My daughter followed in my footsteps and became a realtor, however buying a home today (or obtaining a mortgage), has changed radically since my career began. During the real estate boom obtaining a home mortgage was something most upstanding young couples could do, regardless of credit history. Today things have changed and to be considered for a home loan, you must have minimum credit score or most lenders won’t consider your application.
At least one factor for this change is based on the economy and the over extension of credit given by home mortgage lenders xem bóng đá trực tiếp. When the housing market took a downturn and foreclosures became commonplace, lenders began overcompensating requiring higher credit scores difficult for many to meet, and 100% financing has nearly become a thing of the past.
If your credit score is below 640 you’ll find it difficult to find a lender who will seriously consider your loan application, since most are looking for those with high credit score, verifiable “proof of income”, as well as adequate funds for a good down payment.
Most loan officers are good people confined by the rules placed on them by their own financial institutions; however if you talk one-on-one explaining your situation, perhaps asking them for advice on improving your credit score, when you do this, you’re building a relationship with the lender for the future.
While identity theft is not the subject of this article, it is certainly a wise to contact the three major credit bureaus, (Experian, Equifax, and TransUnion) and obtain up-to-date credit reports, ensuring their accuracy and knowing in advance what the lender will being seeing when considering the minimum credit score for home loans.
While there are many reasons a person may fall behind in their debts (some beyond our ability to avoid), if at all possible bring any of your outstanding bills up-to-date prior to making your loan application, this will show the lender you’re serious, even if you don’t qualify today.
Once you have done some housecleaning on your credit reports, now is the time to start repairing or improving your credit. First and foremost, begin to pay all of your bills on time. Even one late payment can have a huge impact on your score. The last five years of payment history is the most important so even if you had late payments in the past, you can still improve your score now with prompt payment. Also, making payments to credit cards on time and for more than the minimum payment will result in increased lines of credit.
A credit card company increasing your line of credit is not code for “let’s spend more”. If you truly want to raise your credit score, then keep as much of a cushion between the amount that you owe and your credit limit. Credit bureaus like to see at least half of your credit limit unused. Having less available will result in a lower credit score because you are seen as a higher risk. If you will soon be applying for any type of loan, it would be in your best interest to pay down your credit card bills as much as you can. It is important to note that even if you pay off the balance every month, it will still show up on your credit report. So, if you are in the habit of charging many expenses during the month for whatever reason, you should start using cash instead.
When you do pay off a credit card in full, do not close out that account. Closing accounts lowers your total amount of available credit. You may want to consider keeping those cards and making a purchase once a year just to keep the account current. Doing so will also increase your length of credit history making you appear more credit worthy. While keeping accounts that you already have current is a good idea, opening up new accounts can actually hurt your score even if it does increase your amount of available credit. Too many new accounts in a short period of time will make you seem risky to potential creditors