One of the first steps you should take when you are deciding to purchase a home is to know your credit score. And the second step is to obtain a copy of your credit report.
You can easily find your score when paying a credit card online, as most cards offer your score to you. To get the credit report requires a different path. Each of the three major credit bureaus will provide you with a copy of your credit report, upon request. And there are many avenues online to obtain it for free. Or, if you are working with a mortgage rep, they can also provide you with a copy.
Once you receive a copy of your credit report, look it over carefully. If you see any errors, take steps to correct them.
If you believe that you need a credit score of 750 or higher to get a mortgage, you are in good company. And you are mistaken. To qualify for a FHA (Federal Housing Authority) mortgage, a minimum score of 620 is all they require. In fact, over 50 percent of all mortgages are given to people whose credit score is under 750. Of course, you will probably get a mower interest rate if your credit score is higher.
If you feel the need to raise your credit score, here are a few ideas which may help. When paying your bills, be sure to pay them on time. Late payments will negatively affect your score. Try to keep your credit card balances under 50% of your credit line. And under 30% is even better. When making credit card payments, always try to pay at least 20% more than the minimum. And try to minimize the amount of inquiries into your credit file. If you have too many inquiries, it will also negatively affect you.
Once you have the knowledge of what your credit score is, it is time to contact a mortgage rep to get Pre-Approved. This will let you know if you can get a mortgage, and if yes, you will know how much you can afford. Then it is time to contact a Realtor.
Give us a call – Bunny and Art Reiman, Realtors at 732-598-7700. Of visit us online at www.BunnyandArt.com