Before you even start looking for a home, you should know what your credit score is. You can pull your own credit score from the three major bureaus without having points deducted from your credit score. You should know your score since it will affect how high your mortgage payments will be, and it will also determine if a lender will lend to you. Certain types of loans have a minimum credit score — if your credit is below the minimum, you won’t be able to qualify for that type of loan.
Many programs require you to have a minimum credit score. Most lenders will require these scores for these types of loans:
620 for a conventional loan;
580 for an FHA loan if you want your down payment to be as low as 3.5 percent;
500 to 579 for an FHA loan with a down payment of 10 percent;
620 for a VA loan;
640 for a USDA loan; and
720 or higher for a jumbo loan.
The lower your interest rate is, the less you have to pay to the lender for allowing you to borrow money. This also means a lower monthly payment for you. Even a half-point could make a large difference in how much you have to repay. While a half-point might equal $50 or $60 per month on your loan, when you pay that over 360 months, that is $18,000 to $21,600 over the life of the loan.
Creditors use your credit score to see how careful you are with credit – how you will pay it back, and if you will pay it back. The higher the score, the less risk you are to the lender.
Sometimes, you can’t help having a low score. You might have lost a job, or you might have had high medical expenses after an accident. Before you buy a house, you should get your score up as high as possible. While it seems like it will drop overnight, it definitely takes some time to increase your credit score. While you are working on your credit score, you can start putting some money aside for a larger down payment. To help increase your credit score:
Get a copy of your credit report and scores from all three major bureaus.
Go through your report. Make note of anything that is incorrect, including accounts you have and your personal information.
Dispute anything that is wrong with each of the credit bureaus. If you have an account that is not yours that is listed on TransUnion, dispute it on TransUnion. If it shows up on TransUnion and Equifax, dispute it on both.
Determine how much revolving credit you have. This is the amount you are allowed to spend on credit cards and some types of home equity loans. Divide the total of your balances by the total amount of credit you have. That number needs to be below 35 percent for a better interest rate. In some cases, a lender will not give you a mortgage if that number is too high.
Showing more credit with a lower debt to credit percentage increases your score. Don’t close out any accounts, but make sure they are all paid on time, and get the highest balances as low as possible. During the months before you buy a house, you should try to avoid using credit cards if possible.
Pay off as much debt as possible.
Remember, every time someone, other than you, pulls your credit, your score gets dinged. Don’t shop for a mortgage until you are ready to buy, and try to keep all inquiries within 30 days.
Keeping good credit is more than paying on time. You also have to responsibly manage your credit.
I have provided award-winning service to many clients over the past 25 years. Few other REALTORS are as trusted as I am. My clients trust my advice, and they know that I always look out for their best long-term interests. You can expect, and you will receive personal service that is second to none. When you hire me as your Agent you work with me and only me. I will answer your calls and respond to your text messages. I promise not to hand you off to another member of "My team" like others do. When you hire Ryan, you get Ryan.
I have called Southwest Michigan home for 40 years. My mother's family ran a local locksmith service, and my father served as the Chief Investigator for the County's Prosecutor's office for many years. I love all that this area offers, and I enjoy serving the buyers and sellers who are moving in or out of Southwest Michigan.
My wife and I have two children, and we would not want to raise them anywhere else. Between the award-winning schools and the plethora of youth activities offered in Southwest Michigan, it's a great place to call home. We enjoy spending time with friends at the beach, boating, golfing, hunting, skiing "Up North," and fishing.
We give back generously to the community that has been so good to us. Currently, I serve on the Lakeshore Public Schools Foundation Board (LEF), as Past President of the St. Joe Kickers Sports Club, and as a Rotarian in the Stevensville-Lakeshore Rotary Club. We donate throughout the year to various local organizations, schools, and youth sports groups.
I want to put my experience and knowledge to work for you. Having sold more than 500 properties while earning the trust and respect of my fellow REALTORS, who voted me the "REALTOR of the Year," I am confident I can earn your trust as well.
Looking to buy, sell, or invest in real estate? Please allow me the opportunity to serve you. I promise you will not be disappointed.
Ryan Arnt
Real Estate Broker/Company Owner
Keller Williams of Southwest Michigan
You can reach me anytime, call or text 269.470.6666, or email me at [email protected].
When you need a REALTOR, Rely on Ryan!