Question 1

What specific credit score do I need to qualify for a mortgage loan?

Accepted Answer

Different loan types (e.g., FHA, Conventional, VA) have varying minimum credit score requirements, and a higher score generally secures a better interest rate.

Question 2

How can I obtain and review my full credit report for errors?

Accepted Answer

You are entitled to a free copy of your credit report annually from each of the three major bureaus via AnnualCreditReport.com. Reviewing it carefully allows you to dispute any inaccuracies, which is a key first step in the repair process.

Question 3

What is my current credit utilization ratio, and how can I lower it?

Accepted Answer

Your credit utilization ratio (how much credit you use versus your total available credit) significantly impacts your score. Aim to keep this ratio below 30% to appear as a responsible borrower to lenders.

Question 4

How long does negative information, like a bankruptcy or late payment, stay on my report, and how ca

Accepted Answer

ost negative items remain on your report for up to seven years, while bankruptcies can last 10 years. Consistently establishing a history of positive, on-time payments is the best way to offset past issues.

Question 5

Should I open new credit accounts or close old ones during the rebuilding process?

Accepted Answer

Generally, avoid opening multiple new accounts in a short period (which results in hard inquiries) or closing old, unused accounts (which reduces your total available credit and shortens your credit history)

Question 6

How much can I realistically afford for a total monthly mortgage payment, including PITI

Accepted Answer

Lenders use your debt-to-income (DTI) ratio to assess affordability, typically preferring it below 36%–43%. It is essential to budget for all associated costs beyond the principal and interest.

Question 7

What types of mortgages are available for my situation, and do I qualify for any first-time homebuye

Accepted Answer

Options like FHA, VA, USDA, and conventional loans offer different benefits, such as lower down payment requirements. Inquire about specific down payment assistance programs, as these can provide needed funds.

Question 8

How much money will I need for a down payment and closing costs?

Accepted Answer

Down payments can range from 0% (for VA or USDA loans) to 20% or more. Closing costs typically run between 2% to 5% of the home's purchase price and need to be budgeted for separately from the down payment.

Question 9

What is the difference between pre-qualification and pre-approval, and which one should I secure 1st

Accepted Answer

Prequalification offers an estimate of what you might borrow, while pre-approval involves a formal review of your finances and credit to determine a specific loan amount, which is necessary before making an offer on a home.

Question 10

What financial moves should I avoid during the mortgage application and closing process?

Accepted Answer

Once you begin the process, avoid major financial changes such as applying for new credit, making large cash deposits without documentation, changing jobs, or buying a new car or furniture on credit, as these can jeopardize your loan approval.

From Credit to Keys The Wealth Building Blueprint

Overview

From Credit to Keys: The Wealth Building Blueprint

Lineup

Good to know

Location

Frequently asked questions

Organized by

Joe Phillips Realtor

Related to this event