Coldwell Banker Realty - Newburyport
Coldwell Banker Realty - Newburyport
Kim Weeks, Coldwell Banker Realty - NewburyportPhone: (978) 265-2519
Email: [email protected]

Your credit score: Mortgage approval facts to know

by Kim Weeks 03/26/2023

If you're planning to buy a house, managing your credit score is vital. Mortgage lenders use credit scores as a benchmark for qualification, and a lower score can hurt your chances of being approved for a mortgage.

Here are some more details about how credit scores affect your mortgage loan chances:



What should my score be before I apply for a regular mortgage?

The customary loan application process requires a credit score of at least 620. It's possible to get a mortgage with a lower score, but you may have a higher interest rate as a result.



How is your credit score determined for a mortgage?

The loan officer obtains a single credit report containing all three credit report types. The lenders may use your credit score or lower middle credit score to decide if a joint partner applies.



How can a good credit score help with mortgage approval?

Mortgage lenders require higher credit scores because they use it as a way to measure how well you handle outstanding debt. The higher your credit score is, the less risk you pose to their lending. You could end up saving thousands over the life of your loan and capitalize on a lower monthly payment.



Is it possible to get a home with bad credit?

It's possible to get a mortgage with a low credit score, but there are trade-offs to be aware of. With conventional loans, a lower credit score might require a higher down payment or private mortgage insurance.

Other loan options like VA loans or loans offered by the Federal Housing Administration have more flexibility when it comes to minimum credit score. However, these mortgage loans come with other specific requirements for approval.

Maintaining a good payment history and credit report will help you in more ways than just getting a mortgage. However, for a major purchase like a home, it's crucial to have the best possible financial standing before beginning the process.

About the Author
Author

Kim Weeks

Kim Weeks, Realtor® Providing you with full-time professional service since 1995 With over 24 years of providing professional real estate services, Kim Weeks is your go-to gal for both your buying and selling needs. Kim is a native to the Newburyport area and loves introducing her clients to the beautiful homes set along the picturesque Merrimack River. Kim enjoys her career as a Realtor, and while her raving clients will tell you her laughter...