Fooled into satisfaction by the fact that they can make a larger down payment on a new home with funds received from the sale of their “old”, some sellers fail to address negatives on their credit reports and thereby suffer such consequences as higher interest rates and additional costs associated with obtaining their new home loan.
Simply put, Home Sellers should repair their credit before selling a home and buying a home. It’s easy to get out of focus when you concentrate on your current home’s selling price. Points, prepayment penalties and higher interest charges on your new home can easily erase all the profits you gained in the sale.”
There is a difference between strong credit and the credit needed to obtain a mortgage. Indeed, you can buy real estate with poor credit but you’ll pay higher, non-prime interest rates. Consider: a mortgage loan of $150,000, 30-year, fixed rate mortgage, interest rate of about 5.72% will cost approximately $870 monthly. With poor credit, the interest rate could easily exceed 9% costing over $1,200 in monthly mortgage payments. That means that, over the course of the mortgage, you could pay the price of a second home in mortgage payments simply because you didn’t take the time to repair your credit.
To review your credit rating, check www.annualcreditreport.com
To repair or improve your credit rating, visit www.CreditRestorePros.com
When buying a home or selling a home good credit can be a big difference in mortgage payments which could help you buy the home of your dreams or purchase an additional property, so do what you can to have the best possible credit rating.
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