Credit Scores and Mortgages on Long Beach Island
Credit Scores and the LBI NJ Real Estate MarketThe LBI NJ Real Estate Market
There is little doubt that mortgages make up an important part of any real estate market and this is true on Long Beach Island as well. Mortgage interest rates are essential to the long term costs of owning a house in the Long Beach Island real estate market so a buyer should do all they can to ensure that their interest rate is as low as possible. While there are many factors that come into play when determining interest rates on LBI, credit scores are high on the list! Credit Scores and the LBI NJ Real Estate Market should be understood by anyone looking to invest in the LBI real estate market so they can make the best financial investment possible!
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Credit Scores and the LBI NJ Real Estate Market
A credit score is an important part of your financial picture. The higher your credit score, the more likely your interest rate will be lower when looking for a mortgage on Long Beach Island. There are five main areas that will influence your credit score. They are:
- Your payment history
- The amount of money (balance) on current loans and credit cards
- The length of your credit history
- The types of accounts you currently have active
- Recent credit activity
Your payment history is perhaps the most important aspect of your credit score and makes up about 35% of your score. It shows when you make or miss payments on current loans, how often payments are late and when your last payment was made. The best way to improve your credit score is to make sure all your bills are paid on time!
Your current balance on existing loans makes up about 30% of your credit score and is determined by the amount of money you owe, the type of accounts you have and the amount of credit you have available on your existing loans. Keeping smaller balances (or no balances) will help to improve your score.
The length of your credit history makes up about 15% of your credit score. The longer you have had and used credit, the more this will play into raising your credit score. It is important to not cancel credit cards as doing so can often erase your credit history and lower your score!
10% of your credit score is made up by the types of credit accounts and loans you have. It is best to have a mix of credit accounts such as credit cards, bank loans and home loans but it is important to remember to use credit wisely. Payments must be made on time and keeping little or no balance will show an improved debt to credit ratio.
The final 10% of your credit score is made up by the recent credit activity seen on your account. Increases in short term activity, such as taking out multiple loans in a short period of time, can be a sign of financial trouble and hurt your credit score. A steady use of credit is best and will improve your score overtime.
Buying in the LBI NJ Real Estate Market
Credit Scores and the LBI NJ Real Estate Market should be important to anyone looking to buy a home on Long Beach Island. Not only will a good credit score help to secure a lower interest rate on a mortgage, it can also help to lower the cost of insurance and even help to negotiate a better deal on a home in the LBI real estate market.
For more information about the real estate market on Long Beach Island or Credit Scores and the LBI NJ Real Estate Market feel free to contact me, Nathan Colmer, with any questions and I will be happy to help!
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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