The Relationship between Loans in Boca Raton & Credit Scores

 

First-time home buyers should know how crucial credit scores are when it comes to trying to obtain a home loan. Credit is probably one of the most vital components in the mortgage loan approval process. Mortgage lenders like Ace Mortgage Loan Corporation looks at a borrower’s credit score, number of open accounts, payment history, type of credit borrowed, and other factors. What some borrower’s don’t know is that their credit score can be slightly affected when it comes to down payment requirements, loan programs, interest rates, and flexibility on income.

According to Credit.about.com, a credit score is a numerical summary of the information contained in one’s credit report. The credit scores typically range from 300 to 850. The higher the credit score, the better it is to get a home loan. If you have lots of negative information in your credit report, then the credit score will be lower. The six worst credit report entries include judgments, foreclosure, debt collection, charge-offs, tax liens, and bankruptcy. One’s credit score represents their “creditworthiness.” It shows the likelihood of that individual paying off his or her debts. One’s credit is sent typically to three major American credit bureaus: Equifax, Experian, and TransUnion. All of the credit agencies use the Fair Isaac Corporation, also known as FICO, software to generate FICO scores, which are sold to lenders.

This is how the credit scores rank in regards to how mortgage lenders usually see it for people who are applying for home loans:

  • 300-619 is POOR.
  • 620-679 is FAIR.
  • 680-730 is GOOD.
  • 730-850 is EXCELLENT.

Credit needs to be established, and then maintained in order to be able to qualify for a mortgage loan. Credit scores are based on five main factors: payment history, total amounts owed, length of time, type of credit, and new credit. The biggest portion of the credit score relies solely on payment history and amount owned. Mortgage companies want to see just how much history you have with paying your bills on time. People in Boca Raton, FL who have good credit history don’t have many debts and their funds are not being moved around all the time. They have a variety of types of credit. They have a mix of credit cards, installment loans and fixed payments.

If you live in Boca Raton, FL and you are searching for a mortgage loan that fits your budget, you should call Ace Mortgage Loan Corporation. Ace Mortgage Loan Corporation is a mortgage lender that provides quality mortgage services. This mortgage broker can help you check your credit score and determine what the next step is for you in applying for a home loan. Ace Mortgage Loan Corporation has loan experts who can guide you in the right direction. Call them today at (954) 777-4774.

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