Buying one of the Nashua NH homes for sale is considered a major turning point, since it’s more of an investment rather than a luxury. You will have to take lots of factors into consideration to make an informed and wise decision, especially if you have a limited budget to work with. There are several factors that can affect your financial capacity to buy a new home, and your credit score is one of them. This is what will allow you to secure a mortgage and prepare yourself financially.
Lenders usually favor a FICO score of 720, but a rating of above 580 may still be enough for an FHA (Federal Housing Association) loan. If you’re worried that your credit score would hinder you from buying that house of your dreams, rest assured there are ways to improve and prepare it for lenders to seriously consider your application.
Review Your Credit Score Early
Checking your credit report several months before getting a mortgage will give you time to fix any problems you may spot. Those who are sure they pay their bills on time are advised to take a look at their credit score three months before applying for a mortgage.
On the other hand, those with late payments and bad remarks may want to get their credit report six to nine months in advance. This would give them enough time to clean up their records.
Dispute Inaccurate Entries
This is for people who find errors in their credit reports. Such errors include unpaid items that were actually paid or an active account showing up in your record but isn’t really yours. When this happens, you have to file a dispute with the credit reporting agency immediately.
Leaving them uncontested may give lenders a reason to reject your application. Keep in mind that errors in your credit report may hamper your plans of getting your own house, and reports show that credit records usually contain at least one “potentially material” mistake.
Keep Several Tradelines Open
Tradelines are a combination of accounts such as credit cards, car loans, and student loans you’re handling within the past one or two years. When you’re applying for conventional loans, you need at least three tradelines to qualify.
Fewer tradelines may block you from getting a mortgage, so if you need to, open a new one. Experts suggest major credit cards like a Mastercard or a Visa to boost your chances. Open that account more than six months before filing a mortgage application and don’t forget to use it for items you’d buy.
Don’t Close Old Credit Lines
Even if you’re no longer using some of your old credit lines, it’s best to leave them open. Those good accounts can increase your credit score as they show you can handle financial obligations. You may also want to use them every now and then and pay on time to keep them positively active.
While having several credit lines can be a good thing, you have to avoid opening new ones six months before getting a mortgage. This can raise a sense of uncertainty since the credit bureau may wonder how you would shoulder that new account. It can lower your score. So, even if you’re tempted to open a new line to get that discount from a store, think about how it may affect your credit record.
Available Nashua NH homes for sale won’t easily run out. You can definitely find the home that matches your needs and wants with the help of reliable exclusive buyer’s agents. However, the challenge is being prepared to take on this major financial responsibility. That’s why improving your credit score is a must. You can also ask your exclusive buyer’s agent for advice on how to keep a good credit rating to close that deal on the most favorable terms possible.
Give us a call at Buyer’s Option Realty Services for a no-obligation consultation if you’re thinking about buying one of the Nashua NH homes for sale. 603-881-3800.