The housing market has been a sore subject the past couple of years. However, optimists predict that the housing market should improve in 2013. This is great news for those looking to buy or sell a home this year.
If you fall into this category, then you know it’s important to get the best rate on your home loan that you possibly can. Before applying for a home loan, we recommend you check your credit scores and reports from each of the three national credit bureaus (TransUnion, Experian and Equifax). If you see any inconsistencies or errors on your report, those should be addressed and corrected before applying for your loan. Remember, the better your credit score is, the better the rate on your home loan may be, so checking your credit score can be an important step in the home buying process!
An analysis conducted in 2012 shows that in about 20% of mortgage applications submitted around the time of the study, the average successful applicant had a credit score of 764. This number is much higher than reported in previous years, which could indicate a more selective approval standard. The analysis also shows that homeowners looking to refinance had even higher scores, on average 770.
Additionally, the analysis looked at the average credit score of applicants seeking a loan through the Federal Housing Administration (FHA). The FHA typically helps those with lower income or credit scores obtain home financing. Even those applying for loans through the FHA had an average score of 701. For these reasons, it is especially important to know where your credit stands in 2013 if you’re house shopping. Also remember, checking your own credit information will never lower your credit score, so it is better to be safe than sorry!