Credit Scores and Real Estate
The credit crunch has many homeowners looking a little closer at their credit scores. People applying for home loans, car loans, and even credit cards, are being rejected by lenders. Exactly what a ”good” FICO score is can be hard to define, but somewhere around 700 is usually the starting point. However, even applicants with good or great scores are finding it hard to get credit.
Bob Stahl blogs about what goes into determining your credit score:
“The most commonly used credit scoring method is the FICO score. There are five factors that are used to determine your FICO score. Payment history is the most important factor, but is only slightly more important than amounts owed. The whole point of a credit score is to offer lenders a quick and easy way to estimate the risk associated with lending money to you. If lending money to you is riskier, because you’re more likely than someone else to default, the lender will charge you a higher interest rate to compensate for that higher risk (or will simply not lend to you at all).”
REALTORS® have adjusted their business to fit these new restrictions by making sure clients have qualified, not just pre-qualified, for a loan prior to home searching. Few things are worse that spending countless hours to help a couple find their dream home only to find out they can’t qualify after all.
Click through to read Bob Stahl’s full post.
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September 23 2009 09:09 am | Real Estate News