The most important thing you can do to get approved for the best possible rate on your mortgage is to raise your credit score.
CREDIT SCORE
4
INTEREST RATE
$2,000
MONTHLY PAYMENT
SAME 30-YR MORTGAGE
Explore the FAQs below to learn more about how Mycreditz may help you
FAQ #1 Qualification
How does my credit score impact my ability to qualify for a home?
Your credit score is one of a few things that will be considered when you apply for a home loan—however, it’s a very important factor. Other things that go into the decision are your income, debt-to-income ratio, and the loan-to-value comparison. The minimum credit score you need depends on the type of mortgage you want.
Below are the most popular types of mortgages.*
* Mycreditz has no involvement with any lender loan or pricing policies, and does not generate loan underwriting recommendations or decisions through its products or services.
FHA Loans
A government-backed mortgage loan where the minimum down payment depends on whether your credit score falls within one of these two ranges.
CREDIT SCORE
580
or higher
DOWN PAYMENT
3.5%
minimum required
AFTER
$647,200
VA Loan
Available only for veterans and and current service members. No down payment is required.
CREDIT SCORE
620
or higher
DOWN PAYMENT
0%
none required
AFTER
$647,200
Conventional Loan
This is the most common type of loan that usually has the lowest interest rates.
CREDIT SCORE
620
or higher
DOWN PAYMENT
3%
minimum required
AFTER
$647,200
Jumbo Loan
If you need to borrow more than $647,200 you may consider a jumbo loan. You will need a credit score of 680 or higher and many lenders also have higher down payment min, often around 20%.
CREDIT SCORE
680
or higher
DOWN PAYMENT
20%
typical minimum
AFTER
>$647,200
FAQ #2 Afford your home
How does my credit score impact the affordability of my home?
Borrowers with better credit scores pay less—period. When you have a high credit score, you’ll very likely receive a lower interest rate.
If you have a 30-year loan, that could save you tens of thousands over the life of the loan. Let’s say you have a $250,000 mortgage with a 5% down payment and a 30-year term.
Here’s how the difference could play out.
4.99% Interest rate
$1,609 Monthly payment
$279,107 Total interest paid
If you have a 660 credit score, your interest rate would likely be about 4.99%, and you’d pay $279,107 in total interest over the life of the loan.
4.375% Interest rate
$1,498 Monthly payment
$239,2287 Total interest paid
If your credit score increased to 740, then your interest rate could fall to about 4.375%, and you’d only pay $239,228 in total interest over the life of the loan.
Savings per month
$111monthly
Savings over the life of the loan
$39,879*
FAQ #3 Different Scores
My credit score already looks good. Why should I do anything?
Credit scores seem like they are everywhere these days. Your bank or credit card company likely updates you on your credit score and there are many free sites that allow you to track your score.
But what most don’t understand is that the scores you get from your bank, or a free site are NOT the same scores your mortgage lender uses to determine whether you qualify. In fact, most find that the score they have been tracking is higher than the score their mortgage lender relies on. Regardless of what scores you have been tracking, the steps we provide could help applicants increase their scores when it actually matters– saving thousands of dollars over the life of the loan.
FAQ #5 Data-driven Plans
Improving my score will take a long time, right?
Not necessarily. Last year, we helped more than 900,000 consumers and found that 73% of applicants could improve their credit score by 20-points or more within the same 30 days it typically takes to get your mortgage to the closing table.*
* Results are based on the most recent Credit Mortgage Potential Index and the improvement potential for applicants over the last 30 days.