Understanding Your Credit Score and How It Affects Your Mortgage

Valentine’s Day is all about love and there’s no better time to fall in love with your credit score. Because when it comes to buying a home, your credit score is one of the most important numbers in your life.

Your credit score influences everything from whether you get approved for a mortgage to the interest rate you’ll pay over the life of your loan. Even a small difference in your rate can mean tens of thousands of dollars over a 30-year mortgage so understanding your score is money well spent.

Lenders typically use your FICO score, which ranges from 300 to 850. For most conventional loans, you’ll want a score of at least 620, though a score of 740 or above will unlock the best rates available. FHA loans, which are popular with first-time buyers in Florida, can be obtained with scores as low as 580 with a 3.5% down payment.

Your score is made up of five key factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit inquiries (10%), and credit mix (10%). The biggest thing you can do to protect your score is simple: pay every bill on time, every time.

One thing I always tell my clients in Sarasota and Manatee is: do not open new credit cards, finance a car, or make any large purchases between pre-approval and closing. New credit inquiries and increased debt can trigger a rescore that changes your loan
terms or even your approval.

If your score needs work, don’t be discouraged. With a targeted plan, many clients see meaningful score improvements in just 60 to 90 days. I’ll help you identify the fastest path to improvement so you can qualify for the best rate possible.

Ready to Get Started?

Want to know where your credit stands and what it means for your mortgage? Reach out to me today for a no-obligation consultation. I’ll review your credit profile and help you build a roadmap to homeownership right here in Sarasota, Manatee, or anywhere in Florida.