Monday, July 18, 2011

Excellent Credit Scores

So you have recently married and are starting a new life as a couple. In your discussions with each other, you probably are trying to evaluate whether it would be a good idea to rent or purchase a new home, right? Of course owning a home does have several advantages over renting. But in today's market which is much different than it was in 2004 or 2005 which was known as the period of easy credit. At Present time, you have a definite advantage if you have a FICO score above 640. The FICO will be how a mortgage lender will judge your credit. The higher the score the better the rate of interest you will pay on your home mortgage loan. If you have an excellent or perfect credit scores that's way better and you should celebrate!A score of 720 or above will be a plus in your favor and you may qualify for a lower rate of interest as much as 3% to 3.5%. Now, you can see this is an advantage for having a good credit score. Score of 600-700 will get you a less favorable rate on your home mortgage. You could still be approved with this score but anything less than 600 is not favorable to you. And you would not qualify for the lower rate on your mortgage.

Nowadays, there are biggest lenders for home mortgages and they have raised their credit scores from 620 -640 on home loans which they are willing to fund. This means you would probably have to have a score of 640 to get an FHA loan. So keep in mind that your good credit score is very important when applying for a home mortgage.

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