Get Ready To Buy a KC Home by Improving Your Credit Score

Is buying a Kansas City home on your mind as the new year approaches? It’s never too early to begin laying the groundwork, and building a solid credit score is a crucial step in preparing for homeownership. Kansas City lenders review credit to evaluate your ability to make timely payments, pay back debts, and more. This factor also helps determine your mortgage rate. An article from CNBC explains:

“When it comes to mortgages, a higher credit score can save you thousands of dollars in the long run. This is because your credit score directly impacts your mortgage ratewhich determines the amount of interest you’ll pay over the life of the loan.”

In the current KC housing market, mortgage rates are an essential factor in affordability, meaning your credit score is even more important to your homebuying plans. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 770. However, this average doesn’t indicate you need a perfect credit score. An article from Business Insider explains 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).”

The best way to get more information on how your credit score could factor into your home loan and mortgage rate is by working with a trusted KC lender. 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.”

Are you looking for ways to improve your credit score? Experian highlights some factors to focus on:

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

Your Debt Amount (relative to your credit limits): The less available credit amount you use, the better it is. Focus on keeping this number as low as possible.

Credit Applications: Are you looking to buy something? Don’t apply for extra credit, as this could result in a hard inquiry on your credit that decreases your score.

A Kansas City lender will help you navigate the homebuying process from start to finish, from assessing your score range to giving you more specific details for each loan type.

Bottom Line

As you set your sights on purchasing a Kansas City home this upcoming year, focus on strengthening your credit score. This boost can help you get a better mortgage rate when it’s time to buy. Want to learn more about how a solid credit score can help you on your journey to homeownership? The Just Say Home KC Team is well-connected in the KC area with trusted lenders and has the experience to help you achieve your dream!

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