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Your Credit Score Might Not Be a Deal Breaker When I Comes to Qualifying for a Home Mortgage


Qualifying for a home mortgage loan is only the first step toward being able to afford to buy a house.  Likewise, the amount you borrow is only one of many factors that affect how much you will pay for your mortgage in total.  Lenders will not agree to lend unless they are sure that you will be able to keep up with the monthly payments all the way until the mortgage is repaid in full.  If that sounds scary to you, think about whether you can afford to keep up with the payments for the next five years, at which time you can reassess your financial situation and decide whether to keep making payments on your current mortgage, refinance it, or sell the house.  If your financial situation has improved to the point where home ownership no longer feels like a distant dream, but you want to make a wise decision about taking out a home mortgage loan, contact a Philadelphia debt relief lawyer.

Qualifying for a Home Mortgage Loan When Your Credit Score Is Less Than 700

How high does your credit score have to be for you to have a chance at qualifying for a home mortgage?  Some real estate agents will tell you to get lost unless your credit score is above 725, or perhaps even 750, but those are the real estate agents who sell mansions and luxury condominiums in the most expensive areas of Philadelphia.  It is possible to qualify for a home mortgage as long as your credit score is at least 670.  You will not be able to borrow enough to purchase a million-dollar house, but you may be able to afford a fixer upper or a condo that has just enough bedrooms for the number of people in your household.

With mortgages as with other kinds of loans, your credit score affects your interest rate.  When you consider that a home mortgage loan requires you to pay compound interest over the 30-year term of the loan, then even a small difference in interest rate affects how much the loan will cost you over time.  The difference it makes in each monthly payment is only a few dollars, though.  Compared to renting, homeownership is a financially sound choice.  If your credit score is good but not great, buy the condo you can afford at the mortgage interest rate you can get and focus on improving your financial situation.  Pay down the mortgage principal more than the monthly payments require.  Boost your credit score.  In a few years, you may be able to refinance for a lower interest rate.

Contact Louis S. Schwartz About Debt Relief With a Purpose

A Philadelphia consumer law attorney can help you think realistically about your debts so you can focus on your financial goals.  Contact Louis S. Schwartz at CONSUMERLAWPA.com to set up a free, confidential consultation.



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