A Stable Credit Score is all you need to buy a house.docx

1. A Stable Credit Score is all you need to buy a house. Meta Description – Ever wonder what credit score you will need for your mortgage loan? With this article, you will get an understanding of how and why the credit score is the most crucial factor. Before we go ahead, let’s discuss what a Credit score is! A credit score reflects your creditworthiness for applying for any mortgage loan. How you do your likelihood, like paying your debts and bills in time and how stable income do you have. These all factors are combined which creates a credit score for you. Now if your financial expenses are high, if you’re late in your bill payments then it might affect your credit score in a bad way. To make a credit score perfect, you have to keep your all-financial expenses and other payments stable and in time. A credit score decides which type of loan you will be able to apply for. While buying a house for the first time you must understand the whole credit score process to understand what score you need. On your credit score, your home mortgage lenders in Michigan will suggest to you what kind of mortgage loan you will be able to apply to. As I’ve researched for what credit score you need to buy a house, a score from the range of 500 to 620 or even higher than that is the credit score you need. If you have your credit score within the range then it might put you in a safe zone of not having a higher interest rate. Your credit score does see variations accordingly to your type of loan you’ve chosen. For example, if I chose an FHA loan then I will need a credit score of 580. Key Points: - ➢ Credit scores must be from the given range ➢ Your credit score might vary accordingly to your loan ➢ Your credit score will decide the type of loan you will be able to apply for.

2. A perfect Credit score is all you need to apply for home loans. When you acquire a credit score from the given range or higher than that, the possibility of your mortgage loan getting rejected becomes low. As your credit score also decides whether your interest rate will be higher or lower, it tells how important a role your definite credit score plays. From the Lender perspective, your perfect credit score creates an impression of you paying your credit bills with no due payment. And if your credit score is lower, for your lender the investment becomes a risky process. Let’s take one example to understand this. If you’re an owner of a grocery shop and a particular customer is buying groceries from you but paying you through debts. Does he pay his debts in time? If the answer to that question is “yes” then it means for your lender when he sees your credit score on a higher score, he/she will get assured that you will pay your loan amount in time. Key Points: - ➢ A good credit score creates a good impression on your lender ➢ Your good credit score assures your lender that you might pay the loan amount in time. ➢ Your credit score tells if you will be paying a higher or lower amount of interest rate. Your Mortgage Interest rate will get affected by your credit score. Your credit score number specifies what amount of interest rate you might pay to your lender. The slightest change in your credit score might differ your mortgage interest rate from higher to lower or lower to higher. Now if we take an example,

3. Suppose I have 200,000$ as a principal amount (the amount that I have to pay to the lender) on a 30-year fixed-rate loan, now the monthly payment amount and interest rate amount will depend on my credit score. So, if my credit score is – ➢ 680 to 699 - The Annual Percentage Rate will be 3.598% with a monthly payment of 909$ and the annual interest rate amount will be 127,624$. The reason why I gave this specific example is that this credit score can be said as the minimum credit number but only for the conventional loan type or the loans that need a higher credit score. Apart from that 500-credit score can be said to be the minimum credit number for an FHA loan. In all these, your credit score won’t be predictable as it might vary as per your expenses and debts. Paying your debts and bills in time might affect your credit score in a much better way. It will help you in the future when you will be applying for a loan. Some more points that can help you to improve your credit score – ➔ Check if there any errors in your credit scores ➔ Make yourself an authorized credit card user ➔ Get a secured credit card Key Points: - ➢ Your credit score will affect your mortgage interest rate. ➢ Your higher credit score will make a positive impression on your lender. ➢ Between 500 to 700, any credit number can be said as a minimum credit score. ➢ Improving your credit score is crucial as it decides what interest rate you will be paying. ➢ Pay your debts and bills in time and check your credit score for errors. Final Words Your credit score IS what decides if you will be able to get the loan or not. As much as you can go higher with your credit score, the lesser the interest rate you pay.

4. In short, make yourself known to your credit score, pay attention from time to time to check if your credit is changing. Stale your financial expenses to create a credit score that might attract lenders to you. And we as one of the mortgage lenders in Michigan will help you in having a perfect credit score. As one of the Mortgage refinance companies in Michigan, we can tell you that having a good credit score should be the main goal before you try to apply for a mortgage. References 1) https://www.credit.com/loans/mortgage-questions/check-your-credit-score-report-before-buyin g-home/ 2) https://www.thebalance.com/mortgage-rates-by-credit-score-4171904 3) https://loans.usnews.com/articles/what-credit-score-do-you-need-to-buy-a-house