Unless your a cash buyer, your credit will affect your ability to purchase a home. Your credit will determine the type of loan, down payment that is needed, and your interest rate.
What do the banks looks at:
Your credit history-paying your bills on time and paying more than the minimal amount due will positively affect your credit score. If you are paying the minimal, maxed out your credit cards, and have had late payments your credit score will be lower adversely affecting your credit score.
Debt to Income Ratio- banks will reviewing your debt to income ratio. If your ratios are high this will affect the amount of money the bank will be willing to loan. To qualify for more might mean paying off some outstanding debt that you incurred.
Job History-Banks will be reviewing your work history, checking current job position, how long have you been employed(over 2 years is ideal), if you have recently started a new position is it the same type of field that you were working in. If your thinking about a 2nd job to help purchase a home, most lenders want to see that you have been at the 2nd job two years, before they will even consider the income.
Once you are approved its very important to stay current on payments and not purchase any big ticket items. The above mentioned would negatively affect your credit score and could delay purchasing a home by several weeks to several years, depending on different scenarios.
It is suggested that you check your credit report before proceeding with a home purchase. This will give you time to to fix any issues that might arise.
Are you looking to purchase a home? Town and Village Realty offers services to both home buyers and sellers.
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