How your credit score can affect your ability to purchase a home in Daphne, Fairhope, Malbis, Mobile, Point Clear and Spanish Fort, Alabama.
Helpful hints to look at before you purchase your Alabama home in Daphne, Fairhope, Malbis, Mobile, Point Clear and Spanish Fort
Whether you are a first-time home buyer, a move-up buyer or you are planning to refinance your existing home loan, it is important to understand how your credit history influences the process. When you are being considered for a loan, the lender looks at your past payment history, the amount of credit you have outstanding and the amount of credit you have available……………a snapshot of you as a borrower.
Mortgage lenders rely either on a consumer’s credit score, such as a FICO score developed by Fair, Isaacs & Company, or use a combination of FICO scores and other factors to price a loan. Credit bureau information is used to obtain a number that represents how likely you are to make your loan payments on time. FICO scores range from approximately 250-900, and in general, higher score predict timely mortgage payments. Your credit history directly affects the interest rate and fees (or points) a lender charges. Comsumers with the best credit generally pay the lowest amount for a home loan. Building and maintaining strong scores may be as simple as improving your credit profile. Recommendations for doing so include; Making timely payments each month. Paying off outstanding debt and limiting the amount of credit you use. Requesting lower limits on current credit cards to avoid high credit limits. Closing credit accounts limits the number of credit lines. Checking credit reports periodically*. Not applying for credit you do not need.
While it may seem intimidating at first, understanding and improving your credit score is easier than you think. And the time and effort you invest can pay off handsomely in lower home loan rates, lower monthly housing expenses and better loan terms. *The three major credit bureaus who provide reports for a small fee are
Equifax (800-405-0081), Experian (800-682-7654) and Trans Union (800-888-4213.
Denise Horton is the branch manager of the Mobile office of Countrywide Home Loans, Inc., a national leader in residential finance. The office is located at 6337 Cottage Hill Road in Mobile. For your home loan needs, call Denise @251-602-0552.
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