For anyone seeking a mortgage, credit is a crucial factor significantly influencing your buying power. However, this doesn’t imply that you’re barred from purchasing a house if your credit isn’t perfect or if you don’t have a substantial amount of cash on hand. It simply means that being well-informed and adapting your strategy can make all the difference. If you’re considering buying a home, here are three key aspects of credit that you should be aware of before making your purchase.

1. Know your credit score and what it means.

We know that credit can seem scary — and not everyone has a high score or any score at all. Never fear, though. That doesn’t mean you’re disqualified from buying a home. 

First, you’ll want to make sure your credit score is accurate. If there is inaccurate information, try to get it removed. A few websites can help you with this, one of which is Experian.

You have the power to increase your credit score in many ways, including paying down credit cards you’re close to the limit on and asking for higher credit lines. This puts you in control of your financial future.

2. Don’t let a credit score stop you.

Psst. Do you want to hear a secret? You don’t need perfect credit to buy a home. Ultimately, having better credit means a lower mortgage rate. However, various loans are often available if you are willing to pay a slightly higher rate. 

3. Having money for a down payment still matters. 

You may have heard you need roughly 20% of a home’s price for a down payment, but that isn’t always the case. In 2021, the average down payment for first-time homebuyers was 7% and 17% for repeat buyers. This flexibility can ease the pressure of saving a large sum.

Of course, be sure you’re saving money if you want to purchase a home soon, no matter what your initial down payment may be.

Many federal and state-specific programs are specifically designed to help lower the down payment for first-time homebuyers. This support can make your dream of homeownership more attainable. 

If you’re ready to take the plunge into homeownership, getting your finances in order is key. Then, you’ll need to team up with the right real estate pros to navigate the journey ahead.