Credit Score and Your Mortgage
Generally speaking, the higher your credit rating is the lower your interest rate will be, and the lower your monthly payment will be.
Credit Score Basics
A person usually has 3 different credit scores provided by each of 3 different credit bureaus. The middle score is the “mid score”.
Credit ranges are:
- Over 720 is excellent
- 680-720 very good
- 620-679 good
- 500-619 – sub chief
- Less than 500 – very sub chief
Lenders usually have specific interest rates offered for people with different ranges of credit scores and loan programs.
Factors That Help You
If your character has a lot of equity in a refinance or you are putting down a large down payment on a buy the lender rates will generally enhance.
There are three basic ways to document your background in a mortgage application: complete documentation, stated documentation, and no documentation. complete documentation involves disclosing your income, asset, and employment information. Stated documentation involves less documentation than this, and no documentation is a minimum level of documentation. If you can provide complete documentation you should do this as it helps get you a better interest rate.
Some lenders will allow you do use a non-resident co-borrower on your application. This is adding someone to the loan who is not living in the character. This is usually done to because the additional person has a higher credit score or income needed to get the loan.