Today we will examine the impact of credit on a 1st time home buyer. As has been posted, a credit score of 580 is pretty much considered the minimum score available for financing or down payment assistance.
It is recommended that potential home buyers have their credit pulled ahead of time and for the report to be examined by a professional; a mortgage professional or a non-profit that specializes in educating 1st time home buyers. Fixing credit issues ahead of time, as you know from previous “risk based pricing” blogs, WILL save your customers money in the long run.
What if they don’t have credit, you may be asking. Do not consider this a deal killer as many lenders accept what is called “non-traditional” credit. For those without sufficient open and/or closed accounts, the ability to use rent, utility bills etc. as an alternative is possible. The payment history on those accounts over the previous 12 -24 months is what the underwriter will analyze.
Please make sure you are working with those professionals that understand the market today for 1st time home buyers. Thanks once again to Susan Gould at Hope for a Homeowners. Her website if you have any questions at www.Hopeforahome1.com.
Tuesday, January 27, 2009
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