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How Your Credit Score Affects How Much House You'll Be Able To Buy

credit-score
Your credit score is now the most important factor in determining how much house you can buy, so if you are in the market for a new home, you need to understand how it affects you.In order to make it easy for mortgage companies to determine the risk of lending to you, they are using a system called credit scoring (also called “FICO” scores). When lenders look at your credit report, they can instantly see how much debt you have, how reliable you are with bill payments, and if you’ve had any bankruptcies within the last several years.

With your credit report, lenders get a “credit score” which takes all of this information and boils it down to a number between 300 and 900. The higher the number, the less of a credit risk you are seen to be, and this is how lenders decide which types of loans you will be eligible for.As with all new things, there is controversy over credit scores.

To be elligible for some types of loans, you require a minimum credit score without any exceptions. And credit scores fluctuate over time. In fact, the mere act of applying for credit can lower your credit score.

How to make sure you have the highest credit score possible

To maximize your credit score, you should avoid applying for any new credit cards or consumer loans.
Don’t go to the discount store and take them up on the “No interest, no payments for one year” offer — and avoid financing a car!After you buy your home and get your mortgage you can do all of these things, but before then it’s a bad idea. Buying things on credit hurts your credit score, and leaves less money for your downpayment.Lenders also look at this figure to decide how much money they will lend you, and how much interest they will charge you on the loan.

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That’s why it’s best to wait until after you’ve bought your home to go shopping for furniture and appliances. There is also another reason to wait.Once you’ve bought your home, you can get a loan for up to 100% of your home’s value to buy anything you want.If you learn to play by the rules of the lenders’ game, you can get the best credit score possible, which improves the odds that you can get the home of your dreams.

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We bought our first home with the help of these astonishing experts. Estro Groups was generally responsive and patient even at end of the week and late night. Regardless of the number of inquiries that we've posed! They taught us in the exchange ...
by Gurpreet Sandhu
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My husband and I had a dream of downsizing from our house in Ontario into a small condo closer to where we work and play in Portland. Estro Groups and his skilled team helped make that dream a reality. The sale went smoothly, and we just closed on an ideal new place we're excited to call home.
by Aakaanksha
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I recently sold a house with Estro Groups and while this can be a very stressful process, I felt 110% confident by partnering with Estro Groups. He was candid, provided great feedback, helped explain clearly all details, and managed the actual sale negotiation brilliantly. In addition, he was highly responsive to every one of my questions, no matter how small.
by Amit Sharma
Customer
My husband and I had a dream of downsizing from our house in Ontario into a small condo closer to where we work and play in Portland. Estro Groups and his skilled team helped make that dream a reality. The sale went smoothly, and we just closed on an ideal new place we're excited to call home.
by Lisa
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