As you may have guessed, the higher your credit score from FICO, the better chance you will have in getting the loan or mortgage. Also, the higher your score usually means that you can negotiate a better interest rate since you would be considered less risky to the lender.
You need to have a FICO credit score of at least 500 in order to be considered for approval for a mortgage. Less than 600, you will need to have a down payment.
If you have a FICO score of 600 to 640, there's a good chance that you can go for a no money down 100% financed mortgage. Anything over 640 lets you have a chance to be approved for a mortgage of up to 25% more than the cost of the house. This is great for improvements and renovations.
If you are aware that you have bad credit, it is a good idea to get a copy of your credit report and review it before approaching lenders. You want to make sure that it is accurate and that there is nothing on the report that should not be there.
If you are planning on buing something else on credit, you should always wait until your mortgage goes through first. Adding more loans into your report could cause you to not get approved because the lender might see it as causing you not to afford the mortgage even if your credit is good.
Knowing these few little tips can help you get approved! |
