2009 is a great time to buy a home in Charleston SC! Interest rates are at all time lows, inventory of avialable homes is high, and prices have dropped to levels from years past. If you have even thought about buying a home in Charleston SC, NOW is the time tomake the move--whether you are a first time buyer or move up buyer.
This is the second in my series about credit--getting your free reports, understanding your reports, and improving your credit to be in the best possible shape when it comes time to apply for a mortgage. Lenders have tightened up their lending guidelines in the wake of the foreclosure wave and mortgage meltdown. It is even more important than ever to make sure your credit is in the best possible shape if you plan to buy a home in Charleston SC in 2009.
Ok, so you read my first post about going to annualcreditreport.com to get your three free reports and paying the $7 each to get your three scores. Now what?
Let me show you how a lender looks at your reports, what they are looking for, to give you some perspective.
You will probably have three different credit scores--this is normal. Not all creditors report to all three bureaus, and each bureau tweaks the scoring formula a little differently, so that is why you will probably see three different scores.
Scores can range from 400-800 (you can see scores that are above and below that range, but most will fall in there somewhere). What do they mean? Anything below a 580 is bad. This means you need serious attention. Above it, and you can play, but great credit is anything over 700.
Here is how the mortgage lenders look at it. To qualify for a mortgage, you need a minimum of a 580 middle score. Middle score, what's that? Well, when lenders pull your three reports and see the three different scores, they throw out the highest and lowest and go woth the middle score. That score needs to be at least a 580. Now, FHA and VA programs do not really have any minimal credit score requirements, but the worse your credit, the worse your interest rate and the more you will need for down payment.
This series is designed to help those looking to buy a home in Charleston SC in 2009 to get themselves the best prepared--that includes improving credit to assure that you will not have to worry about marginal credit, or any credit issues that will keep you from getting the best avaialable loan.
So, the target to shoot for is 700 or above. This series will help you get there. The whole point is to be proactive--get familiar with your credit and do anything necessary to improve it.
What else are lenders looking for? Stability. They will look at the last 2 years of your history--credit, employment, salary, housing.
The most recent information on your credit report carries the most impact on your score. Lenders want to see what kind of credit you have for the last couple years. Hopefully, anything derogatory is in the past.
They also want to see your employment history (for the last 2 years)--ideally, you have held the same job. If not, then they like to see the same line of work. Of course, if you changed fields, but you received a higher salary to do so, then this woulod make sense to a lender. They just don't want to see someone bouncing from one job to the next--remember, they are looking for stability.
They also like to see the same address for the last 2 years. If you moved in the last 2 years, it is not the endof the world! Again, as long as you don't show a history of bouncing from one address to another, that is what they want to see--stability.
Future posts will discuss credit and credit repair in greater detail. I will also discuss the rent to own option. For more credit and home buying info, be sure to check out your online resource to help you buy a home in Charleston SC in 2009!
You can also sign up for my FREE credit e-newsletter to receive weekly tips, just drop me an email.
Jeff McIlhenny is a licensed Realtor with Weichert Realtors Palmetto Coast in Mt Pleasant SC and serves the entire Charleston SC real estate market. You can reach him at 843-452-2953 or jeffm@weichertpc.com
Comments(0)