Rate locks and raising your credit score

Mar. 9—Welcome to "REAL ESTATE RADAR with Sarah Jane". Read below to find important information regarding rate locks and how a borrower can help raise their credit score! Today we are interviewing Leanna Eubanks with First United Bank.

Sarah Jane: How long can a buyer lock their interest rate? and if the buyer needs to extend it how much does it cost the buyer to extend their rate lock?

Leanna: Typically we lock on a 30 day or a 45 day rate that gives the customer the best pricing. We can also look at a 60 day or 75 day. First United Bank offers a long term option up to 270 days.

Sarah Jane: What is the minimum credit score a buyer has to have to purchase a home?

Leanna: The minimum credit score we can do at First United Bank is down to a 580 through our FHA and VA programs if the borrower qualifies.

Sarah Jane: What advice do you have for a buyer that needs to raise their credit score?

Leanna: We typically look at their report and help them come up with a game plan. Credit scores are based on three things.

1. Balance to limits — Is the credit card maxed out? Sometimes it's as simple as paying a few things down.

2. Longevity of accounts — It takes at least a 12 months payment history to start seeing credit for those accounts.

3. Paying bills on time — Making sure that if they have any late payments they get those caught up and determining how many months we may have to wait due to those late payments to get their score up.

4. If the borrower has collection accounts we try and help them navigate through those as well.

Sarah Jane: How does a buyer figure out their closing costs when purchasing a home?

Leanna: When we pre-qualify the borrower we typically try to get an estimate of what we think the title fees and prepaid costs will be. We have an estimated transaction summary that we can show them. Once the borrower makes an application they are provided with a very detailed loan estimate of costs associated with their loan and what their monthly payment would be.