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Credit Scores...What To Know?






If you’re thinking about buying a home, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from Bankrate explains:


“Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”

This means your credit score may feel even more important to your homebuying plans right now since mortgage rates are a key factor in affordability, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 765. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider explains generally how your FICO score range can make an impact:


“. . . you don't need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you're wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).”

Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO says:


“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single "cutoff score" used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”

If you’re looking for ways to improve your score, Experian highlights some things you may want to focus on:


  • Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.

  • Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.

  • Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.


When you’re ready to start the homebuying process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.


Bottom Line


With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, let’s connect.



 

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What is the Market Doing?


 

Escambia County


Escambia

Month

Closed Sales

% Change Year Over Year

May 2023

501

-14.1

April 2023

​415

-20.5

March 2023

463

-18.1

Feb 2023

345

-22.6

Jan 2023

304

-28.0

Dec 2022

375

-31.7

Nov 2022

321

-31.1%

Oct 2022

438

-15.8%

​Sep 2022

459

-13.1

Aug 2022

518

-2.1%

Jul 2022

505

-9.8%

Jun 2022

592

-3.6%

May 2022

583

16.8%

Apr 2022

522

0.2%

Mar 2022

565

2.5%

Feb 2022

446

14.4%

Information from Florida Realtors

 

Santa Rosa County







Santa Rosa County

Month

Closed Sales

% Change Year Over Year

May 2023

437

-2.2

April 2023

331

-21.4

​March 2023

404

-12.2

Feb 2023

257

-35.8

Jan 2023

228

-27.2%

Dec 2022

330

-30.2%

Nov 2022

281

-31.3%

Oct 2022

331

-34.5%

Sep 2022

373

-20.1%

Aug 2022

427

-15.3%

Jul 2022

410

-20.1%

Jun 2022

492

-11.5%

May 2022

447

-4.1%

Apr 2022

421

-7.9%

Mar 2022

460

-0.4%

Feb 2022

400

9.6%

Information from Florida Realtors

 


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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Skip Geiser LLC. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Skip Geiser LLC. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.


 

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