Your credit score determines quite a lot in your life. From qualifying for a credit card or an auto loan to getting utility services or renting an apartment depends heavily on how good your credit scores are. Buying a home is no different. Your credit score helps determine the rate and conditions you receive on your mortgage loan. If your credit score is high, then lenders will see you as low-risk and offer you a low rate on your loan with good conditions. A lower score will get you a higher interest rate.
What Credit Score Do I Need to Buy a Home?
Most lenders have a baseline credit score by which they make their decision to approve or deny mortgage applicants. The maximum credit score is 900, though a perfect score is extremely rare. Any score in the 700s or above is typically considered excellent and will most likely get you a loan with the lowest interest rate. When your score drops into the 600s, it starts getting risky. However, it all depends on that particular lender.
Can I Still Buy a Home With Bad Credit?
If your credit score has dropped into the 500s or lower, you can qualify for bad credit home loan or a subprime loans. These loans have interest rates that are a couple of percentage points higher than those offered to prime borrowers and often come with additional fees.
So, if you’re in the market to buy a home, you should always consider your credit first. If you have great credit, keep it up, find an experienced Real Estate agent, and find that dream home. If you’re credit has suffered a few blows, work on building your credit up with these simple tips.
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