Are you aware that your credit score can significantly impact your mortgage terms and how much money you can borrow?
I think we should talk about this.
“Hey there, future homeowners! It’s Deon with DeonDoesLoans.com, and I answer mortgage questions and help people with their real estate goals. Today, we’re plunging into the mysterious world of credit scores and unraveling how they impact your mortgage journey. Stick around – you won’t want to miss this!”
“The Basics of Credit Scores”
“Let’s start at the beginning – what is a credit score, and why does it matter? According to the Consumer Protection Financial Bureau or the CFPB for short,” A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time,”
Some components of a credit score are payment history, available credit, and how much of that available credit is in use or your credit utilization.
There are six categories in total, and when weighted, make up your overall score. Lucky for you, you have three scores from the three credit agencies. It is best to know your credit score, and your bank offers a free service to monitor this. Also, you can get a free yearly credit report from freeannualcreditreport.com; I’ll leave a link below.
“Minimum Credit Scores for Mortgages”
“Not all credit scores are equal, especially in the mortgage game. There are programs for most credit scores over a specific number. It’s best to work with your loan officer to determine your three scores exactly and match them with the programs that best fit your situation.
I know that’s pretty vague, and legally, it has to be. But, take some comfort in knowing that no credit score is permanent. Working with your loan officer can pave the way to a better score, leading to a better financial situation. Following the steps to meet the guidelines can benefit you for years.
“Improving Your Credit Score”
As I’ve mentioned before, credit scores don’t have to be permanent and are worth improving. Who wouldn’t want a better score for lower loan rates, better insurance rates, and more money in your pocket? Taking a few steps today can set you on the right path toward your first home. Start with simply lowering your overall usage to under 30%—the credit bureaus like this; the lower, the better. For example, if the limit is $1000, lower your balance below $300. This first step may be challenging, but start with one card and move on to the next. I know you can do it!
“So that’s it for now– a quick dive into the world of credit scores and their impact on mortgages! If you found this video helpful, don’t forget to give it a thumbs up, subscribe for more mortgage insights, and share it with anyone gearing up for homeownership. I’m Deon with DeonDoesLoans.com, and I answer your mortgage questions and talk about homes. Until next time, keep building that credit and chasing those homeownership dreams!
