 TITLE: Do I Earn Enough to Afford a $200,000 Mortgage? CONTENT: How Does Credit Affect Your Mortgage Affordability?\n---------------------------------------------------\nThe first step a lender typically takes upon receipt of a mortgage application is a credit check—a request for your credit score and credit report from one or more of the three national credit bureaus (Experian, TransUnion and Equifax).\nLenders typically have a minimum credit score they're willing to consider when evaluating borrowers. Different lenders have different minimum score or \"cut-off\" requirements. Lenders use credit scores when deciding whether to offer a loan as well as when determining the fees and interest rates to charge.\nIn accordance with a widespread industry practice known as risk-based pricing, applicants with the highest credit scores typically are offered the lowest interest rates available. Those with lower credit scores are typically charged higher interest (and perhaps steeper fees as well). The basis for this is the fact that individuals with higher credit scores are statistically less likely than those with lower scores to miss payments and require lenders to initiate collections, foreclosure or other loss-prevention measures.\nMortgage lenders often offer numerous loan packages, with different interest rates and fees, targeted to borrowers whose credit scores fall within a specific numerical ranges—for instance, one offer for applicants with credit scores of 800 or better; another for those with scores of 720 to 799; and another for those with scores of 650 to 719. These are purely hypothetical examples; each mortgage lender sets its own credit score requirements. END