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    <guid>https://www.oakridge.net/blog/what-homebuyers-need-to-know-about-credit-score.html</guid>
    <link>https://www.oakridge.net/blog/what-homebuyers-need-to-know-about-credit-score.html</link>
        <author>carl.ericson@oakridge.realestate (Oakridge Real Estate)</author>
        <title>What Homebuyers Need to Know About Credit Score</title>
    <description> <![CDATA[ 



What Homebuyers Need to Know About Credit Score


Article from KCM


If you’re thinking about buying a home, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from Bankrate explains:




 “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”




This means your credit score may feel even more important to your homebuying plans right now since mortgage rates are a key factor in affordability, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 765. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider explains generally how your FICO score range can make an impact:




“. . . you don’t need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you’re wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).” 




Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO says:




“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”




If you’re looking for ways to improve your score, Experian highlights some things you may want to focus on:




Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.


Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.


Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.




When you’re ready to start the homebuying process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.


Bottom Line


With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, connect with a trusted lender.


 


Check out our other blog posts below for additional buying &amp; selling education


  


 
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    <pubDate>Sun, 02 Jul 2023 10:30:00 -0500</pubDate>
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    <guid>https://www.oakridge.net/blog/the-power-of-being-pre-approved-as-a-buyer-in-todays-market.html</guid>
    <link>https://www.oakridge.net/blog/the-power-of-being-pre-approved-as-a-buyer-in-todays-market.html</link>
        <author>carl.ericson@oakridge.realestate (Oakridge Real Estate)</author>
        <title>The Power of Being Pre-Approved as a Buyer in Today's Market</title>
    <description> <![CDATA[ 
The Power of Being Pre-Approved as a Buyer in Today's Market


Article from Keeping Current Matters







If you’re buying a home this spring, today’s housing market can feel like a challenge. With so few homes on the market right now it is essential to have a firm grasp on your homebuying budget. You’ll also need a sense of determination to find the right house and act quickly when you go to put in an offer. One thing you can do to help you prepare is to get pre-approved.


To understand why it’s such an important step, you need to know what pre-approval is. As part of the process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow.


Freddie Mac explains it like this:




“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”




Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow so you have a stronger grasp of your options. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.


Pre-Approval Helps Show You’re a Serious Buyer


That’s not the only thing pre-approval can do. Another added benefit is it can help a seller feel more confident in your offer because it shows you’re serious about buying their house. And, with sellers seeing a slight increase in the number of offers again this spring, making a strong offer when you find the perfect house is key.


As a recent article from the Wall Street Journal (WSJ) says:




“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”




Bottom Line


Getting pre-approved is an important first step when you’re buying a home. It lets you know what you can borrow for your loan and shows sellers you’re serious. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.


Check out our other blog posts below for additional buying education


  





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    <pubDate>Fri, 12 May 2023 08:00:00 -0500</pubDate>
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