If you are thinking about buying a home in Franklin TN and obtaining a mortgage, your credit score matters. Your credit score is a very important number that should be taken seriously because it basically affects everything from your credit card interest rates to terms you are offered for a mortgage from a lender.
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Credit scores are based on the information in your credit report and are a combination of several factors. When obtaining a mortgage loan to purchase a Franklin TN home, the most influential determinant of your mortgage rate is your credit score.
The Higher Your Credit Score - The Better Your Mortgage Rate
A high credit score is vital in obtaining a low mortgage rate - and it also influences whether you can get a home loan at all.
Franklin TN home buyers with a FICO score below 620 will have a more difficult time securing a mortgage. It's not out of the realm of possibility, but it will require some foot work and diggging.
With a credit score of 740 or more, you should qualify for the best mortgage rates from most lenders. Depending on the lender, the mortgage rates offered to the highest and lowest credit tiers can vary as much as a full percentage point and a half.
Typical Credit Score Breakdown
- 35% Payment History: Making on-time payments is the best way to maintain and even imporve your credit score
- 30% Amount Owed: It is best to keep balances low on credit cards and other "revolving credit."
- 15% Length of Credit History: A long, responsible history of credit is helpful to your credit score.
- 10% Types of Credit: A variety in the types of positve credit positively affects your score such as mortgage loans, consumer finance, installments, and revolving credit.
- 10% New Credit: Opening several new accounts in a short period of time can negatively affect your credit score.
Lenders prefer borrowers with low balances, a long history of on-time payments and a mix of credit usage like a car loan and a couple of revolving accounts, such as credit cards.
Give us a call and we will put you in touch with one of our highly-qualified, preferred lenders. Get pre-approved for a mortgage today! 615.438.4941
If you are planning on buying a home in Franklin TN soon and need a mortgage loan, try not to apply for several new lines of credit in a short period of time. Multiple new accounts can have a negative impact on your credit score - and ultimately affect your home loan interest rate for the worst.
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Whether you are ready to buy a home in Franklin TN, sell your existing home, or invest in Nashville area real estate, our team of experienced real estate professionals will work relentlessly to make sure your experience is a positive and rewarding one!
We look forward to helping you achieve your Greater Nashville area real estate goals. Give us a call or send us an email today!
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RE/MAX Fine Homes
1624 Westgate Circle Suite 125
Brentwood, Tn 37027
Cell: (Direct) 615.438.4941