Most people obtain a mortgage when buying real estate in Virginia Beach, Chesapeake, Norfolk, Suffolk, and the Hampton Roads area. Real estate can be costly so getting the best rate and terms on your new home can save you tens of thousands of dollars over the course of the mortgage.
Healthy credit, we all want it. Approval of your home mortgage is dependent on many
factors. Lenders want to know how much of a risk you are before lending money. The
higher your credit score the less risk and better terms you receive when buying real estate. If you need
assistance with home mortgage professionals, contact your REALTOR®.
Your credit score commonly know as FICO (Fair Issac) is used by local Virginia Beach
and national companies not only for home mortgage issues but many other credit
issues such as cars, furniture, insurance, and more. Credit scores are obtained from the “big
three” reporting agencies:
Each of these reporting agencies has different scoring criteria so yours may vary slightly.
Generally your real estate lender will use the middle of the three scores for home mortgage purposes.
Your credit score is made up of the following items:
- Payment history counts for 35%
- What amounts you owe counts for 30%
- Length of credit history counts for 15%
- What types of credit used counts for 10%
- Any new credit counts for 10%
You should review your credit at least annually and may be more often when considering purchasing a Virginia Beach home within the next 12 months. This will help you avoid mistakes.
The law allows you now to receive a (free credit report (once annually). Get this immediately and look for errors or omissions. In our next post we will talk about ways to improve your score and fixing errors on your credit report.
You will be amazed how you can rapidly improve your score and real estate mortgage terms with some careful attention.
