You‘ll need a credit report to make sure your score and reporting are accurate. Work directly with a lender on your credit score. They can help provide recommendations, work with scoring agencies, and improve your score when you obtain your loan.
General Guidelines when it comes to a loan
Good credit matters
Higher credit scores have lower borrowing costs.
Focus on your credit score long before your loan.
Improve your score
Credit score differences add up to thousands of dollars.
Pay down debts
Pay close attention to your debt to income ratio.
How your credit score affects you
599 – SLEEP ON THE COUCH
Few quality loan programs exist. Work to improve your score.
620 – BUYER BEWARE
Subprime Mortgages are available but carry high fees.
720 – MUCH BETTER TERMS
The minimum score for a loan with good terms with low fees.
750 – SHOP WITH CONFIDENCE
Best loan programs and the lowest borrowing costs on the market.
Other useful information
Points and Rate on a mortgage:
Borrowing money costs money. Loans require interest, which can be paid over time, or up front as additional points. Paying the interest ahead of time results in a lower overall monthly payment. This requires upfront cash and is not a payment towards the principal. Paying additional points is only recommended for purchases where ownership is long term.
You don’t need a 20% down payment:
Traditional loans requiring 20% down are no longer your only options. Plenty of public and private lenders offer a variety of loan programs that can provide you with a great loan with as little as 3% down. First-time homebuyers have additional state and federal programs available.