Congrats! If you are onto this next
step you have decided that you are absolutely ready to buy a home! Still you
are probably concerned and a little worried about what lies ahead on your
journey to home-ownership and if you can actually do it, but don’t be afraid –
we got the next steps covered for you!
So you have decided that you are
both emotionally and financially ready to buy, but there are a few things you
need to make sure that are in line before you can actually be a home-owner. This
brings us to: #2. “Get Your Credit
Report”
Before you go any further you must
check your credit score to ensure that it will be approved for a mortgage loan.
You score should be 650 or higher to qualify for financing (this is a recommended
credit score not a rule). The score your lender will accept for conventional
loans is determined by a multitude of factors – salary history, payment history,
your current wage, etc. But if you have a score of at least 650 you will most
likely qualify (remember it differs from lender to lender on what they will
accept). Your credit score is a big factor into what your interest rate is, so that is why you want it to be above 650, so your interest
rate is better.
So what if your credit score isn't 650+? There are a few things you can do on a monthly basis to improve your
score.
1.
Make sure you pay your bills on time
2.
Pay down your credit balances
3.
Continually check your credit score on a regular
basis for errors
If you do these three things you
can work on getting your credit score where it needs to be to qualify and get a
better interest rate.
If you are worried or are having
issues with your credit score make sure you get in touch with your preferred
Loan Officer who will be more than willing to help you figure out the confusing
role of a credit score. Jeff Chrast, of Marketplace Home Mortgage, is a great
resource with this step!
Once you got your credit score you
are ready for the next step – researching loan programs. Check back later to
learn more about step #3 on your road to home-ownership!
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