How Your Credit Score Impacts a Home Loan
If you’ve considered buying a home, you know that many things affect your ability to get a home loan. However, you are likely very concerned about your credit score and how it will impact your home loan. We’ve put together some information about this, so you’ll know what to expect as you start the home buying process.
- A score of 620 is considered the base level for obtaining a home loan. If your score is under this number, it is still possible, but you may need to look at special lending programs.
- The higher your score, the better interest rate you’ll receive. Even a 1% difference in interest rate can have a significant difference in how much you pay each month on your home loan.
- You can improve your credit score. Look at your credit report and find out what is causing your score to drop–work on this! You may be able to dispute issues with the credit reporting companies or pay off a delinquent account to improve your score.
- Working with a lender is one of the best ways to improve your credit score. Lenders can suggest the best ways to boost your score and get ready to become a homeowner.
While a good credit score will likely make getting a home loan easier and perhaps lower your interest rate (and thus monthly payment), a perfect credit score isn’t a necessity to get be approved for a mortgage. With all of the options available in lending today, it is possible for many people to qualify for a loan–even those who may not have thought it was possible.
The best thing to do is to reach out to a lending expert. The team at Liberty Financial in Louisville Kentucky would love to help you–no matter if your credit score is superior or it needs a bit of work. We can’t wait to hear from you.