What Are Credit Scores and How Do They Affect Your Mortgage?

Credit Scores - Frederick Mortgage Lender

Once you make the decision to become a homeowner, it is common to ask yourself what exactly is involved during the application process for a home loan in Frederick. There are many factors that contribute to the type of loan you could qualify for but the two major factors are your income and your credit score.

So, to help you get started, your local Frederick mortgage lender with Weinstein Group Home Loans has explained what credit scores are and how they can affect your home loan.


Credit Scores Generally Explained

A credit score is a numerical value that typically ranges from 300 to 850 and is determined by three main credit bureaus; Equifax, Experian, and TransUnion. This number is theoretically based on the individual’s ability to pay back a loan or a credit card bill. Some factors that influence your credit score depends on whether you miss a loan payment and how many accounts you have open.

The range of the score you have can largely impact which loan structures you can qualify for and the rates you will receive. A higher score typically equates into better rates and a lower cost of lending for your family. If you have more troubled credit, you may be charged a higher interest rate since you will be considered a higher-risk borrower, which means the likelihood of you defaulting on your payments is considered to be high.

If you believe you have a low credit score, do not worry because that does not mean your Frederick mortgage lender will deny your mortgage application. We will work to overcome any obstacles that your financial history may face. Every blemish on credit can be fixed.


Don’t Wait to Discuss Credit

Before you begin your mortgage application, you may want to try and raise your credit score as much as possible since it has such a significant impact on your loan approval and the cost of it. That is recommended when you are prepared for final engagement in securing a house. However, earlier on it may be necessary to get a baseline and work with us to prepare a comprehensive action plan to get you in the best possible position. Often, we hear that credit work is being done before clients wish to even discuss the overall financing process with us. We are a resource of vast knowledge and will do any credit repair advising or repair work needed at no cost to you.  It is one of the many benefits of working with a knowledgeable mortgage advising team.


Ways To Raise Your Credit Score

We will go into more depth to explain this in future publications. However, some useful tips to help raise your score would be to first pay down as much high-interest debt as you can and keep that balance to a minimum. You want to lower the utilization ratio between the credit limit lent and the balance you carry when those issuers report the calendar day to the credit bureaus. Also, never miss a payment. If you have a difficult time remembering when payments are due, set a monthly reminder on your phone or put a note on the fridge so you never forget. If you have missed payments consecutively or have outstanding collections, the process for removing can be tricky. If they are in collection status already DO NOT PAY THEM. Get in touch with us first. We can advocate for you and have them completely removed.


Contact Us

For a no obligation and free credit evaluation or for a more detailed information plan on credit scores and how they can affect your mortgage please consider working with the most skilled and educational mortgage company in Frederick. Contact Weinstein Group Home Loans at 301-514-7889.

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