Michigan Real Estate Purchase: Credit Scores and What to Think about Your Score
I know it is hard to understand exactly what your credit score is, how it is calculated, and especially how it affects you when you want to buy a home. Here is a general, and easy to understand guide to your score in reference to obtaining a mortgage.
Below 500: Well I can’t sugar coat it, you are in pretty deep. This is where it may be a good option to seek consultation from a good attorney or a non-profit credit repair service (emphasis on non-profit).
501-560: You score is pretty low, but not beyond repair. You will not be able to qualify for a mortgage while your score is in this range. However, if you struggle through some high interest credit cards, maybe a secured card or two, you can bring it up.
561-619: You can probably obtain a mortgage, but it will be a very trying experience. You may be better served by simply waiting a month or two, trying to pay down some credit card balances, whatever you can do to optimize your score.
620-680: It may still seem just average, but in mortgage terms life is much peachier about the 620 mark. There are some things you won’t be able to do. You may find it difficult to purchase with no money down. But as long as there isn’t something odd about your application keeping you from obtaining a government backed loan, you are golden.
680 and up: Yes I realize that your score can get much higher from a 680, but for mortgage purposes there is really not much difference once you are above a 680. Once you get over 720 you may get a very slight rate discount, but nothing noticeable. Today is November 18, 2008 and this breakdown may change as the lending business tightens even more but for now, that’s what it is.
I hope this helps, and good luck on all of your financial endeavors.
Below 500: Well I can’t sugar coat it, you are in pretty deep. This is where it may be a good option to seek consultation from a good attorney or a non-profit credit repair service (emphasis on non-profit).
501-560: You score is pretty low, but not beyond repair. You will not be able to qualify for a mortgage while your score is in this range. However, if you struggle through some high interest credit cards, maybe a secured card or two, you can bring it up.
561-619: You can probably obtain a mortgage, but it will be a very trying experience. You may be better served by simply waiting a month or two, trying to pay down some credit card balances, whatever you can do to optimize your score.
620-680: It may still seem just average, but in mortgage terms life is much peachier about the 620 mark. There are some things you won’t be able to do. You may find it difficult to purchase with no money down. But as long as there isn’t something odd about your application keeping you from obtaining a government backed loan, you are golden.
680 and up: Yes I realize that your score can get much higher from a 680, but for mortgage purposes there is really not much difference once you are above a 680. Once you get over 720 you may get a very slight rate discount, but nothing noticeable. Today is November 18, 2008 and this breakdown may change as the lending business tightens even more but for now, that’s what it is.
I hope this helps, and good luck on all of your financial endeavors.
For more in-depth answers or help go to our website:
www.iconmortgagelending.com
www.iconmortgagelending.com
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