In the market for a new home? Maybe not… Maybe you’re just looking to refinance an existing home loan. The FHA makes home financing easy and how you handle your credit card can literally make or break your credit scores. If you are an avid reader of the FHA Loan Search blog, then you already know how important credit scores are to qualifying for a home loan. Also, by this point you know that the answer to this question is: Yes, you CAN get a mortgage with credit card debt.
Making mistakes with your credit card can drastically impact your credit reports for the worse. For example, late payments can negatively affect your credit scores for up to seven years. Therefore, it’s imperative that you handle your credit card with care. While you may still qualify for a home loan with high credit card debt, you should always be mindful of your debt-to-income ratio and how it plays into your current credit score.
Credit scores influence a number of financial policies in your lifetime, including insurance premiums and mortgage rates, so you must have good credit. In order to figure out what your standing is, you must obtain your credit reports through the three main reporting bureaus – Equifax, Experian, and TransUnion. Right now, 90% of lenders look to FICO to obtain your credit rating.
After you know what your updated credit scores are you will have knowledge that can start the conversation as to what home loan option is best for you. Your credit score will determine whether or not you are likely to be subject to any lender overlays as well.
Overall, it’s best to closely monitor your credit reports and scores and avoid errors. You can access your credit card information through the agencies quickly and easily. Once signed up, you’ll be able to stay notified of any changes that are made to your account, as well as understand how you can protect your good credit or improve your bad scores.