What Credit Score is Needed to Buy a House?
If you’re in the market to buy a home, knowing what kind of shape your credit score is in can give you an idea of whether you’ll qualify for a loan and what kind of interest rate you’ll pay. Your credit score has a huge impact on your ability to buy a house.
Home loans backed or financed by the Federal Housing Administration and the Veterans Administration have different views of credit scores. FHA recently changed its minimum credit score to 580, which qualifies you for lending programs that require only a 3.5 percent down payment.
What is your credit score?
Credit card companies and lenders rely on credit scores, which determine someone's chances to borrow money - and how favorable the terms will be. Scores range from 200 to above 800. Scores below 620 are considered risky; 720 and over are excellent.
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Home loans backed or financed by the Federal Housing Administration and the Veterans Administration have different views of credit scores. FHA recently changed its minimum credit score to 580, which qualifies you for lending programs that require only a 3.5 percent down payment.
What is your credit score?
Credit card companies and lenders rely on credit scores, which determine someone's chances to borrow money - and how favorable the terms will be. Scores range from 200 to above 800. Scores below 620 are considered risky; 720 and over are excellent.
.
There
are five categories of scoring: payment history (35%); amount owed
(30%); length of credit history (15%); new credit (10%); and types of
credit (10%). Lenders receive your score and "reason codes," which are
the keys to improving your score.
Check your own score yearly by ordering reports from the three major credit scoring companies: Equifax (www.equifax.com), Experian (www.experian.com), and TransUnion (www.tuc.com).
.
Notify
the credit bureau of inaccuracies, along with copies of documents that
dispute incorrect entries. Close accounts not in use. Request that late
payments older than seven years be removed. Verify and update accounts
and account numbers. Verify your address and Social Security number.
To improve your score:
Pay
your bills on time. Reduce outstanding debt. Build up your savings.
Don't fall for illegal schemes that help create a new credit identity.As always, I appreciate referrals from my friends and past clients. If you know of anyone who is looking to buy or sell real estate in Virginia or Maryland, please send them my way!
For More Information:
Kim Kroner Realtor - Associate Broker
Top Producer - NVAR Multi Million Dollar Sales Club
Member - Long & Foster Chairman's Club
Long & Foster Christie's International
(703) 946-2526
(800) 9611328
309 Maple Ave W. Vienna, VA 22180
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