By Marc Guzman
We all know how important your credit score is when it comes to borrowing money for credit cards, auto loans and home loans. But how many of us really take the time to educate our clients on the benefits of preparing their credit score before they buy a home?
Buying a home can be very exciting and a daunting process. Home buyers do a lot from preparing paperwork for the loan officer, research and viewing properties with their REALTOR®, reviewing disclosures and signing paperwork, to saving enough money for the down payment. But in working with many buyers, both first-time and experienced, it is amazing to me how many buyers overlook the importance of their credit score. Many buyers think saving the down payment is sufficient as long as their credit score is above 620. You know that question, “What is the minimum credit score I need to qualify?”
But the truth of it all is, no matter what the credit score, it is important to begin working on improvements 6 months to 1 year before buying a house; longer in other cases. It takes some time to significantly increase the score. You may also want to partner with a company that specializes in credit counseling. Now why place so much emphasis on improving an already qualifying score?
- Average score for buyers using conventional financing is 760
- Average score for buyers using conventional financing in which the loans were purchase by Fannie Mae or Freddie Mac was 755
- Only 1 percent of loans were offered to buyer with less than 620 credit score
- 75 percent of loans were offered to buyers with credit score of Continue reading »
By Brian Copeland
Anyone who knows my business knows I pride myself on strong counseling of all my clients prior to any signed documents. It’s the secret sauce of my business.
This week, I messed up…bad! During the hustle and bustle of NAR Midyear, I had a remote buyer counseling session. I was so busy that I condensed the normal hour-plus session to a smooth 25 minutes. One of the biggest parts of the session is discussing pre-qualification and lending process. Since the buyer had checked, “Yes, we are prequalified with undisclosed mortgage lender,” I took it at face value.
Last week the buyer came to town. We spent two days together. We were ready to go to contract. Buyer says, “Oh by the way, my lender can’t do loans in Tennessee.” They call a lender I often use. They can’t even think about buying a home.
While my initial response was to internally be annoyed at the buyer, after about two minutes of mental processing, I realized I had used a short cut in one of my core business values. I realized this was solely my fault. I am the professional. It is my job to prepare and pave a path of success for all my clients. Continue reading »