Do you Need Good Credit to Buy a House? 

Are you're wanting to buy a home, but like many interested homebuyers, you are wondering if it's possible, due to your credit? What credit score do you need to buy a house? Do you need good credit to buy a house? For the best interest rate, yes, because it is credit score dependent. However, you can get a mortgage with a credit score as low as 580, if you can provide a down payment or if it's a VA loan. For a credit score at 580, you can apply for an FHA or VA loan. If you want 100% financing to buy your new home, you will need a minimum credit score of 640. The higher your credit score, the lower the interest rate for your mortgage.

Can You Get a Mortgage with No Credit?

Yes, sometimes, but you would need four different alternative credit sources. One of those sources must be 12 months of housing with no late payments. The others could be a light bill, phone bill, ar insurance, etc. with 12 months of no late payments on those as well.

What do Mortgage Companies Require to be Paid Before they Lend?

Depends on the kind of mortgage, but generally, any collections that are non-medical that together amount to $2500. Always pay the judgment and leans prior to closing. This does not include credit card statements and balances. 

Potential Roadblocks to Obtaining a Mortgage

Prior bankruptcies, short sales, foreclosures, etc. There are specific waiting periods for each of these and they are different for each kind of loan, so contact Pat Holsten for more information. 

How to Improve Your Credit Score

You can improve your credit score by:

  • Paying your bills on time
  • Don't max out on your credit cards
  • Don't close your credit card accounts when you pay them off
  • Don't cosign for anyone
  • Don't overextend yourself
    • You ultimately know how much you can afford, so being aware of your finances and what you need to pay off is important

How to Build your Credit to Buy a House

Start with getting a secured credit card for a low amount ($300) and keep at $10 balance on it. Make sure that the credit card company you use reports to all three bureaus (Equifax, Experian, and TransUnion). After that, generally within 60-90 days, you will have a credit score.

Extra Advice 

  • Don't depend on services like CreditKarma; they are very general services and have the potential to report incorrectly.
  • Try not to let any of your accounts go into collections. 
  • Stay away from credit repair companies, unless you research them carefully. Most things people can do themselves and still avoid paying a credit repair company, with the right advice. 

Information and advice in this blog post were provided by Pat Holsten of American Security Mortgage. If you are wanting to know more information, contact her at pat@patholsten.com.

We Can Help!

Are you looking for the best real estate agency in Wilmington, NC? When choosing a real estate agent, be sure to go with someone who has the expert knowledge of listing and selling waterfront property.  The Regina Drury Real Estate Group has that and more.  We are a full-time real estate company in Wilmington, NC; our crew can provide you with all of our expert knowledge and focus on maintaining a high degree of customer service that will leave a lasting impression.  Contact us today to talk more about your Wilmington, NC Real Estate needs.

 

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