If you hope to be able to afford a decent home with a comfortable mortgage payment, your first step is to raise your credit score.

If you hope to be able to afford a decent home with a comfortable mortgage payment, your first step is to raise your credit score.

If you’re considering buying a home, do yourself a favor and stop looking at homes for sale online and take some steps to ensure you save money on the purchase. Sure, it takes a little time and effort but the payoff may just be a lower monthly house payment.

So, what’s the first step?
You won’t like this. It’s not fun, like looking at houses. It’s not comfortable, unless you are really good with your finances.

Step one, if you hope to be able to afford a decent home with a comfortable mortgage payment, is to raise your credit score.

But my score is decent
Decent isn’t good enough if you want to save money on a home. Boosting your credit score can mean big savings on your monthly mortgage payment.

FICO scores (the company that most lenders use to obtain credit scores) range from 300 (the worst) to 850 (the best) and a score between 750 and 850 is considered excellent. If your score falls between 700 and 749 it is considered “good.” Is your score between 650 and 699? Then you have “fair,” credit, according to most lenders. Poor credit scores are those between 600 and 649 and below that is what is considered “bad” credit.

According to FICO, a borrower with a low score might pay up to $200 more a month than the high scorer pays.

How to boost that score
No more late pays – pay all of your bills on time. Reduce the amount you owe by paying down credit card balances. Never, ever obtain new credit when you’re trying to build up your credit score. A newly-opened credit account on your credit report will lower your credit score.

Start paying off those debts, one-by-one; hack away at them and before you know it, those balances will be gone and your credit score will reflect the new, more financially responsible you.

Now you’re ready for step two of the home buying process – so strut into that lender’s office and confidently ask the representative to pull your credit score. You are on your way to getting an amazing mortgage rate and lower house payments!

By Rob Proctor. Rob is the Broker/Owner of At Home Real Estate Company in Loveland. Born and raised in Loveland, Rob calls Northern Colorado (Loveland, Fort Collins, Greeley and Windsor) his home with his wife and three daughters. To contact Rob, call 970.481.2133, e-mail [email protected] or visit athomerealestateco.com.