How Credit Scores Impact Your Home Purchase
Since the economy crashed, a lot of things have happened that have damaged people’s credit scores. Today, I’m here with lending expert Rick Barrick to discuss how your credit score affects your ability to purchase a home, as well as what you can do to fix your credit score.
In order to qualify for a mortgage, you need a credit score of at least 600. Sometimes, you can have a slightly lower score, but in most cases, if you have a credit score of at least 600, a lender will be able to help you out.
As far as helping people with damage to their credit, Rick recently worked with a lady who wanted to purchase a home even though her previous property had been foreclosed on. The bank sold the property more than three years ago. Since it had been more than three years, she was able to get an FHA loan with a credit score of 645. She only had to pay 3.5% down and she locked in a 3.5% interest rate.
Not only that, but by purchasing a home, she was actually able to save money. When she rented her home, she had to pay $1,300 a month; her mortgage payment will only be $1,100. She’s saving money and investing in herself.
A lot of people think that if you foreclosure on a property or have to do a short sale, you have to wait 10 years before buying a home. However, that is not the case when it comes to an FHA loan. In order to qualify for an FHA loan, you only have to wait three years after the bank sells your property. In order to qualify for a conventional loan, you have to wait seven years.
Although it only takes a few more years to qualify for a conventional loan after a foreclosure or short sale, the FHA loan is actually the best way to go if you want to buy a house. There are so many people out there who think that they cannot buy a house because they went through a foreclosure or short sale back when the country was going through everything in 2010. However, a lot of those people actually can buy a home. In fact, buying a home will actually save you money because it is less expensive to own a home today than it is to rent one.
If you think that you don’t qualify to purchase a home, give Rick a call at (513) 229-9660. You can also visit his website for more information. If you have any other real estate questions, give me a call or send me an email. I would be happy to help you!