Before looking at Mansfield or Ashland homes for sale, many would-be buyers take time to improve their credit scores. As a general rule, the better your credit is, the easier it is to access home loans on favorable terms. That usually means better interest rates and saving thousands over a mortgage's life.
Our REALTORS® have helped many clients understand how to tackle this process. We have spoken to many people who have put off their plans to buy a home due to their low credit score, even when they have substantial current income.
Luckily, you can improve your credit score in 2021 no matter where you start from!
Your credit score is a value between 300 and 850. For the average private home loan, lenders generally look for a credit score of at least 620. If you want a Jumbo Loan, you'll need anywhere from 700 to 740. However, some special programs have lower requirements, including those aimed at first-time homebuyers.
For example, if you qualify for a Veterans Administration loan, you will only need a credit score of 580. The same is true of an FHA loan. And if you are buying a home in a rural area, you might have access to the USDA home loan: The minimum credit score here is 640.
Five different factors make up your credit score:
Total amount owed
Length of credit history
New credit opened
Types of credit
A history of on-time payment is the single most important element in determining your credit score. It is also wise to have less than 30% of your available revolving credit – like credit cards – in use at any one time. For what it's worth, starting your credit history earlier in life will also help.
Here's how you can improve your credit score in 2021:
Contact us to find out more about buying a home.