Nexus Realty, LLC & Nexus Realty Group
Nexus Realty, LLC & Nexus Realty Group
Beth Ottana, Nexus Realty, LLC & Nexus Realty GroupPhone: (603) 848-4304
Email: [email protected]

Know your credit score: Mortgage terms & approval basics

by Beth Ottana 10/30/2024

If you're planning to buy a house, managing your credit score is vital. Mortgage lenders use credit scores as a benchmark for qualification, and a lower score can hurt your chances of being approved for a mortgage.

Here are some more details about how credit scores affect your mortgage loan chances:



What should my score be before I apply for a regular mortgage?

The customary loan application process requires a credit score of at least 620. It's possible to get a mortgage with a lower score, but you may have a higher interest rate as a result.



How is your credit score determined for a mortgage?

The loan officer obtains a single credit report containing all three credit report types. The lenders may use your credit score or lower middle credit score to decide if a joint partner applies.



How can a good credit score help with mortgage approval?

Mortgage lenders require higher credit scores because they use it as a way to measure how well you handle outstanding debt. The higher your credit score is, the less risk you pose to their lending. You could end up saving thousands over the life of your loan and capitalize on a lower monthly payment.



Is it possible to get a home with bad credit?

It's possible to get a mortgage with a low credit score, but there are trade-offs to be aware of. With conventional loans, a lower credit score might require a higher down payment or private mortgage insurance.

Other loan options like VA loans or loans offered by the Federal Housing Administration have more flexibility when it comes to minimum credit score. However, these mortgage loans come with other specific requirements for approval.

Maintaining a good payment history and credit report will help you in more ways than just getting a mortgage. However, for a major purchase like a home, it's crucial to have the best possible financial standing before beginning the process.

About the Author
Author

Beth Ottana

I am the Principal Broker and Co-Owner of Nexus Realty LLC (NH) and Nexus Realty Group (MA). I combine a lifetime of living in the area with a legal and commercial insurance background, negotiation skills, market understanding and dedication to serving my clients with all of their real estate needs. Please contact me today to help with buying or selling your next home! I look forward to working together.

REALTOR | Broker Owner | New Hampshire & Massachusetts

Areas of Focus/Expertise: All Residential Real Estate Transactions Including Single and Multi-Family Homes, First Time Buyers, Move-Up Buyers, Seniors, Investment Properties, Short Sales, Foreclosures, Condominiums, Relocation and Vacation Homes.