First Time Home Buying Simplified Episode 3

Episode 3

Hey everybody, I’m Scott Digregorio, your mortgage guy. In today’s episode, I want to talk about credit as a first-time homebuyer. People think they need perfect credit which isn’t the case – I find it funny, I get both ends of the spectrum, one end of the spectrum with people who think they need perfect credit. While the people on the other side of the spectrum who think credit is not a factor at all.   of which are the case. All of it depends on loan programs, FHA has the most flexible, for more information on that, I have a video posted on FHA credit scores; feel free to watch that!

At any rate, here’s what we look at. Of course, every situation is unique so there’s some wiggle room when discussing these issues. However, you need to have established some form of credit. You would have, at the very leased established credit. Established credit is usually having three accounts opened and active for twelve months.

It’s important to pay close attention to credit card balances. If your credit card balance is what we call a “Utilization Ratio,” it usually means your balance is more than 20%-30% of the credit limit, this is just percentage, the dollar amount doesn’t matter here– this utilization ratio could really start to tank your score.

It’s important to not have any late payments in the last twelve months. Generally speaking, you’re keeping your debt load reasonable and you’re paying your bills on time, it’s a good idea to keep in mind that you don’t need perfect credit but you do need pretty decent credit. The types of credit scores to aim for are anything between 580 and 620. 

If there are any more questions, do check out my credit video on the FHA series because it gives a lot more details in that regard. And obviously the better your credit, the better the interest rate. The interest rate doesn’t move your payment a whole lot, but it is a factor.

I’d love to talk to you about your specific situation. Reach out to me and we could chat on the phone, (239)-910-6040. There’s a lot more room to give more detail over the phone.

Thanks for reading. I’m Scott Digregorio. I’m a Primary Residential Mortgage. I’m your Mortgage Guy. I look forward to seeing you soon. Take Care.