A higher credit score will lower your mortgage interest rate and give you more buying power. Since the COVID-19 induced recession, buyers are finding that some credit scores that were previously sufficient to qualify for mortgages are now inadequate. And if you’re torn between buying or renting, your credit score might make the decision for you. Read on to learn some great ways to raise your credit score before buying a home.
My Mortgage Insider explains,
“The Federal Housing Administration, or FHA, requires a credit score of at least 500 to buy a home with an FHA loan. A minimum of 580 is needed to make the minimum down payment of 3.5%. However, many lenders require a score of 620 to 640 to qualify.”
In reality, marginal borrowers may find that a 640 credit score is the absolute minimum required for a conventional loan. Therefore, it’s critical to raise your credit score before beginning the home buying process, and here are seven ways to do that.(more…)