Which financial metrics are affected by a buyer's FICO score?

The likelihood of loan approval is significantly influenced by a buyer's FICO score. The FICO score serves as a key indicator of a borrower’s creditworthiness, which lenders use to assess the risk of extending a loan. A higher FICO score generally means that a buyer has a reliable history of repaying debts, making them more likely to receive approval for a mortgage. Conversely, a lower FICO score may lead to higher scrutiny from lenders or even denial of financing, as it suggests a higher risk associated with the borrower.

While the other options present relevant aspects of real estate finance, they do not directly relate to the impact of a buyer's FICO score. The type of property purchased is generally determined by market conditions and the buyer's preferences rather than their credit score. Similarly, the terms of the sales contract are usually negotiated based on factors like price and contingencies instead of credit metrics. Finally, required state taxes are determined by local tax laws and property valuations rather than the individual financial standing of the buyer. Thus, the primary connection between financial metrics and a buyer's FICO score is seen in the likelihood of securing loan approval.