If you are debating if it is a good time to buy, consider your credit score. Guidelines have tightened up.
Personally, we are not big fans of FICO scores. Example, consider the person who has been paying their bills, maybe not always on time, but they eventually get paid. Then something tragic happens in their family. They maybe not able to make ends meet during the crisis but always come through. FICO will shred this person. Does this mean they will not pay their bills when they get over the crisis? No. Life just through a left hook and they are recovering. However FICO loves to throw salt in the wound. Makes them feel like a fish out of water.
All that aside, It is absolutely necessary to get your credit score up high to score a decent rate on your home.
Travis Black, our recommended lender gave us the following information on Understanding Credit Scores:
Credit scoring was developed in the 1960s as a means to determine whether or not consumers were likely to repay their loans. The score ranges from 350 to 850 with a higher score being extremely favorable. Essentially, a high credit score translates into lower interest rates for the borrower.
There are five factors that comprise the credit score. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. This gives the lender a snapshot of an individual’s sense of financial responsibility and ability to pay back loans.
There are many quick ways to improve your credit score, but it may not always be the way you think. Closing a rarely used credit card with a good pay history may actually lower you credit score. Before making any changes, consult with a credit or lending professional.
Travis BlackBroker/OwnerFirst Choice Mortgage
(909) 203-5900 http://www.yourfirstchoice.com/
http://www.robertandchristy.com/
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