all about credit scores

Our trusted lenders work with all credit situations to help you get into your perfect home. Whether you have excellent credit or are working to improve your score, we have options available to fit your needs and budget. 

 A credit score is a three-digit number that represents your creditworthiness. It’s calculated based on your credit history, which includes your payment habits, the amount of debt you have, the length of your credit history, and more. Most commonly, credit scores range from 300 to 850, with higher scores indicating a better credit profile. 

• Excellent (750-850): Borrowers are likely to receive the best interest rates and terms.
• Good (700-749): Eligible for favorable loan terms.
• Fair (650-699): Might qualify for loans but with higher interest rates.
• Poor (600-649): Limited loan options and higher rates; lenders see higher risk.
• Very Poor (Below 600): Difficulty securing loans, may require co-signers or larger down payments.

Loan Approval:
Lenders use your credit score to determine your eligibility for a mortgage. Higher scores typically indicate a lower risk for lenders, making you more likely to get approved.

Interest Rates:
Your credit score directly affects the interest rate on your mortgage. A higher score can lead to lower interest rates, which can save you thousands of dollars over the life of the loan.

Down Payment Requirements:
A lower credit score may mean a higher down payment requirement. Lenders may ask for 10-20% down or more to offset the perceived risk.

Loan Programs and Options:
Certain loan programs, such as FHA loans, are more accessible to those with lower credit scores, requiring as little as a 3.5% down payment. VA and USDA loans also offer favorable terms for qualifying buyers with lower credit.

Private Mortgage Insurance (PMI):
For conventional loans, if your down payment is less than 20%, PMI is usually required. Lower credit scores can lead to higher PMI costs, increasing your monthly payment.