Home Ownership and Credit Score February 26
So you want to pursue the American Dream and be a homeowner. You have spent countless weekends looking for homes and found the perfect home. You dream about it everyday and just can’t wait for the keys. Then you go find a loan officer and fill out the application for the loan and he pulls out your Credit Report. Then just when you thought every thing is well, the loan officer says that your application has been denied.
You ask him why and the officer says that your Credit Score was low. That shatters your dream and changes your world right then and there. You are left with two options, either to improve your score and come back or to find an agency that finances people with bad credit. Since waiting is the last thing you can do, so you find an agency that finances people with bad credit. You fill out the application again and guess what they approve you. Just when you think you have gotten yourself out of the mess, you review your payments and they are $500.00 to $2000.00 more. These agencies take a bigger risk by financing people with bad credit so they charge a higher interest rate which almost doubles your payment. Now you are left with only one option: repair you credit.
The Credit Score or FICO score is the one important factor that determines whether you’ll be a homeowner or not. Therefore it is very important that you review your Credit Report before starting your home ownership process. Not only will this save you time in the process but can also save you a lot of money by reducing the interest rate. The better your Credit Score the better interest you will get. So get a copy of your Credit Report from all three agencies and look for any inaccurate information and report them. Also don’t buy a car (or anything big) within a year before you apply for the home loan. Try to get your score above 620 if you want to secure a loan and push it over 700 if you want a good interest rate.