This is some great info about Credit scores!! Worth Reading for sure What is the minimum credit score to qualify for a home loan? There is no simple answer to this, because the minimum credit score depends on the loan program you apply for and the individual lender’s own guidelines and rules. They also depend on other qualifying factors such as your Loan to Value ratio (LTV) and Debt-to-Income ratio (DTI). The housing and mortgage crash of 2007-2008 reset the underwriting rules and virtually wiped out the subprime mortgage market. If you want to qualify for a loan, then you need to make sure that your LTV, DTI, and Credit Score/History meet the lender’s guidelines. The FICO Score Although there are different credit scores available, the most popular one is the Fair Isaac Company (FICO) Credit Score. Mortgage lenders use specific FICO scores to judge your credit worthiness. Although you can purchase Credit Scores and even FICO scores, they are not always the same as the one used by the lender. The FICO score ranges from a low of 300 to a high of 850. FICO scores are based on your credit history, as reported by the Credit Reporting Agencies. (Equifax, Experian, and TransUnion). Here are the top three factors of your FICO score: Timely Payments: Do you make your payments on time 1.Timely Payments: Do you make your payments on time? This is the most important factor. 2.Credit utilization: How much of your line of credit do you use? For example if you have a $10,000 line of credit, do you use up $9,000, $3,000 or pay off your balances each month). 3.Credit Mix: Do you have different types of credit such as credit cards, installment loans, mortgage loans, auto loans and student loan? By maintaining a high credit score, you can ensure a better chance of securing a mortgage as well as a lower interest rate which could save you thousands over the long run
Posted on: Tue, 13 May 2014 18:50:29 +0000
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