Although I work with investors in Southwest Florida real estate, I also am excited every time I get to help someone find their dream home in our area. You could be a new retiree moving to Florida or you could be a couple with a baby on the way, and you’re looking to expand… either way, you’re at an amazing time in your life. And I’m very glad to play a part in it.
One question that comes up a lot when I’m working with homebuyers is how important is your credit and what decisions most impact your rating. It’s a common concern that doesn’t have an easier answer, because everyone, you included, are in a different financial spot than anyone else. But there are still some guidelines that I like to share, guidelines that are fairly easy to follow and will help keep your score looking its best.
Is it okay to open any new lines of credit?
When it comes to your credit score, you want to show that you have a stable history more than anything else. Think of it as the trend is your friend. If you’re showing over the past 5 years that you’re growing in responsibility, that’s a good thing. But when you’re within a year of buying a home, avoid opening a new line of credit as it can decrease your score, which can harm an otherwise awesome trend.
Can you make expensive purchases on credit?
Too often I see new homebuyers worrying about their daily Starbucks habit in relation to their credit. These tiny purchases that you pay off by the end of the month aren’t going to drastically change your score for the worse. But expensive, larger purchases can drive you closer to your credit limit, which can give a lender pause. It’s not that it will make or break the deal necessarily, but if you buy a brand new car the month before you apply for your loan… your lender may wonder. Limit any purchases that year before you’re ready to buy your Southwest Florida home.
Is it bad if you make late payments?
I get it… between work and family you’ve probably got your hands full. In fact, one of my jobs is to help ease that stress as you buy your new home. However, it is essential that you’re making your existing credit payments on time. Lenders can show concern about late payments up to 5 years ago in some cases. Now, if you’re a couple looking to buy a home, and one of you has never made a late payment in your life, this can help the situation. Again, every situation is unique, but aim to keep your score high by always making your payments on time.
What if you’ve changed jobs recently?
If you’re buying a home in SWFL, chances are there are big changes on the horizon. That certainly might mean finding a new job in our area. At the same time, your lender will be looking at your income and job history to determine whether you’re the right fit for a loan. If you’ve suddenly quit your job… that doesn’t look so stable. Instead, you’ll want to hold off if possible before changing tracks to a new company.
But let me reiterate - everyone’s financial situation is different. Let me give you personalized advice and tips. Shoot me an email!
Terry Records
Records Results Real Estate, Broker / Owner
Residential Sales and Property Managements Service
Have a great day!
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