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Washington DC Real Estate Resource Center: Credit Score and the Mortgage Process

If you're thinking about buying a home, you should also be thinking about your credit score. Your credit score will largely help determine your mortgage interest rate, as well as how much of your home's value you can borrow and how much paperwork will be required for mortgage approval.

Credit Score an Important Component of Mortgage Process

Normally, the better your credit score, the less down payment you need on a purchase and the better interest rate you'll receive. So how is your credit score determined? The concept of credit scoring is based on looking at a borrower's entire credit history and translating it into one three-digit score. Credit scoring systems examine the borrower's record of paying debts, payment histories, collection accounts, and public records. Credit scoring systems also look at a borrower's outstanding balances against available credit limits, as well as the number of inquiries to a borrower's credit report has been made.

Mortgage lenders can be choosy when determining your loan terms - so you too should be choosy when accepting loan terms. Shop around when looking for a mortgage and choose a lender that offers the best rate for a specific score. And make an effort to increase your credit score. Pay your bills on time, keep credit card balances low, and take out new credit only when it's necessary.

For more information on the mortgage process, contact Michelle Buckman. Representing W.C. & A.N. Miller and Christie's Great Estates properties in Chevy Chase, Northwest Washington DC, Capitol Hill, and the Trinidad neighborhood, Michelle works with a full range of clients, notably first-time homebuyers.