How Your Credit Score Affects Your Housing Search

So, you’re interested in buying a home? Besides having your financial documents and a down payment ready, you will need to make sure that your credit score is ready.

Most people buy their homes with a mortgage. There aren’t many people who buy their homes with cash because that can be a difficult task for most people to accomplish. Coming up with a large some of cash such as for a house can feel near impossible for some. And that is where getting a mortgage comes in.

How Your Credit Score Affects Your Housing SearchA mortgage can help people reach their dreams. In order to get approved for a mortgage, 99.9% of the time you will need a good credit score.

If you are interested in credit repair, there are professionals out there who will work towards improving your credit so that you can get approved for loans, receive lower interest rates (and save thousands of dollars), and more. CreditRepair.com will help you create a game plan to improve your credit score, they will contact credit companies directly on their own, they will communicate with the credit bureaus to work towards making a change, and they provide an online dashboard that will help you monitor everything that is going on. It is all very affordable and will most likely save you thousands in interest fees and late charges.

Below are different ways your credit score can affect your housing search:

Your credit score can affect if you can buy a home.

This is probably the most important one. If your credit score isn’t high enough, then you might be rejected for a mortgage altogether. This is something that you definitely do not want if you are wanting a home. This would be a hard thing to change as well.

In order to get your credit score high enough, this could possibly take years. It all depends on where you are starting at.

Your credit score can affect your interest rate.

If your credit score is high enough for you to be approved for a home loan, then the next thing would be HOW high is it? If your credit score is good but not good enough, then you might have a high interest rate on your home loan.

You might have a 6% interest rate on your mortgage instead of a 4.25% interest rate, which can be hundreds of dollars of a difference on a home loan each month for your mortgage payment. Yes, something as simple as your credit score can affect whether or not you will be paying extra money towards your mortgage payment each month or not.

Your credit score can affect when you buy.

As a mixture of the two above, your credit score can affect when you buy as well. If your credit score isn’t high enough to get approved or to get the interest rate that you want, then you might put off your home buying process until you can get to a point to where you are happy with buying a home.

Did your credit score affect your housing search? In what ways?


Image via Flickr by Karol M

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3 Responses to "How Your Credit Score Affects Your Housing Search"

  1. Even in a rental application, credit score is important. The higher your score, the better chance you will be accepted. If you have a low score, you might even keep your better scoring partner out of a apartment.

  2. Pavlina says:

    You cannot do a short sale until you’ve alaerdy missed payments. If you are up to date on your mortgage, the bank has no reason to worry and therefore will not accept a short sale. The bank knows you can still make the payments because you still are, and will expect you to continue to fulfill your end of the bargain. If you do fall behind on payments, you have to have a good reason why. Such reasons might be a death in the family, loss of job or an injury that has kept you from working. A short sale protects the owners credit when the borrower can no longer make the payments. In that event, the bank realizes it’ll take many more months to wait to evict you and sell it themselves than if they cooperate with you and allow you to retain possession of the house while they sell it. The bank takes the financial hit and pays all the fees in the sale of the property, but in turn, the owner is not entitled to any equity that has built up on the property.If you have absolutely no equity in the house and just want to get rid of it, you might want to do research or talk with a lawyer about a quitclaim deed. With that deed, you sign off all your rights to someone else and they take on all the responsibility you once had. If nobody you know wants the property, I’m sure there are investors who will be more than happy to take it off your hands, rent it out and wait a few years for the market to rise. Then, you can move on to a less expensive house free from the hassle of your overpriced property.I am not a lawyer and not qualified to give legal advice, so please speak with an attorney about your options. Some of them may give you some quick advice over the phone without charging you. Good luck

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