SCHUTT LAW FIRM, P.A.
Phone: 239.540.7007
Blog
09/28/2015

Credit Scores and Mortgages

You're ready to buy a home, you've got one all picked out, and now all you need is the mortgage approval.  If you're like most potential homebuyers, you've probably checked your credit score in order to see where you stand.  Now you have a number, but what exactly does it mean?  And how will it affect your mortgage application?

Credit Score Range

A FICO score of 740 or above will probably be good enough to secure the best rates that any lender has to offer.  A score below 620, and some more renting is probably in your future.  Depending on the lender, the mortgage rates offered to the highest and lowest credit tiers can vary as much as a full percentage point and a half.  So every little bit of credit score improvement helps, as each percentage point makes a huge difference.  For example, a $200,000, 30 year fixed mortgage will cost you $954.83 monthly at 4%, but at 5% will jump to $1,073.64.  So, take care of your credit, and you'll soon reap the rewards.

What Factors Contribute to Your Credit Score?

Your FICO credit history explores a number of different aspects of your spending habits.  A higher credit score would mean that you maintain low balances on revolving credit lines, have a history of paying on time, and that your use of credit is fairly diverse, i.e. a mixture of a car loan and a couple of revolving accounts such as credit cards. Other factors that contribute are the outstanding debt relative to the available debt (the lower the better), the length of your credit history, and how many credit inquiries appear on your report (how many times you have pursued new credit lines).

Title Insurance in Fort Myers, FL

If your mortgage has been approved, then congratulations, you've done a good job of maintaining your credit over the years.  The next critical step in finalizing the purchase of your home is obtaining title insurance in Fort Myers.  Buying a home is a substantial investment, and that investment needs to be protected.  Here at Schutt Law we can advise you on how to obtain the proper title insurance policy, what coverages you'll need, and what rights you'll have after signing.  Call us today at (239) 540-7007 and let us guide you through the final steps on the path to homeownership.