Over the course of a lifetime, financial development can
lead to some wonderful opportunities. A person’s financial development and
state of affairs is something that is particularly important when it comes to
taking out a bank loan to further progress in life, and the largest loan most
people will require is a mortgage for a home purchase. Since the process of
getting approved for a mortgage is heavily dependent on credit history and that
three-digit credit score that reflects reliability as a borrower, you should
always put forth practices to keep that number healthy and growing.
However, how much importance does a credit score hold? Does
that magic, three-digit number need to be above 800 in order to get approved
for a mortgage?
The FICO Score: The
Magic Number That Counts
When you apply for a mortgage, you will have to provide
certain information to your financial institution or mortgage broker. The
mortgage specialist at your bank or mortgage broker will then pull your credit
score and your credit report. Fair, Isaac and Company is the scorekeeper of
your FICO score, which ranges from 300 to 850—850 being the highest of all
scores, and 300 being the lowest.
Every person in the United States has three FICO scores from
the three different credit-reporting bureaus. Up to 80 percent of financial
lenders will use a borrower's FICO score in order to approve a mortgageapplication and determine a suitable interest rate on the loan.
The 600 Range: Fair
And Good Credit Mortgage Options
If your credit score isn't perfect (ie. above the 800 mark),
you need not worry too much. There are many options available for those with
credit scores around 600, and, with many different financial lenders to
consider, having a mortgage approved sometimes means persisting with an
application to several different lenders before receiving a "yes."
With a "fair" and "good" credit rating
falling between 620 and 719, there are options available to get approved for a
mortgage well under the perfect 800 mark.
An FHA loan is a type of mortgage loan that is insured by the US Federal
Housing Administration, offering an option with more flexible qualification measures.
For homebuyers with a credit score above 620, this is a viable and common
option.
720 To Perfect: Under
800 And Still In Great Shape
The median credit score in the United States is 723, and
anything above 720 is placed with the marker of "excellent credit."
Therefore, just because you may range just slightly above 720, which may feel
miles away from a perfect 800, you're likely in just as good of shape when it
comes to getting approved for a mortgage. You can expect a mortgage approval
with good interest rates if you have a credit score in higher than 720.
Keeping an eye on your credit rating and understanding the
measures that are used in determining your credit score will certainly help you
maintain a good score. Of course, speaking with a professional and receiving
expert advice is always recommended. For specified information on your
particular situation, contact your mortgage professional to discuss your
options for receiving a mortgage loan.
Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston area home? Visit: www.discovercharlestonareahomes.com
-Jeff Cook
Jeff Cook
Real Estate
Charleston,
SC
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