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<– Very informative Video (Just understand I am not endorsing or encouraging you to get that credit card – my feelings are neutral)
Well my friends out in cyberspace today we are going to talk a bit about CREDIT SCORES and what’s happen in the housing market in regards to that lovely THREE digit number.
I have to be honest before I went full time into Real Estate I had a general idea of what a credit score was. I knew it was important to develop your credit and keep it at good standing and all of that is true but I had not the slightest clue what it meant in regards to the Real Estate world.
Now, some of you may stop reading right here because you feel “well I’m not going to buy a home and I will just wait until I plan to buy and than think about my credit score.” Also some may be thinking “I only plan to rent so my credit score shouldn’t matter too much, I’ll be fine.” The list could go on and on and the more I speak with my customers or just people in general (I like to talk to strangers) I find that a large portion of the people have not the slightest clue, so this is where I decided to just clear the air of a few things.
Let’s talk about rentals for a moment. Now let’s say you plan to rent for a year or so to rebuild your credit or to save more money, I applaud your idea but I would make sure you run a full credit score and report, prior to looking at properties and do this for FREE (https://www.annualcreditreport.com/cra/index.jsp). I give this suggestion because most likely you will be asked to run your report and score for the home you plan to rent and they will charge you for it. So since you can get it for FREE why not do it. Also, if you have your credit score you now know if you have the power to negotiate on the rental price or if you have to prepare yourself to part with FIRST, LAST & SECURITY (well that’s what it is down here in South Florida) when you move in. Also if your credit score is really rough it will give you the chance to find perhaps a co-signer to help you out in getting the rental. One last note, if you plan to go to a leasing office, before you head out and make the rounds you should call and ask what the minimum credit score is because places like that look heavily on the score.
Alright to switch gears, let’s talk about credit and buying. Now credit is a large portion of the process in buying a home. I know first hand that many banks in the primary steps to obtain lending look at the credit score and they do have a basic standard that must be met in order to move forward. Since different lending institutions have different requirements, I personally would do some leg work before you go to apply for a mortgage and waste the money to do so. Also I would look to have a loan officer or your lending professional really take a look at your numbers and explain the in’s and out’s of the application process and also what exactly is on your report. I would encourage you to do this all well in advance (4 Months or more) before you plan to even think about buying. Because remember this is all a process and requires time and effort. At times your loan officer may tell you that you will need to work on your credit and within a year you should be good to buy. Now imagine if you had your heart set on buying and than come to find out your unable to. Always better to be safe then sorry.
Now, some of us out there may think that “heck I plan to put down a 10% to 20% down payment, so my credit doesn’t matter.” Well my friend I am sorry but you are not correct in your thinking. I read an article recently that stated, “According to an April survey by the Federal Reserve, lenders are less likely to originate a mortgage for a borrower with a FICO score in the 620 range, even if the borrower has a 10 percent or 20 percent down payment.” SOURCE I really pray that you are starting to see the importance in that THREE digit number. So I encourage to be proactive in your search to find out the in’s and out’s of your score and if you would like call my loan officer, who is a good friend and an honest and knowledgeable loan offer, his name is James Carter of Element Funding and he can be reached at 305.525.6742.
Well my friends I hope my words of advice helped you begin to see the importance your credit score and history. If you have any questions, comments or concerns please email me at: email@example.com or call/text 954.610.9112. As always, happy buying, selling and investing – there is no better time to do it than now. – Eddie