Millions of Americans dream about home ownership. In fact, home ownership is their number one financial goal. Often, a large number of the potential home owners fail to qualify for that home due to their low credit scores. They wonder if this low score will hold them back forever. Still, if they should find a source to qualify for a mortgage loan, the mortgage interest rates Florida charges are high with the lending company and a portfolio lender might not even consider them. The first step for the potential home owner is to start getting their financial house in order by following the steps provided here.
It is vital for the potential homeowner to realize that their credit score is extremely important. A low credit score should not deter their plans for home ownership. Instead, it should motivate them to strive to improve their credit score. Check your current credit score. First, it is important to note that the average credit score is around 600 to 700. A low credit score is anything that is below 600. Credit Scores range from about 300 to 850, depending on the source. If your credit score is hovering around 500 or lower, that is considered extremely low and you have some work to do to bring up that score.
Improving Credit Score
Perhaps, your score is on the low side. The fact is that there are steps that you can take now to improve your credit score and start saving for a down-payment on your dream house. The first step is to start paying off your credit cards and eliminating most of your outstanding debt. It is also vital to keep a steady job and income. Make sure that you are not overextended financially because the mortgage lending company will hold this in consideration too.
Qualifying For Mortgage Loans
It is also important to note that there are a few programs that accept people with low credit scores. For example, if your credit score is around 580, you might qualify for an FHA loan with a low down payment. Still, it is important to note that you might have to search around for a lender that will accept this type of low score. Searching for a lender that will accept such a low score will probably take a large chunk out of your time. Therefore, it might be a wise choice to work with a mortgage banker that will work closely with their client to help them find a source for a loan. Those that decide to look for a loan without the help of a professional mortgage broker, risk settling for a high interest loan higher than current mortgage interest rates Florida providers.
Handling Interest Rates
Certainly, it is a guarantee that without the help of a professional mortgage broker, you might have to settle for much higher interest rates. At this point, you must decide if you are really ready to take the risk with a higher interest rate or wait a bit longer before settling on a mortgage loan company. Perhaps, you work diligently and find a loan source on your own. Since, your credit score is low, you will probably pay very high interest along with a high down payment. The best course of action is to find a source that will guide you through the entire process and help you to find a source that will provide a loan to someone with a low credit score. The fact is that there are sources out in the real world that provide low interest loans without requiring a down payment, to people with low credit scores. This fact is just one of the many things that you should know about low credit scores.