Purchasing a Home - Your Credit Worthiness
Monday, 02 November 2009 13:21 | 
Author: Jon Tennant Nilsson |
No matter if you are purchasing your first home, or if you are an active investor and are purchasing your twenty-fifth property, your credit score will play a critical role in obtaining a mortgage loan. By wisely managing your credit and understanding how your credit score affects your borrowing ability, you will be able to make the most out of your investment.
No matter if you are purchasing your first home, or if you are an active investor and are purchasing your twenty-fifth property, your credit score will play a critical role in obtaining a mortgage loan. By wisely managing your credit and understanding how your credit score affects your borrowing ability, you will be able to make the most out of your investment.
Prior to applying for a home loan, you should get a copy of your credit report and verify that you have an adequate credit score to obtain the loan that you want. Credit scores are represented by a number that is given to you by each of the three major credit reporting agencies. It is based on a proprietary formula they have developed that determines your credit worthiness. The better your credit score, the more likely it is that you will qualify for a mortgage loan.
Experian, Equifax, and Transunion are the three major credit reporting organizations from which you can obtain your credit score and credit report.
Generally, having a higher credit score will result in obtaining a lower interest rate on your loan. Many lending companies will be more willing to work with you if you have a high credit score and they will also be able to lend you a higher amount of money.
The best way to get a high credit score is to be responsible when it comes to paying your bills. You will want to avoid having late payments and large amounts of outstanding debt, particularly with consumer loans and credit cards.
By understanding how to maintain your credit and how your credit score will affect the type of loan that you will be approved for. You will be one step closer to purchasing the home of your dreams.
Of course your credit score is not the only factor that will determine if you will be approved for a home loan. Lenders will also consider your financial stability, your income, and your employment status.
No matter if you are purchasing your first home, or if you are an active investor and are purchasing your twenty-fifth property, your credit score will play a critical role in obtaining a mortgage loan. By wisely managing your credit and understanding how your credit score affects your borrowing ability, you will be able to make the most out of your investment.
Prior to applying for a home loan, you should get a copy of your credit report and verify that you have an adequate credit score to obtain the loan that you want. Credit scores are represented by a number that is given to you by each of the three major credit reporting agencies. It is based on a proprietary formula they have developed that determines your credit worthiness. The better your credit score, the more likely it is that you will qualify for a mortgage loan.
Experian, Equifax, and Transunion are the three major credit reporting organizations from which you can obtain your credit score and credit report.
Generally, having a higher credit score will result in obtaining a lower interest rate on your loan. Many lending companies will be more willing to work with you if you have a high credit score and they will also be able to lend you a higher amount of money.
The best way to get a high credit score is to be responsible when it comes to paying your bills. You will want to avoid having late payments and large amounts of outstanding debt, particularly with consumer loans and credit cards.
By understanding how to maintain your credit and how your credit score will affect the type of loan that you will be approved for. You will be one step closer to purchasing the home of your dreams.
Of course your credit score is not the only factor that will determine if you will be approved for a home loan. Lenders will also consider your financial stability, your income, and your employment status.
About the Author:
Weichert Realtors, Brockwell & Portwood, located in the Tri-Cities area of Virginia is dedicated to serving you and helping you achieve the American Dream of owning the own home. We appreciate the opportunity to provide you with information, tools and expertise to help you buy or sell the home. We feature Fort Lee, VA real estateand Petersburg, VA homes for sale.