Buying a house is one of the biggest financial decisions that you will ever make, which is why your credit score is so important. While credit card debt may affect your ability to buy a house, it will not make it impossible. Make sure that you know the answer to these common questions about credit card debt and mortgage rates to ensure that you are able to move into the home of your dreams.
- Will your credit card balance affect your mortgage loan rate? The short answer is yes. Depending which mortgage lender that you choose to work with, they will want to know if you have the funds necessary to pay off your credit card debt. If you do not, you may have to deal with a much higher mortgage rate. Keep in mind that your lender will take a second look at your credit score in the final stages of your loan approval, so do not make any large purchases until you have closed on the house.
- Will no credit affect mortgage opportunities? While there are ways that you can secure a mortgage without any credit, it can be much more difficult. You have the opportunity to apply for an FHA loan, which is a government backed mortgage and is designed for low income, first time homebuyers. These types of loans come with loads of paperwork and higher down payments.
- How can you pay off your credit card debt? While there is no right way to pay off your debt, there are many steps that you can take to help lower it. Paying more than the minimum payments and controlling your spending can help to lower your debt. You may also want to consider transferring your debt from high interest cards to low interest cards.
For all of your Chino Hills real estate needs and to ensure that you can move into the right house for your needs, contact John & Michelle.