First Time Home Buyers: About 65% of Americans own their own home. If you are in the 35% who do not own a home, you should be aware of the options available to you and how your credit score affects the sales price you qualify for a home purchase. 

Your credit score really affects your ability to purchase a home in many ways. First, it will determine which programs you can qualify for and which you cannot. For example, a homebuyer with a score below 620 may only have one option –an FHA (Federal Housing Administration) loan. Other conventional and non-traditional loans have very specific minimum credit score requirements. Second, your credit score will affect the down payment you need. A 580-credit score might be ok for an FHA loan, but the required down payment may change from 3.5% to 10%.    A 620 score may be enough for you to qualify for a conventional loan with 20% down but may not work for a conventional loan with a lower down payment.   Third, your credit score affects the interest rate you get. The higher the credit score, the better the rate (in theory) and the lower the rate, the lower the payment and the higher the sales price you qualify for.  

• Excellent Credit Score (above 720): Borrowers with excellent credit scores usually receive the lowest interest rates available. Lenders view these individuals as very low-risk borrowers who are highly likely to repay their loans. 
• Good Credit Score (680-720): Borrowers with good credit scores also qualify for relatively low-interest rates, though they might be slightly higher than those offered to individuals with excellent credit scores. 
• Fair Credit Score (620-680): Individuals with fair credit scores may still qualify for loans, but they tend to receive higher interest rates than those with higher scores. Lenders consider them to have a moderate risk of default. 
• Poor Credit Score (below 620): Borrowers with poor credit scores often face the highest interest rates or may struggle to qualify for loans altogether. Lenders see them as high-risk borrowers with a greater chance of default. 

If you are considering a home purchase in the future, work on improving your credit score now! Need help?  You can create an account and provide your basic info at www.applywithRenee.com  and Renee will obtain your 3-bureau credit report for you and help you to make a plan to improve your credit profile and credit score.   Take the first step in writing your next chapter!