What To Know About Credit Scores Before Buying a KC Home

Are you a homebuyer looking in the Kansas City area? When qualifying for a mortgage, your credit score is a critical piece of the puzzle. Kansas City lenders examine your credit to see if you make timely payments, pay back debts, and more, which means your credit score can help determine your mortgage rate. An article from US Bank explains:

"A credit score isn't the only deciding factor on your mortgage application, but it's a significant one. So, when you're house shopping, it's important to know where your credit stands and how to use it to get the best mortgage rate possible."

Since mortgage rates are a primary factor in affordability, your credit score could be of even greater importance to your homebuying plans in the current KC housing market. The Federal Reserve Bank of New York reports the national median credit score for those taking out a mortgage as 770, but this doesn't mean your credit score has to be perfect. As the same article from US Bank explains:

"Your credit score (commonly called a FICO Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don't need that score or above to buy a home."

As you begin your homebuying journey, learning more about how your credit score could factor into the home loan and mortgage rate you can receive is vital. The Just Say Home team can assist you in this process with valuable real estate expertise and will connect you with a trusted Kansas City 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."

Do you still have some time before you buy a Kansas City home? There are several ways you can improve your credit score while you wait! Experian highlights some financial factors you should focus on:

Payment History: Since late payments can negatively impact and drop your score, making payments on time and quickly paying any existing late charges is crucial.

Debt Amount (relative to your credit limits): The less available credit amount you use, the better. Keep this number as low as possible to increase your score.

Credit Applications: Don't apply for additional credit when buying new appliances, furniture, or other items. Applying for new credit can result in a hard inquiry that will drop your score.

Bottom Line

If you're looking to buy a home in the Kansas City area, improving your credit score is one of the many ways to get a lower mortgage rate. The Just Say Home KC real estate agents have the knowledge, expertise, and local connections to help you improve your credit score, find a trusted KC lender, and discover your perfect (and affordable) Kansas City home!

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