A good credit score is essential for many aspects of financial wellbeing, and the score plays a crucial role in the homebuying process. Mortgage lenders heavily rely on credit scores to assess risk and determine loan eligibility and terms. A higher credit score increases the likelihood of securing a mortgage with favorable financing terms that ultimately save borrowers thousands of dollars over the life of the loan.
Conversely, a lower credit score can lead to stricter loan requirements or even outright loan denial. Therefore, cultivating and maintaining good credit is a fundamental step toward achieving the dream of homeownership.
A strong credit history also impacts various aspects of homeownership. Credit history can influence the ability to qualify for homeowner's insurance, which is typically required by mortgage lenders. Furthermore, a good credit score can be advantageous when dealing with contractors for home repairs or renovations as it may lead to better payment terms. A good credit score opens doors to more financial opportunities and provides greater flexibility throughout the entire homebuying and ownership experience.
If you need help improving your credit score, contact a HUD- (U.S. Department of Housing and Urban Development) approved counseling agency for more information. Their counseling services are free and can provide steps to help you improve your credit score.
Ohioans starting the homebuying process may qualify for OHFA's homebuyer programs, including down payment assistance, interest rate discounts, and a mortgage tax credit. The minimum credit scores for OHFA's loan types are as follows:
- Conventional, USDA, and VA loans: 640 or higher
- FHA loans: 650 or higher
For more information on OHFA's programs, visit myohiohome.org.
