|
Author: Jeanette Joy Fisher Article source: http://www.cypruspropertychoice.com/. Used with author's permission.
Credit for Buying Real Estate is Different than Credit for Buying Cars
Forget what you've been told about credit.
You may be shocked at some of these tips because this information runs contrary to what other so called experts tell you. Qualifying for a real estate purchase requires different credit than automobile financing or retail credit.
Common Credit Myths
1. You need to pay off your credit cards
2. You need to close credit accounts
3. You need perfect or good credit to buy a house
Credit Facts
1. Paying off your credit cards lowers your credit score
2. Closing credit accounts lowers your credit score
3. You don't need perfect credit to buy real estate
Why not pay off credit cards? Because paid off credit cards do not compute in your credit score. Real estate lenders like to see open, active accounts with low balances.
Why not close accounts? Closing accounts before the payoff often costs consumers more money because credit card companies raise interest on closed accounts.
You can buy real estate with poor credit, but you will save thousands in loan costs if you maintain good credit. A bad credit report leaves homebuyers with sub-prime loans which have higher point charges, prepayment penalties, and higher interest charges, which therefore cost more money. For instance, a mortgage loan of $150,000, 30-year, fixed-rate mortgage, interest rate of about 5.72 percent costs around $870 a month; poor credit scores raise the interest rate over 9 percent and the payments over $1,200.
As you see from these payment differences, good credit means that you can finance a more expensive house with the same income, or save $330 each month.
Credit Requirements for Mortgages
Credit needed to buy real estate is not the same as good credit. Besides your credit score, mortgage lenders consider your debt-to-income ratio and other credit matters, unlike other credit grantors. Your debt-to-income ratio is the comparison of mortgage payment, including taxes, interest, and insurance to your total gross monthly income. Real estate lenders also consider your employment qualifications and your overall debt ratios.
Understanding the difference between good credit and the credit needed to obtain real estate financing helps you buy houses!
(c) Copyright 2004, Jeanette J. Fisher. All rights reserved. Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm
Mortgage Loan Closing Costs for Refinance Loans and Home Purchase
If you are going to obtain a mortgage loan, for whatever purpose (home purchase or refinance) you are going to pay closing costs...period. Let me clarify regar...
How to Increase Traffic to Your Artist Blog
Free ways to promote your blog using blog-specific online marketing techniques. Expose your blog to a target audience and build quality traffic to it - for free...
Network Marketing Companies
How to identify the best network marketing companies...
Vagus Nerve Stimulation: What are the Benefits and How Does It Relieve Depression?
Vagus nerve stimulation is more effective than antidepressants and is not related to brain surgery or shock treatments. It is a 60-90 minute out-patient procedu...
Responding to Criticism Without Being Defensive
In an actual war, to be attacked means to have our survival threatened. Thus, we might chose between surrender, withdrawal, or counterattack. When we feel attac...
Generate Traffic And Make Money
Websites with rotating ads offer their members to surf for cash and advertisement credits. The article provides background information about this quite new phen...
10 Persuasive Triggers To Plug Into Your Ad
1. Most people want to win over others. Tell your prospects how their family or friends will admire them if they buy your product. 2. Most people want to associ...
Train Your Dog With Respect
Proper training of your dog should begin when he is a puppy. The first four months of a dog's life are very important in the training of your dog. This is whe...
Moving Checklist
You may be moving into your "dream home," but the moving process itself is nobody's dream. Use a good checklist to make the move as smooth as possible.
Hair Transplant Surgery – Do You Need It, Do You Want It?
I'm suffering from hair loss. Should I consider hair transplant surgery? When should I consider it and what should I do first?
Investing Online Has Its Rewards: Find Out How To Take Advantage Of Them
Online investing has helped a level playing field for the "average investor". The quality and amount of information
available online today empowers those who ta...
Top Three Internet Marketing Two-Tier Affiliate Programs
What Internet marketing affiliate programs should you join and endorse to your list in order to increase your online business profit?
Change Your Outlook on Change
Make no mistake about it, change is challenging whether it is conscious or unexpected. Viewing adversity as change, not loss or failure, is part of empowered a...
Civil War Uniform Shirts – When to Use a One and Two Piece Body!
So, you want to make your own Civil War shirt. You have so many decisions to make - one or two-piece body, type of front, buttons, material, colors, collars! ...
You Say Jacuzzi and I Say Whirlpool
Read how using hydrotherapy from a Jacuzzi can aid in pain relief, relaxation and rejuvanation.
How To Spot A Bad Purchase Before You Buy
Seven incredible tips for a more secure purchase online, learn how to spot a bad purchase online before your buy.
Important Tips for Conflict Resolution in the Workplace
The place to start when implementing meaningful conflict resolution is with the individual. Each individual is always first responsible for the way they interac...
You Cant Fool Mother Nature
Up until the very early 1900's, the farming and livestock in this country was grown and raised using natural and organic methods. It was just the way it was do...
Insider Tips For Finding A Great Online Poker Room
Even though they look pretty much the same and they're all selling essentially the same few games, all Online Poker Rooms are NOT created equal! The differences...
The Nitty-Gritty Of Ezine Publishing
I`m not the ONLY publisher who refuses to automate, so please, after reading my hours, spare a kind thought for all those other publishers out there that do eve...
To Gain Weight - Fast!
Frustrated because you just can't seem to gain weight? Chances are your weight gain routine is missing one or more of these crucial elements. Go through my chec...
Complete Pec Training Tips
Put these pec techniques to use and develop that full, muscular chest today.
A Need to Review Abortion Laws In Belgium
This article is about the urgent need of reviewing the April 3, 1990 liberal Belgian law on abortion by comparing it with the strong 1993 Polish on family plann...
What are Betting Exchanges?
A brief introduction to betting exchanges,with an explanation of how they work,and pitfalls to avoid.
|
Print this page