At Keep Austin Weird Homes, we receive many calls from people who are interested in buying a home, but who have no idea whether they qualify for a loan. In fact, we have fielded calls from 5 different people just this last week on one of our homes for sale in Austin, and out of the 5 people, none of them could qualify for a mortgage loan right now.
The lesson is not to give up on your dreams of homeownership, it’s to start thinking about your credit score and you credit worthiness long before you fall in love with any one particular property.
According to a recent article in Inman News, the average FICO score for mortgages approved in September was 750. Borrowers’ down payments on loans that were approved averaged 22%. People whose applications for mortgages were denied had an average FICO score of 704, with borrowers willing to make down payments averaging 12 percent.
Currently, payment history has the biggest impact on how FICO score is calculated. So if you want to improve your FICO score, it’s important to show you can handle credit responsibly. This includes paying at least the minimum amount on all credit cards every month and not using all the credit that is available to you.
If you are curious about whether you are qualified for a mortgage to buy a home in Austin, we can connect you to one of the lenders that we work with. After a brief phone consultation, you’ll have an idea of where you stand. If you’re not quite ready for that mortgage yet, you’ll learn what steps you can take to increase your credit score. The website myFICO.com also offers tools to help you learn about your credit.