Mortgage Myth 3: Credit Scores and More

Welcome to the third blog of Aksarben Mortgage’s seven-part series on mortgage myths and facts with Nick Zwiebel and John Major.

This week, we look at the role credit history plays in obtaining a home loan and shed some light on two particular credit misconceptions. 

Let’s tackle the first statement.

“Checking your credit with multiple lenders will not hurt your credit.” FACT! 

“You need perfect credit to buy a home.” MYTH!

It is a common misconception that every single time you check your credit, as well as checking with various mortgage companies or banks, you will ding your credit. 

A savvy shopper is one who shops around for the best deal. This is true for mortgages as well. Credit bureaus actually encourage this practice, allowing you to compare your loan options between multiple mortgage companies or banks within a 30-day window without your credit score taking a hit. This 30-day period is called a mortgage umbrella.

To protect your credit score, avoid multiple loan inquiries at one time. If you attempt to secure a mortgage loan, car loan and personal loan and apply for a credit card all within a short period of time, your credit will suffer.   

Which brings us to the second mortgage credit myth: You need perfect credit to buy a home.

The good news is you don’t need a pristine credit history to obtain a mortgage. While high scores are often associated with great loans, there are numerous programs available to individuals with lower credit scores that don’t saddle them with higher interest rates. 

Consider the subject of last week’s post, FHA loans. The Federal Housing Administration established FHA loans to help low-to-moderate income individuals achieve the dream of homeownership. 

Even in the case of conventional loans, you do not need a perfect, or near-perfect, credit score. There are as many loan options available as there are various credit scores. 

So, reach out to us at Aksarben Mortgage, your local mortgage advisors, to see which options are the best match for your credit score and financial situation. We have helped 1,000s of Nebraskans move into their new home and want to help you experience your good life of homeownership, too.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.