Credit Score Considerations for Buying a New Home

Before you start searching for new homes for sale in Winchester, VA; you need to give some thought to your credit score. The days of easy credit are over. It is much tougher now than in years past to get approved for a home mortgage loan. While there are still financing options for those with lower credit scores, the best loan terms and interest rates will go to those with the highest credit scores.

If you have a credit score above 600, it is likely you will be able to get approved for a mortgage loan. The better your credit score, the better interest rate you will be able to obtain for your home mortgage loan. The FHA and VA have less stringent credit criteria than do some conventional lenders, such as banks. While the requirements for credit scores are different among lenders, it is to your advantage to have the best credit score possible when applying for financing with a mortgage lender.

When you try to obtain financing for new homes for sale in Winchester, VA, you should know that lenders look at more than just your credit score to approve you for a home mortgage loan. The credit score is only one factor among many. They will also be looking at your debt to income ratio. The lender needs to know that you are not already overextended on your bills and that you will be able to afford your monthly mortgage notes.

Another factor besides credit scores that will have a bearing on the type of interest rate and financing you are able to be approved for is the amount of money you have to put towards a down payment. While the FHA and VA have low-deposit options (some as little as three to five percent down), other lenders, such as banks, may require a 10 to 20 percent down payment. The amount of money you put down will also affect whether or not you are required to purchase PMI insurance. Typically, if you are paying less than a 20 percent down payment, traditional lenders will require you to purchase PMI insurance. This is an insurance that protects the lender’s interest should you default on your loan payment.

While it is a good idea to make sure you have a good credit score before searching for new homes for sale in Winchester, VA; there are financing options available for those with less than perfect credit. Your real estate broker can probably give you some good advice about the best financing options available for purchasing a new home.

New Homes for Sale Winchester VA To get professional advice about all the considerations for buying new homes for sale in Winchester, VA, schedule a consultation with real estate broker Andy Waldo.

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