After months of looking, you have found your ideal home in San Diego. Now all you need to do is secure a real estate mortgage at a great rate, right? It’s not quite that easy. Any San Diego lender is going to check your credit score before offering you a mortgage to buy that choice piece of real estate.
Your credit score determines if you can secure a mortgage, and what types of terms you are offered and how much you will pay over the life of the San Diego real estate mortgage if you can secure a mortgage. Your credit score tells the San Diego lender what type of credit risk you are and the likelihood that you will repay the money that you are loaned.
Although there are several types of credit scores, almost all San Diego real estate mortgage lenders use the FICO score. The FICO score is used for several types of credit and loans, and can affect terms offered for credit cards, car loans, home equity loans, private mortgage insurance, the required size of your down payment, and even the amount of documentation a San Diego lender will require of you during your mortgage application. Your FICO score determines what type of San Diego real estate mortgage loan for which you are eligible, as well as how much money you can borrow.
Every person has three FICO scores. Since the information maintained by each credit bureau varies, your score will differ. Before you begin hunting for San Diego real estate, it is a good idea to check all three bureaus for your FICO score, as well as right before securing a San Diego real estate mortgage. Even if you have checked your FICO scores recently, your scores fluctuate as new information is received by the credit bureaus. It is better to know your FICO scores for certain, than to be surprised during crucial negotiations.
Some of the things each credit bureau looks at in developing your FICO score are your payment history, the amounts your currently owe, the length of your credit history, new credit you have obtained, and the types of credit you use. If you have a low credit score, you may want to work on these things before applying for a San Diego real estate mortgage loan.