Credit

Credit and Buying Power - woman holding credit cardCredit determines if a lender will give you a mortgage loan or not and if they will, how much to charge you.  The better the credit, the lower the interest rates.

If you’re looking at conventional conforming loans (what most people call conventional loans), your middle score must be at least 640 to get one.

With lower scores, or no scores at all, you have to get an FHA loan, which complicates things if you’re looking at a condo (they must be approved).  Remember, townhouses can be condos or not, depends on whether you’ll own the lot too or only the space from ground up and between exterior walls but below the middle of the ceiling.

Credit reports contain inaccuracies, some of which work against borrower.  For that reason, it is a good idea to check before you actually need to apply for a mortgage.