Homebuying 101: What You Need to Know About Credit and Mortgage Readiness
Homebuying 101: What You Need to Know About Credit and Mortgage Readiness
If you’re dreaming of buying your first home, one of the most important early steps is getting financially prepared—and that means understanding your credit and mortgage readiness.
At New River Home Trust, we work with first-time homebuyers across the New River Valley, many of whom are unsure where to start. Whether you’re just starting to think about homeownership or actively planning your next move, here’s a simple guide to help you feel more confident and informed.
Why Credit Matters When Buying a Home
Your credit history gives lenders a snapshot of how you manage debt. When you apply for a mortgage, banks use your credit score to assess risk—and to determine the types of loans and interest rates you may qualify for.
Here’s a quick breakdown:
Excellent credit (740+): Typically qualifies for the best mortgage rates
Good credit (670–739): Eligible for most loan programs
Fair credit (580–669): May still qualify for certain loans, including many first-time buyer programs
Poor credit (below 580): Could make it harder to get a mortgage—but it’s not impossible
If your score is low, don’t panic. We’ve helped many buyers improve their credit and prepare for homeownership over time. It’s all about knowing where you stand and creating a plan.
How to Check and Improve Your Credit
You’re entitled to one free credit report per year from each of the three major credit bureaus (Equifax, Experian, and TransUnion) at AnnualCreditReport.com. Reviewing your report helps you spot errors, track debt, and understand what’s affecting your score.
Quick ways to improve your credit include:
Paying bills on time
Reducing outstanding balances
Avoiding new debt
Disputing any errors on your report
At New River Home Trust, we offer education and support to help you understand and build your credit as you prepare to buy.
What Does “Mortgage-Ready” Mean?
Being “mortgage-ready” means you have the financial foundation in place to apply for a home loan. This typically includes:
Steady income
Reasonable debt levels
Some savings (for closing costs or down payment, if needed)
Clean credit history
Most lenders will also look at your debt-to-income (DTI) ratio, which compares your monthly income to your monthly debts. A lower DTI shows you can handle a mortgage payment comfortably.
Even if you’ve had credit struggles or don’t have a big savings account, you might still be eligible for a home through NRHT. Our model is built to support buyers who have steady income but face barriers in the traditional housing market.
How New River Home Trust Can Help
We know that homebuying can feel overwhelming—but you don’t have to do it alone. NRHT offers a supportive, step-by-step process to help you get ready for a mortgage and connect you with trusted lenders.
Here’s how we support mortgage readiness:
Free application process to determine eligibility
Soft credit pull (doesn’t impact your score) to assess your financial picture
Personal guidance from our team as you prepare for loan approval
Education and resources to help you navigate every part of the process
If you’re ready to take the first step—or even just explore if you’re eligible—we’re here for you.
Take the First Step Toward Homeownership
Homeownership is more than a dream—it’s a path to stability, security, and generational wealth. And it starts with knowing your options.
Whether your credit is great or still a work in progress, New River Home Trust can help you get mortgage-ready and into a home that fits your life.
Ready to find out if you qualify? Start your free application today.
