When you are looking to buy your first home, there are some “musts” you should know right away!
Be careful about purchasing a large debt like a car loan, furniture, etc.: Yes, it’s exciting that you have the down-payment necessary for your home purchase, but remember the DTI (debt-to-income) ratio can drastically change that can cause your loan to shift its rate, program type and more.
With that said, your FICO score can be increased if you do the following:
- Have a car payment for example paid off. If your car payment is 12 months from being fully paid off, we can help you run a credit report scenario that allows us to know what the increase in FICO score could be if you pay off the car.
- Pay down some credit card debt to below 50% of credit card limit. You may not be able to do this to all the credit cards, but even 1 of them can assist in getting you into the range for a better interest rate.
Final Note: When you are in the midst of a home purchase, DO NOT have any other credit pull done.