A lot of things factor into getting a mortgage, but it starts with your credit score. A score of 680 can be considered the minimum. If you’re under a 680 credit score, your mortgage insurance premiums will get very pricey. For people with lower credit scores, a down payment plays a huge factor in loan approval. A 20% down payment and a 620 credit score should get you a loan, but a smaller down payment will tighten credit standards.
Ideally, you want your score to be in the 740 range to get optimal pricing and terms on your loan.
There are home loans for people with a variety of credit scores, but it helps to set yourself up for the most affordable terms possible. Begin building a good credit score NOW. For advantageous mortgage terms, strive for a credit score in the 740 range. It may take a while to clear up your debt, but the time and effort you spend to improve your credit score will be the smartest move you can make.
As you work on improving your credit, you can see how you’re doing by checking your free credit scores every month, and make sure you’re looking at your free credit reports each year at AnnualCreditReport.com. Sometimes errors can be dragging your score down—and you need to find them to fix them.
If you have questions about mortgage loans or any aspect of the buying process, contact me at 682.551.0336. I will be happy to answer any questions you may have.