps to make sure your credit will be ready when you are! And never assume that your credit isn’t good enough to qualify for the home financing you need until you’ve spoken with a mortgage professional. Get in touch today for a free credit review and consultation to learn about your options.