When shopping the market for a Bellevue mortgage, you must first be familiar with your credit score. As a first-time homebuyer, you may be unaware of how your score can affect your interest rates. To help you get a basic understanding, Nicole Vaivadas of Primary Residential Mortgage Inc., has explained below what a credit score is, and how it affects your mortgage.
A credit score is a number determined by the credit reporting agencies, also known as credit bureaus. There are three main credit reporting agencies within the United States: Equifax, Experian, and TransUnion. Your financial information is sent to these agencies by companies in which you borrow money from or sign up for a credit card with. This includes: banks, retailers, and credit unions. Once the credit bureaus receive this information, they give you a score between 300 and 850. The higher your score is, the better credit you have.
How Credit Affects Your Mortgage
If you have a credit score above 700, it suggests you manage your finances well and are not in too much debt. This means that your Bellevue mortgage lender will be more inclined to work with you because you will not be considered high risk. If you have a low credit score, you are considered high risk because your credit has not been managed as well. The lower your score, the higher your interest rates on your mortgage can be. Some lenders will even refuse to work with you if your score is too low.
If you are looking for a conventional mortgage that follows the traditional Fannie Mae and Freddie Mac guidelines, then it is suggested that your credit score should be around 760. For an FHA loan that is administered by the Federal Housing Administration, the requirements are less strict, and you could qualify for a loan with a score as low as 500. For veterans and active military members in need of a VA loan, there is no minimum credit score requirement, however, the scores generally average around 620. If you live in a rural area and would like a USDA loan, a minimum score of 640 is generally required. For jumbo loans, you will have to have excellent credit, at or exceeding 760 due to the larger amount of money you will borrow.
To check your credit score and see which loans you qualify for, please contact your Bellevue mortgage lender at 425-818-5880.
What Affects Your Credit Score?
Your credit score can be determined by a few different factors, such as:
- Late payments or bankruptcy
- How long your accounts have been open for
- Your credit card balance in relation to your overall limit
- How recent or how often you apply for credit
- The types of credit you have: car loan, school loan, credit cards, etc.
For more information on credit scores or to see what kind of Bellevue mortgage you qualify for, please contact Nicole Vaivadas at 425-818-5880.