How Credit Score Influences Down Payment Requirements

How Real Estate Broker Can Give Advice

 

Credit score is very important when it comes to any type of financial move that is somewhat more significant. Getting a mortgage definitely falls into this category, and if you’re serious about getting a large enough sum to buy a good home and enjoying lower interest rates, then your credit score will be very important.  Talking with a real estate broker in advance of a purchase can be of great benefit.

 

But how does credit score influence the amount you have to provide as down payment? That question is relatively simple to explain in general, but it can get more complicated when you want to find real, concrete answers.

 

The fact is there is no “one size fits all” answer, and each lender will have different policies. Also, FHA and VA loans have advantageous offers that benefit people with lower credit scores. When you hunt for an FHA loan, you can typically keep your down payment at under 5% even if your credit score is lower than 600.

 

Most times, however, when it comes to regular mortgage offers, a down payment of 10% or more will likely be standard. Lenders might require greater down payments if your credit score is lower. Also, past instances of missed payments will likely have a negative influence on your ability to borrow and enjoy a lower down payment as well. The typical consensus therefore, is that home buyers who are serious about getting better offers should work on increasing their credit score as much as possible before trying to find a new home to purchase.

The post How Credit Score Influences Down Payment Requirements appeared first on Frank Duran Homes.



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