For first time home-buyers, what type of credit score would you need to get approved for a home loan?

Question

scenario: $250,000 loan for a $185,000 loft, with a decent interest rate.

Answer 1

For buying a house Credit History is much more important than credit score. Often, the lack of credit history is equated with bad credit. You should be aware that lenders will go through your credit report once you apply for loan for buying a house. Therefore you should polish your credit report. Anyway, in order to establish a good credit history and at the same time risen your credit score in a short time do following things:

1) Close all of your credit cards but one. It reflects in your credit report and it is a very good sign. For instance say that you have 5 credit cards with $1000 credit limit for each. Therefore you are responsible for $5000 of possible debt. But when you close 4 of them, now you are only responsible for $1000 of debt which lowers the level of risk of lending money to you.

2) If you have any loan, like car loan or any balance on your credit cards, try to pay more than your monthly payment for 6 months or something. I mean say your monthly due on your car loan is $150, try to pay $250 each month. Lenders can see these trends in your credit report and they see that you’re a responsible borrower.
If you don’t have such loans, I suggest getting a $3000-$4000 loan and paying it off in full in 5-6 months. You might pay $200-$300 of interest but you will save thousands of dollars in your home mortgage and interest rates.

Also checkout http://www.howtoestablishgoodcredit.com/Credit_Articles/index.php
There are lots of articles there, related to your question, which you can find useful to boost your credit.

Answer 2

Was that a misprint? Because you cant get a loan for more then the value of the house.

Assuming you meant 150k loan for 185k loft... .There is no exact number, but normally I would say mid 500's would be the low end of getting approved. Very high interest rates would apply to most people under 600 though. Your income could play a role in this as well.

Answer 3

call a financial business enterprise and make an appointment. notice that htey will use an usual of your final 2 years of stable earnings. On credit playing cards. determine you're paying in finished each and each month. No video games. shop utilization very low to be qualify. think of a tank or 2 of gas a month. Oh I choose you would be able to desire to attend a on an identical time as. in the event that they could use your 50K earnings (2 good years) you would be able to desire to get something plenty nicer. could desire to you employ that element to save up a 20% down charge so which you do not could desire to pay that nasty PMI? this could value 1000's greater advantageous a 300 and sixty 5 days. not tax deductible, and does not go in direction of pastime or crucial.

Answer 4

Most people can get a mortgage from somewhere, because they figure we all need a place to live, but your credit score will determine how good or how high your interest rate will be. The lower your credit score, the more you will pay in interest.

Answer 5

First you won't get a loan for more than the property is worth. Banks send out their own apraisers to check on the value. 2nd your interest rate depens on your credi score, the lower your credit score, the higher your interest. This can mean a big difference.

Answer 6

A great site for finding info on first time home buyer programs is http://www.mortgageawareness.com