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According to The Street, mortgage rates are the lowest since 2013. Therefore, homeowners should take advantage of this opportunity to re-finance to lower monthly payments or do that renovation project they have dreamed of for years. Likewise, for those who have had their eye on a home, now is a perfect time to take out a loan to buy a house.

As we head into summer and the peak time to get that roof replaced, watch for upward movement in the mortgage market so you can lock in a low rate before any jump in rates.

However, it is also wise to keep in mind that lower rates mean higher rejection rates. Why? Because, there is a smaller margin for profit versus loss. So, your Fair Isaac Corporation (FICO) score is very important right now. Although it is a good time to borrow, for those with FICO scores of 620 and below, it is a good time to strengthen sagging credit scores. FICO rates an individual’s credit worthiness on a scale between 300 and 850; 650 and above is very good. When your score is below 620, you will probably need to improve your score before getting a mortgage loan with a bank.

Fixing Your Credit Score

You will need a FICO score of 650 or above to get a loan to buy a house. One of the fastest ways to fix your credit is to request a copy of each of the big three credit reports, TransUnion, Equifax and Experian. An easy and free method of doing that is to sign up at Annual Credit Report. Order a copy of your reports and start eliminating incorrect or old data. You will probably want to gather credit information you have in your files because they will ask difficult questions about you credit to verify your identity. This is for your own protection.

Once you have done everything you can to make corrections, including contacting creditors that have placed incorrect information on your report, you should pay down balances. You should not have any credit cards that are more than 30 percent of your credit limit and your overall credit should not be more than 10 percent of your available credit. Don’t cancel cards you are not using except when they have an annual fee. In other words, if your limit is $3000, you shouldn’t charge more than $1000 on that credit source. If necessary, ask for a higher limit and/or pay twice a month. Some companies will not approve a higher limit until you have made five or six payments. Consumer Reports has additional advice here.

Another Option Besides a Loan to Buy a House

Another option is to stay put. Sure, the house you have been in for years is getting a little small and dated, but why not update it? Consider getting a renovation loan from Red Door Funding rather than a loan to buy a house. Even if you do not have enough land to spread out you can always go up, depending on local ordinances. You could add a couple of bedrooms and a family recreation room or home theater room upstairs. Or, convert that space over the garage into living space for the teens or mother-in-law. Call the professionals at Red Door Funding, (832) 539-1099 for the cash you need to make those renovations. And if you still want to buy that other place after renovations, you can pay off the loan to Red Door without penalty.

When you need a renovation loan to get the maximum value out of your home in the Houston, TX, area, especially Sugar Land, Pecan Grove or Stafford, fill out a credit application here and get the money you need based on the appraised value of your home after renovations. Visit our website or send us an email for more details, dwilliams@reddoorfunding.com.