• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Should you improve your credit or buy a house now?

August 29, 2021 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
credit score to buy a home

One of the challenges to purchasing a home is your credit score. Everyone knows to obtain the best financing available you need to have good credit or even better great credit. But for everybody else, if you’re quiet is questionable or middle of the road this information is for you…

 

Traditionally, to get a mortgage loan you need to have at least a minimum credit score for a conventional loan of 620 FHA, believe it or not, will go down as low as 580 with most banks and lenders, but not all will look at it this way, but several big players in the market will do FHA loans down to a 580-credit score.

Your file must pass automated underwriting this means that even if your credit score needs a little bit of love, it still must pass automated underwriting meaning that if your file does not pass automated underwriting more than likely you’re not getting financing. This means you must have an ample down payment, cash to close, a sufficient debt-to-income ratio, a good job good income, and enough good in your files to offset the negative such as the credit score.

So, should you buy a house with a credit score you have or wait?  Well, how much is the new house payment with everything including principal interest taxes and insurance about your rent payment? How much more does your credit score have to go up to reduce the payment by a certain dollar amount?

For example, 80 points increasing your credit score is a very tall order to go from FHA to conventional which can only usually happen with paying off debt and time, meaning the timely payment of obligations. Throng to get clever or figuring out a way to manipulate your credit score by 80 points is probably a recipe for failure. Need to pay down debt? 20-30 points increase by paying off debt is manageable but if you’re talking about anything over 50 points in credit score, you’re talking about extraordinarily large feet.

When you buy a house your credit score automatically goes up anyway just by doing nothing else with your credit probably to the tune of about 20 to 30 points in most circumstances not all but, most. So, you have almost half the equation with your credit score already fixed just by buying a house anyway with a payment that you can afford, then sprinkle in 6 months for example it’s likely that you might be able to refinance into a conventional loan 6 to 8 months out at the soonest while letting market forces do its thing. In most markets throughout the country right now housing prices are stable to rising. So, if the prospect of buying a house means you can get an affordable payment and put yourself in a position where you can better your mortgage, but you can still afford it at the end of the day, buy a house today.

If however, the payment is astronomically high about your income you should pump the brakes on buying a house, work on your credit and pay off debt, or see if you can put down a larger down payment because the other way to offset a payment that you don’t like is extra cash maybe you can tap your 401k or ask mom and dad or your brother or sister or a family member for gift money? $50k of down payment translates to about $35000 a month and $400 a month of payment which can go a long way for a lot of families, especially when comes time to buy a house and get serious about a monthly budget.

Looking to buy a home? Get a no-cost quote today!

 

 

 

Related Mortgage Advice from Scott Sheldon

  • How long does a preapproval to buy a home last?

    As long is there no changes, to your credit, debt, income or assets a preapproval…

  • Renting? How About Buying The Buy House Instead?

    If you have never owned a home before, or owned a home in the past,…

  • This Credit Mistake May Cost You A House

    Your ability to purchase a home with financing is predicated on how much net income…

  • How to buy a home when you have one to sell first
    How to buy a home when you have one to sell first

    Purchasing a home can be tricky if you have a home to sell first. For…

Filed Under: Uncategorized Tagged With: BAD CREDIT MORTGAGE, banks and credit unions, buying a house, buying your first home, CA home buying, cash out refinance, credit to buy a home, FHA home loans

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window