Credit score and buying a home go hand in hand. In todays’ economy many people have missed and or late payments on their home.
As I was reading the Baltimore Sun Newspaper, some time back on Sunday, April 22, 2012, an article titled; “Mortgages Taking Back Seat” written by Mary Umberger. It mentioned that in contrary to previous years paying ones mortgage has taken a back seat on the spectrum of the priority of creditors to be paid. Not paying your mortgage does have a big hit on your credit, however because it takes longer for the bank to come knocking at your door with the sheriff, some are deciding to take the hit on their credit for their mortgage and deal with the phone call from one creditor verses several from their bank card and automobile grantors.
In the past most mortgage companies were willing to take on those whose credit score was at least a 620. Some companies have already raised the minimum score to 640 which could lock out many people.* Subsequently, according FHA one can get a loan with a minimum credit score of 580. The real question is WHO, is going to take the risk to write the loan for those with lower credit scores in today’s economy? Have they been shut out? For those who currently have mortgages I wonder if missed and late payment will be the final case in your ability to purchase a home in the future?
Nonetheless, it is very important to understand how credit can affect your decision to “Move on up” in the future and rebuild the American Dream of homeownership.
*Maryland's average credit score is 695