Free Articles, Free Web Content, Reprint Articles
Tuesday, February 19, 2019
 
Free Articles, Free Web Content, Reprint ArticlesRegisterAll CategoriesTop AuthorsSubmit Article (Article Submission)ContactSubscribe Free Articles, Free Web Content, Reprint Articles
 

Credit Help for Buying Houses: 14 Common Credit Mistakes

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 home buyers with nonprime loans which have higher point charges, prepayment penalties, and higher interest charges, which therefore cost more money.  Avoid the most common credit mistakes and build strong credit to finance your future.

Get the credit you need to buy your dream home or multiple investment properties. Qualifying for a real estate purchase requires different credit than automobile financing or retail credit.

If you plan to finance real estate, either as a home buyer or as an investor, these credit tips will help you with your credit score and save you money on loan costs.

1. Using expensive or undesirable types of credit costs too much and is negatively scored.

2. Accumulating too many lines of credit or too many credit cards causes credit report remarks like "too much consumer credit."

3. Only paying the minimum due keeps balances too high.

4. Being maxed out on any credit card or line of credit causes deep drops in scores.

5. Taking cash advances costs higher interest and extra fees.

6. Exceeding limit and having to pay over-limit fees is a negative with creditors and causes "high proportional amounts owed" remarks on credit reports and subtracts credit score points.

7. Paying a day or more late causes unnecessary late fees and often increases interest rates.

8. Charging more than you can afford causes a snowball effect of amassing debt with no easy way to pay it off.

9. Letting someone else use your credit, such as co-signing a loan, raises your debt-to-income ratio and possibly adds "too many consumer accounts" on your credit report, which lowers your score.

10. Ignoring credit problems causes unnecessary negative impact. Talk to creditors before being late and make arrangements. This action heads off negative reporting to credit bureaus.

11. Failure to report address changes to creditors causes misplaced bills and late payments.

12. Using partial name, different names, initials instead of whole name, or forgetting Sr. or Jr. causes mix-ups. Use your full legal name to protect you from confusion with similarly named borrowers.

13. Failure to report name changes to creditors also causes confusion.

14. Not checking credit report frequently is one of the most common mistakes consumers make.

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 home buyers with nonprime 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, interestPsychology Articles, 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 your dream home and investment portfolio!

 Copyright (c) 2005 Jeanette J. Fisher. All rights reserved.

Article Tags: Real Estate, Credit Score, Credit Report, Debt-to-income Ratio, Good Credit

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


Professor Jeanette Fisher is the author of Credit Help! Get the Credit You Need to Buy Real Estate and other books. Jeanette and her husband Brian (former special ed teacher) chose real estate investing to be able to care for their daughter with special needs. While buying and selling millions of dollars worth of real estate, the Fishers were forced into becoming credit experts. Real Estate Credit Help, visit http://www.recredithelp.com



Health
Business
Finance
Travel
Technology
Home Repair
Computers
Marketing
Autos
Family
Entertainment
Law
Education
Communication
Other
Sports
ECommerce
Home Business
Self Help
Internet
Partners


Page loaded in 0.155 seconds