Buying a Minnesota house for sale before you know your credit score?

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Buying a Minnesota house for sale before you know your credit score?

Minnesota home buying and credit score

You are excited to start searching Minnesota houses online to buy and look at some cool photos and see the inside of some remodeled and updated bathrooms and kitchens, but before you get too far ahead of yourself you aren’t even sure what your credit score is.

The great thing about your credit score is that there are formulas and guidelines to follow to improve your credit score so that you more easily can qualify for your home loan and apply for the most competitive interest rates.

Improving your credit score 50-150 points by being smart is very possible.

As a general rule your payment history reflecting that you have been on time and that your balances, as a percentage factor, is a big factor on your credit score.

Let’s go over some popular home loans and how your credit score plays a factor.

Credit score and home loan programs

VA loans: Your credit does matter a lot on your minnesota home buying timeline and can affect how much you need as a down payment.

As a general rule with VA (Veteran) loans, having under a 500 credit score can even get you pre-approved.

Almost anyone reading this post right now has a 500+ credit score, but not everyone can be approved for a VA loan.

USDA loans have been tougher to get as of the spring of 2020 with the tighter loan market, so you should check in to see if they are currently available.

A USDA backed home loan is great because of the 100% financing option. If you don’t have much upfront it’s a great option. The home lenders do like to see a 580+ credit score with no past collections, so that’s where knowing your credit history can help you out.

FHA Backed home loan programs also like to see a 580+ credit score and as your score moves up to about a 650+ credit score there may even be programs available that allow for less money for a down payment.

Communicating about your credit history and credit score

If you have checked your consumer credit score or credit karma it may give you a ballpark of your credit history, but the scoring isn’t going to be what home lenders use as a scoring model.

If you haven’t monitored your credit online in awhile that could help you to know of errors that you can correct that could help you improve your credit score some.

When you reach out on live chat on messenger, you can ask some questions and try to understand the full picture before someone pulls your credit or you can check it yourself online through the major credit bureaus: Equifax, Transunion, and Experian. You don’t need to know your credit score upfront, you can still reach out.

Many people can qualify for a home loan without even realizing that they can, you just have to reach out and ask about the timelines and how the process works and educate yourself along the way.

To learn about a Minnesota contract for deed with owner financing and no banks click here

Talk to you soon,

Ron

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