How credit influences your home financing options

Whenever a new buyer client calls,  I ask if they have been pre-approved for a loan yet.  Most reply “no.”  From there I explain that before you begin looking at potential homes, you need to get pre-approved.  For most buyers, it’s a fairly easy process of speaking with a loan officer on the phone for 10 – 20 minutes.  Some buyer might need to provide the loan officer with some simple documentation and then within a few hours to a day or so, the loan officer should have a pre-approval for the buyer.  At that point, the buyer will know their max purchase price, what their monthly payments would be, what the current interest rate is, what costs they will have in getting the loan and what type of financing would be best for them.  Also, most buyers don’t have a loan officer already and need help getting pointed in the right direction.  That’s when I recommend 2 or 3 excellent loan officers for them to contact.
clear skies,Doug Reynolds
 www.BHGshortsales.com

Here’s some info for you to glance over before starting the pre-approval process.

How credit influences your home financing options

One of the most important steps in buying a house is financing the purchase. Your credit is one of the first things that lenders examine when considering you for a loan. Making payments on time is the most important way to establish good credit. A pattern or history of frequent late payments can lead to a poor credit score that could negatively affect your ability to be approved for future loans, or result in home financing at a higher interest rate. Conversely, having a good credit score will let you secure a home loan at a lower interest rate.

Your credit report

When you are being considered for a home loan, mortgage lenders will review your credit report, which displays your credit history and credit score. Your credit score, also called credit rating, is based on a summary of your overall credit history. It is shown as a number that provides lenders with a fast and objective way to predict how likely you are to repay a loan.

Lenders use your credit report to decide on the following:

·         Whether or not to approve you for a loan

·         The type of loan for which you qualify 

·         The interest rate to charge you

The importance of good credit

Your credit history will follow you throughout your life. Therefore, making good credit decisions along the way will help a great deal when you're ready to realize the dream of home ownership.