Do You Know Your FICO Score? Why It Matters When Buying a Home

know your FICO Score before buying a houseIf you are thinking of buying a house in Alpharetta or Woodstock, it’s important to understand the financial requirements of buying a home. One of those important financial matters is your FICO Score. This is the score your bank will use to determine the factors of your mortgage loan, including terms, conditions, and the actual loan amount. So how is this score calculated? There are 5 categories:

Payment history– Your track record for paying off credit cards, loans, mortgages, and other financial obligations accounts for 35% of your FICO Score. This category also includes your history of bankruptcy and collections.

Debt- 30% of your score is based on the amounts you owe, what type of debts they are, and how many debts you have. The amount of your available credit line you have used in the past comes into play, as well as the amount of principal you still owe on your other loans.

Length of credit history- Your credit account types and activity combined with the amount of time your credit accounts have been open, make up 15% of your FICO Score.

New credit- Lenders will want to check the number of recent credit inquiries in your name, as well as whether or not you are trying to re-establish good credit after a history of late payments or other financial problems. This is weighted as 10% of your score.

Types of credit lines- Another 10% of your score comes from the number and types of credit you’ve used, from credit cards and installment loans to mortgages and retail store accounts.

If you are looking for homes for sale in Alpharetta, Woodstock, and other local areas, contact The Premier Group today. Our experienced team of Realtors can help you find the right home to fit your family. 

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