Buying a home with credit issues can be something of an uphill battle. Lenders prefer applicants with good credit scores of 700 or higher. Although getting approved with a credit score of 680 is possible, individuals can anticipate paying high-interest rates and processing fees. Paying more out-of-pocket tends to add to the financial strains of everyday people already dealing with credit issues. That’s why JAAG Properties offers a Rent to Home Solution to help repair credit scores, and credit educational resources.
It’s important to remember that the major credit reporting bureaus keep track of your financial transactions and repayment history.
Your credit cards, utility bills, and personal loan payments count toward 35 percent of your credit score. Making all these payments on time maximizes this aspect of your credit score potential.
Outstanding balances are used to determine 30 percent of your credit score. A good credit score is driven by keeping your credit utilization below 30 percent.
Lenders take a long look at mortgage applicants’ debt service ratio. It’s calculated by tallying monthly housing costs and dividing that figure by your average income. People with good credit usually keep their debt under 40 percent.
The credit reporting bureaus look favorably on maintaining a variety of accounts over time. By paying off balances and not canceling accounts such as credit cards, credit scores generally go up.
Big banks tend to lump people together by their credit scores. Applicants with scores ranging from 700 to 900 can expect an easier approval process than those at 699 or lower. Scores between 650 and 699 are only viewed as fair, and borrowers may not have access to desirable loan products.
If credit issues cause your score to fall below 650, reputable lenders are inclined to deny mortgages. Those who approve bad credit mortgages usually charge exorbitant interest rates and excessive fees. One of the best ways to improve your financial health and wellness is getting a sound credit education and making on-time payments consistently.
JAAG offers a variety of ways to help individuals improve credit scores and turn their financial situation around. Our Rent to Home Solution provides an opportunity to make on-time payments and demonstrate creditworthiness. The JAAG team can also connect you with a Certified Financial Planner, who coaches you through monthly budgeting, long-term planning and provides the credit education necessary to successfully get approved for a mortgage.
If you’re struggling with a low credit score and want to get approved for a home loan, JAAG can help. We offer free credit repair and educational resources designed to help you realize the dream of homeownership. Contact JAAG today, and let’s get the process started.