I hear consumers often believe they need perfect
credit to qualify for a home loan. While better credit scores get you the lower
payment and better terms, having poor credit does not immediately disqualify
you.
Many lenders offer programs that can finance your loan with credit
scores as low as 580 given there are other compensating factors. Some of these
factors may include cash reserves, higher down payment or equity position or
overall lower debt to income ratios.
Homeowners often believe that it is better to pay off
and close their credit cards. Lenders do not see this as a good thing simply
because there will no longer because a history of repayment patterns. It is
better to pay down balance at preferably 10-15% of your limit and pay the
balance off at the end of every month. Ideally, as long as you are making small
charges month to month and paying it off, you eliminate interest payments and
establish repayment history.
A tip to boost your credit score is if you have a family member with outstanding credit
who is willing to help. They can add you on the credit line as an authorized
user. Doing so will boost your credit within 60-90 days.
Comments
Post a Comment