8 Ideas for a New Home Gift
As you begin the exciting path to homeownership, you probably have questions about the financing process. There can be a lot of overwhelming advice and information to digest about qualifying for a home loan and credit scores, but we are here to help make it much easier.
M/I Financial (MIF) Loan Officer Elizabeth Staff shares her top advice for first-time homeowners to check their credit score for a home loan.
What Credit Score Do You Need for a Home Loan?
The minimum credit score is 620. There are select programs that may approve a buyer with a lower score; however, 620 is considered minimum.
What Is a Good Credit Score for a First-Time Home Loan?
In order to receive best pricing for a mortgage, your middle score should be 740 or above.
This is not a requirement, but having the top tier helps Loan Officers offer the best rates available for your first-time home purchasing scenario.
Does Applying for a Home Loan Affect Your Credit Score?
Applying for a home loan may slightly impact your credit score temporarily. As you continue to make your payments on time, and keep your credit card balances low, the score can recover quick.
The benefits for becoming pre-qualified for a mortgage outweigh the small impact to the score (if any!).
How Can I Improve My Credit Score Before I Buy a Home?
Improving credit scores can be tricky and take some time to see the results. A couple tips to help improve your credit score are below:
- Work with M/I Homes’ credit repair department, Welcome Home Club. Have your Loan Officer connect you to your Welcome Home Club representative to assist you in increasing your credit score by planning out exactly what do with your credit. Many M/I homebuyers use Welcome Home Club to help make sure their credit score hits the top tier!
- Check your credit report for any errors. Some errors may include loans that have already been paid off still showing a balance and accounts that don’t belong to you.
- Make payments on time. 35% of your credit score is determined by payment history. Making your payments on time for multiple months in a row can show strong credit history.
- Keep high-balance accounts to a minimum. Over-utilization of credit lines may hurt your credit score. Try to keep your balances to an amount that comfortable with paying off.
Before you know it you’ll be one step closer to finding your dream home with these easy credit score tips.
Still have questions for us? MIF is willing to help however we can to put your mind at ease about financing—drop us a note!
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