The interest rate you get on your loan is dependent on your credit score and your choice of lender. Know what it is before you shop. Above 740 is the best rates. 680 is about the lower end for decent rates. The difference can save you thousands over time.
*** Each time someone runs your credit, your score will go DOWN by 3 points!!!!!
Get your score before you shop and get it from a source that does not register as an inquiry on your credit report. Too many inquiries is often cited as a reason to decline a loan. This means DONT give a lender permission to run your report until you have decided to go with them for the loan. It may seam like a nice service they offer but is actually setting the hook in you.
Lenders like to “hook” you with a credit report inquiry so that you have to stay with them, knowing that your score will drop if you go another place.
Be careful of “free credit report.com” They are only free after you pay them.
The government site Annual Credit Report is free and does not ding your score.
The credit report you get can be one of your best choices. I like Clear Choice Credit, they provide the report and also several pages of suggestions of how to raise your score and how much your score will go up if you do their suggestions. It may be something like pay off Nordstroms to only 30% of the balance and your score will go up 20 points. Or something like that.
What hurts your score:
Credit cards with a balance more than 50% of the available limit. Other accounts similarly. Late payments hurt a lot. Always make payments on time. A 30 day late payment can ding your score 40 points. Bankruptcy stays on for 10 years, they hurt but are not a deal killer.
*****Before shopping get your credit report. Any judgement will have to be paid before you get a loan. Pay attention here!!!! If you have a judgement on your report, it’s old and you feel is not legitimate or fair, deal with the people BEFORE they get wind of your home purchase ideas. Once they know you are getting a loan they won’t budge an inch on getting the full amount out of you. If you contact them first you can usually negotiate a pay off much lower, e.g. you are moving out of state and want to offer them a reduced payoff. They know that out of state, is nearly impossible to collect. They will run your credit to look for inquiries!!!! If you already gave the bank permission to run your credit, they will know what is up and you will pay the full amount.
How much do you need to make for a loan? The payment should be below 30% of your income. The payment plus all other debt should be below 45% of your income.
How much for a down payment? New programs offer a 1% down payment! This is amazing. The lender with the 1% down also contributes 2% to you from their YSP, meaning you instantly have gained 2% equity.
Let me help you connect with the best place for a loan, email me directly!