Your credit scores play a very important part in determining whether
you will qualify for a mortgage.
Lenders look very closely at your credit report and determine whether
you have existing credit, balances, payment history, collections,
judgements, bankruptcies, etc.
If you have TOO MANY payment responsibilities, this could prevent you
from qualifying, as well as having TOO FEW open credit lines. Lenders
like to see 3 clean, active trade lines.
Having too few or no open credit lines prevents lenders from judging
whether you are credit worthy of handling a large mortgage payment.
The total of your monthly debt obligations is weighed against your
income. This percentage must land in a specific range in order to qualify
for a certain type of loan. This is your DTI, or your Debt-To-Income ratio.
Your credit payment history generates a ‘score’, usually one from each
of the three credit reporting bureaus: Experian, TransUnion and Equifax.
Lenders generally use the middle number of these three to determine
whether your score lands in range of qualifying. Today, that middle
score is usually required to be at least 638. The lower your score the
harder it will be to find a lender that will take your loan.
It’s a good idea to get a copy of your report once a year so you can
monitor your status and keep your report clean and accurate. A messy
report will slow your loan process down by weeks or months and you could
lose the contract on the house.
Below are some wonderful links to better explain credit scores, how to
raise your score and what affects it and some tips to fixing your credit
Let our experienced Agents Find your Home, Finance, Insure and Close on it.