Exploring Homes for Sale in East Gwillimbury? Credit Score is Important
If you are exploring homes for sale in East Gwillimbury, Credit score is important. Buying a home is one of the biggest financial commitments in most people’s lives. If you are taking out a mortgage, you should start the hunt for your dream home only when you are prepared to take care of your financial obligations. Rather than touring neighborhoods and visiting homes for sale in East Gwillimbury, you should begin your home buying journey with checking your credit score.
What is credit score?
Your credit score determines your credit worthiness. In other words, lenders will look at your credit score and determine whether you are financially capable of making your monthly mortgage payments. If you are considered a risk, the lenders will either turn down your mortgage applications or make you pay for private mortgage insurance (PMI) on top of your monthly installments. You also won’t get the best interest rates and there could be additional fees and charges to process your mortgage application.
Needless to say, your credit score is not just a numerical expression. It will have long-term implications on your home buying experience.
How is your credit score determined?
Your financial history, current income and financial liabilities determine your credit score. For example, frequent missed payments for your credit card debt will bring down your credit score. It will go up if you have kept up with the payments. Payments for utility bills, loans, insurance policies etc. are factored in when national credit rating agencies determine your credit rating.
It has been proposed in many U.S. states that rental payments should also be taken into account when determining an individual’s credit score.
What credit score do I need to buy any of the homes for sale in East Gwillimbury?
The minimum credit score requirement for buying any of the detached homes, condos or townhomes for sale in East Gwillimbury differ by the lender and the type of mortgage you are applying for.
For example if you are taking out mortgage from a conventional lender with at least 20 percent down payment, you will get the best terms and interest rates if your credit score is 700 or higher. But if you are taking out a FHA-backed loan, lenders will approve your mortgage application even if you have a credit score of 650 or more. However, lenders will need you to insure the home loan, meaning that you will make PMI payments in addition to your monthly mortgage installments.
You should visit lenders in your area and ask them their individual credit score requirements. You can also ask lenders for pre-approval so that you know the amount of loan you will get. It will help you determine your budget.
How to check your credit score?
You can ask for free copies of your credit report once every year from any of the three national credit rating agencies – Experian, Equifax, and Trans Union. You should get your credit report from all these three agencies to check if there are any discrepancies in the reports.
Building your credit score is the first step towards a hassle-free home buying journey. Make sure to stay current with all your debt and utility payments to ensure that you have a good credit score when you hit the market to buy any of the homes for sale in East Gwillimbury.