Why You Need A Good Credit Score To Buy A Home

Your credit score is a 3 digit number that can have a huge impact on many things that you hope to accomplish in your life. One of the biggest reasons that you need a good credit score is for buying a home. As many people rely on credit cards to fund their expenses, they consequently end up in debt. This doesn’t have a favorable impact on credit scores. Yet, it’s so important to maintain good credit.  

Why The Score Is Important

A credit score is one of the most crucial factors in determining if you can qualify for a mortgage. It is an overall gauge for lenders to understand how financially responsible you are. The higher your credit score, the less risk you carry in the eyes of lenders. 

What Affects A Credit Score?

Your credit score is calculated based on information that is found on your credit report. There are five different things that affect your credit score, each with a slightly different impact:

  • Payment history
  • Debt-to-credit utilization
  • Length of credit history
  • Credit mix
  • New credit

What’s A Good Score?

Absolutely flawless credit is 850. Don’t worry if you’re not in that category. Only about 1/2 of one percent of consumers actually have a score this high. Once your score reaches 740 and above, you’re able to qualify for the best in mortgage rates. Even if your score is in the low 700’s, you still should be able to qualify for a good interest rate. For a conventional loan, many lenders look for a credit score of 620 and above. Being in the high 600s will help you to avoid the need for additional paperwork. You’ll also get a decent interest rate with this score. 

What If You Don’t Have Credit History?

Ideally, you would have opened some type of a credit card by the time you reached the age of 20. This would help to establish credit. If you don’t have any type of credit history, there’s still a few ways that you can qualify for a mortgage. In these cases, lenders will often use alternative sources in order to determine the reliability of a party they’re lending to. Your car payment history doesn’t show up on your credit report, but a good track record helps lenders to see that you’re dependable and a responsible credit user. 

What About Bad Credit?

From missed payments to errors on your credit report, there could always be some problems with a credit score. The good news is that bad credit can be fixed. There are even loan programs designed to help people with less than perfect credit scores. Generally FHA (Federal Housing Administration) loans and VA loans allow for low down payments and have lenient credit score requirement. 

Fixing Your Credit Score Is Fixing Your Habits

In order to repair your credit score, you’re going to need to fix the bad financial habits that got you into the situation in the first place. This means making on-time payments, spending less, and avoiding opening up any new accounts. Pay down your existing debt and try to make a fresh start form there. Also, be sure that you obtain a free copy of your credit report each year to keep on top of any errors that might be present on the report.

Open house on 10/15/2017 at 1 Delano Park Boston, MA 02131


Date: 10/15/2017 Time: 12:00 PM to 2:00 PM  
For Directions: feel free to contact me.  
For more information: click here for the full details  

Deluxe Craftsmanship shows in the restoration of this 1800’s Queen Anne Beauty! Luxurious bi-level living with much attention to detail with 3bedroom, 3full baths. Open floor plan with jacobean hardwood floors makes for great entertaining along with surround sound through out the unit, sound deadening system in place too! White timeless kitchen with soft close cabinetry dressed with quartz counters, SS appliances with apron sink, slider out to composite deck includes speakers to sound system. 2 master en suites the choice is yours! main level master on suite with beautiful carrera marble, seamless glass doors and ample size walk-in closet. 2nd master on suite occupies the 2nd level with natural stone shower, pebbled flooring, seamless glass doors, sun-dreached with skylights, private tree top office in turret. Carrier HE Heat/AC, exclusive outdoor space with designated shed, basement storage, off street parking, Walk to Village, T & Rail. Call for your private tour

Smaller Home Space, Big Life Transition

Renting a studio apartment is a great way to save for a down payment on a new house. Studio apartment living has additional benefits that you might want to take advantage of. But, first you may have to get accustomed to living in a smaller space.

Making the shift

If you’re transitioning from living in a college dorm to a studio apartment, the size adjustment should be simple. In fact, you may hardly notice the change. Moving into a studio apartment from a full size house is another story.

The average size of a studio apartment depends on where the apartment is located. In New York, the average size of a studio apartment is about 550 square feet. In Chicago, a studio apartment runs between 400 to 500 square feet. A studio apartment can be less than 400 square feet in other cities. Location also has a significant impact on the monthly rent that you’d pay for a studio apartment.

Ways that you can save by living in a studio apartment

Using New York as an example, you could pay more than $2,300 for a 550 square foot studio apartment in a hot spot like Manhattan. Shop around. Don’t assume that because the unit is small that the rent will also be small. Wherever you rent, you should pay less than you would pay for a standard one or two bedroom apartment.

Although a studio apartment is small, there’s enough room to fit a sofa bed, one tall dresser, a television stand and a television and a stereo. The apartment probably won’t have a kitchen. Pay attention to the layout. You’ll get more for your money if the layout is completely open except for the bathroom. More ways to save while renting a studio apartment include:

  • Buy food that doesn’t require cooking.Fortunately, a lot of healthy foods do not have to be cooked, so this could motivate you to develop a more healthy diet. Avoid eating out to save on food expenses.
  • Wear clothes that are a part of your current wardrobe. To save on space, you won’t be able to buy lots of clothes and shoes,another motive to save money for a down payment on a new house.
  • Get outdoors. Hang out with family and friends at great outdoor spots like free outdoor concerts, sports competitions and outdoor festivals and cultural events. Being outdoors can keep you from feeling like you’re confined to a small space.
  • Take advantage of living in a smaller space to focus on your career. You could use the time that you spend at your studio apartment, to start a business. Put a portion of these earnings toward your down payment.
  • Get exercise. Instead of taking the bus or train to work, if you live close enough, bike or walk to and from work. Deposit the money that you save on transportation toward your down payment.

Starting small could yield big results, especially as it relates to buying a house. If you rent a studio apartment at a reasonable price, you could use the money that you save on the difference in the rent versus what you would pay for a one or two bedroom apartment or a condo as a down payment on a new house. Rent a studio apartment and you could also adjust to living on your own for the first time, especially if you’re a recent high school or college graduate.