Are you considering buying a home? In a month? In six months? Ever? In my last blog post: "Consider your timeline" we talked about the timeline for the home purchase process. The first thing you should do is check your credit report (if you haven’t already). Most of us will have to work with a lender for at least one home purchase in our lifetime and when we do we should be aware of what our credit score is and how it can help or hurt our efforts to purchase the home we want. There are several credit reporting agencies that lenders use: Equifax, Transunion and Experian. You can pull your credit report from each of these agencies once per year for FREE - and you really should.
"How does my credit score affect my ability to purchase a home? "
When talking about your credit no one really likes surprises, I mean unless your score is HIGHER than you thought it would be, right? Pulling your credit report allows you to see your score so you know what to expect. There are mistakes on credit reports more often than most people think. Have a credit card that you paid off and closed YEARS ago, checking your credit report may reveal that it’s still on there. What if you had credit cards that were lost or stolen over the past couple of years? Pull your credit report, check for errors and take the time to make sure everything is correct.
When looking at your credit score understand that the better (higher) your score is the more likely you are to qualify for a loan at a great rate. A credit score above 740 can get you a really good rate but a credit score below 620 can make it difficult to get a home loan at all. Once you understand what is on your credit report and have made sure all errors are corrected you may still need to take some time to work on improving your credit score. Make sure all payments are up to date and that future payments are made on time. If you don’t have sufficient credit history you can apply for a credit card, but make sure not to carry a large balance from month to month on it.
If you are seriously wanting to purchase a home you should avoid larger credit based purchases until your home purchase is complete as well. All too often people find out what they qualify for in a home purchase, they get really excited and head straight out to purchase a car. After they’ve purchased a car they no longer qualify for a home loan. The additional payment changes the debt to income ratio and even though they still have good credit they will have to pay down on the vehicle before they will be able to qualify for a home loan.
Considering buying a home in 2017? I would love the opportunity to help! Give me a call or send me an email - even better, sign up on our website while you are here (be sure to select me as your agent). We can take some time to make sure you are on the right track to homeownership this year!
Michelle Peacock '94 | Realtor®
O: 979-703-1979 | C: 979-220-8033 | F: 979-703-1980
3091 University Dr. East Ste. 230 | Bryan, TX 77802
Your source for Bryan/College Station Real Estate