Real Estate and Good Credit Scores

Whenever anyone applies for a mortgage to buy real estate, the lender wants good credit scores. This condition leaves many applicants duly frustrated as they don’t possess what is called a ‘good credit score’. According to Experian your lender will most likely see a good credit score in his credit score model if you also have a good credit score.

This brings us to the next and most important question. What is a good credit score? This can mean different numbers depending on the credit bureaus and the loan officers. However, generally most lenders use the FICO scores when considering mortgages. According to FICO 45% of Americans have a credit score ranging from 700 to 799.

Credit Report


Anything higher than 799 is deemed excellent. Most lenders used to offer a home loan for a credit score of 700, although presently, the minimum required by many lenders to give the lowest mortgage rates is 740. Additionally, what is considered as a good credit score differs from the criteria of each loan officer. Some lenders might consider 800 to be a good score, while others might see 740 as a good score.

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Why do you need a good credit score?

Your credit score tells the lender some important information about yourself. They will be taking a huge risk by lending you money. Your credit score and your credit history will show them how responsible you are in handling your finances. It tells them:

  • whether you meet your commitments
  • whether you make regular payments
  • whether you max out your cards
  • whether you are a risk to the lender

These information will help him understand if it is profitable for him to give you a mortgage as they are more interested in knowing if there is a likelihood of your mortgage being repaid.

How will a good credit score help your mortgage application?

A good credit score tells the lender you are a financially responsible person while it also brings many benefits to you when negotiating a mortgage. An exceptionally good credit score like more than 800 means:

  • You can get lower interest rates and
  • you can get better options

A score more than 740 and less than 800 will get you competitive interest rates and make you eligible to receive the best deals available. Depending on the lender, you can also receive the same perks given to those with a score greater than 800.

CreditScores real estate

If you have missed a good credit score by a few points, here are some factors you should consider before taking remedial action.

  1. Analyze and discover what you did incorrectly. A closer look at your credit report will show when an activity or a transaction negatively affected your credit rating. For instance by purchasing a particular product like a washing machine, with your credit card could have maxed out your credit card. Studying the causes and taking action to pay back the same within 30 days will improve your credit scores.
  2. Identify inaccuracies in credit report: – any inaccurate information must be brought to the notice of the credit bureaus and proved with supporting evidence to rectify the same. Correcting a discrepancy can improve your credit score to a certain extent.
  3. Increase available credit. The percentage of available credit to your credit limit is vital to the lenders. You could either get an enhanced credit limit or take necessary action to repay balances.

If you don’t have a good credit score, you should make haste to rectify your mistakes so that you become eligible for a mortgage. To check your scores you should order your free copy by visiting or call 1-877-322-8228. Alternatively you can fill out the Annual Credit Report Request form and send to:

Annual Credit Report Request Service,
P.O. Box 105281,
GA 30348-5281

Why Negotiating Debt Settlement is Better than Defaulting

People who are experiencing financial difficulty are faced with the dilemma on how to deal with debt.  They can either opt to settle a debt or, they can choose to default on it.  Any which way you look at it, in the long run, negotiating debt settlement is better than defaulting.

Defaulting on your debt means that you are one month or more behind in your monthly payments and that you have continuously failed to settle the minimum dues indicated in your billing statements.  You may already have received collections letters or follow-up calls due to this delays in payment or for nonpayment at all.  You have placed yourself in a situation where your debt becomes due immediately and in full.

settle debtsYou are also defaulting when you declare bankruptcy or when you have violated any of the terms and conditions agreed upon with your credit card company or lending agency.  Failure or neglect to pay and settle your debt could lead to more serious consequences for you, unless you’ve considered negotiating debt settlement.

Any delay in making payments and any failure to settle debts reflect unfavorably on your credit standing.  You lose your credibility with your creditors, and you lower your credit score.  Filing for bankruptcy is often misunderstood as the easy way out but it is never so, because you badly damage and destabilize your creditworthiness for the next 20 years.  That is so much worse than the humbling experience of being straightforward and negotiating debt settlement as early as possible.

The next 20 years is nothing compared to the way you will be forced to live and face your life a day at a time.

You may be denied certain privileges.  With your bad track record, your accounts with insurance and credit card companies would not be renewed.  Aside from that, all your loans would keep escalating at higher interest rates.  With the option of openly negotiating debt settlement in an attempt to restructure and consolidate your loans, you would be able to make regular payments to maintain your credit standing while you keep interest rates low and fixed.

You will lose your credibility with your employers.  A poor credit standing due to defaulting on debt would keep you from getting promoted.  In the first place, it will keep you from finding a good job, because most employers do a thorough background check before hiring.  No matter how qualified you really are, you cannot be considered for any position if you do not have the creditworthiness which reflects on your basic trustworthiness as a person.  On the other hand, promptly negotiating debt settlement clears the slate for you.

You could lose your home if you are renting or buying a place.  Apartment landlords and real estate sellers double-check on your credit reports before they lease or sell a house and allow you to move in.  A bad credit standing implies that neither will you be conscientious or regular in your rent or mortgage payments.  In contrast, smartly negotiating debt settlement makes loans available to you.  Settling unsecured loans like credit card payments entitles you to approval for secured loans like mortgages and short term installment loans.

Simply put, negotiating debt settlement is the better option for you because it is the more credible one.

Ways and Means to Lower My Debt

If I want to eliminate overwhelming credit card debt from my life and my language, I will have to devise ways and means to lower my debt.

First I will have to come to terms with the current state of my finances. I must understand what my monthly statements and bills are saying on one hand and what my bank books and pockets are saying on the other.  Each of them has their own vested interest in my life, but all of them will agree that it is time to lower my debt.

inforgraphic lower debt

If we are to be honest with ourselves, our current state of finances is that we are dependent on several credit cards in our wallet.  At this point it would be good to establish what credit card companies we owe money from, how much we owe them separately and collectively, and what interest rates apply to each.  From there on, we should set our priorities by making bigger, regular payments on that account with the highest interest and maintaining full, timely payments on all the rest.  As a rule we should never go below the minimum required, and as much as possible we should never be late with our payments.

Because ATM machines dispense money so efficiently and conveniently, it would be so tempting for me to make a quick cash advance from my credit card and justify the usage as a necessity or an investment.  But because I want to lower my debt, I will fall in line at the ATM machine less often and only when I really need to.

Our cash advances are meant to be used at an hour or need. They are our emergency back-up of funds. Those big purchases can wait for a better time when we can afford to spend and not borrow. We just have to start living within our means and spending within what we are actually earning. Otherwise, we will never get out of debt, only deeper into it.

Easy to say but hard to do, I will lower my debt by saving for a rainy day.  It seems that with all the expenses there is never enough even to set aside, and money simply flows through your fingers.  But it take guts and willpower to hold on a little tighter to your resources and start saving up what little excess you have.  Call it something you can really bank on.

We always associate the concept of saving with setting aside extra money.  However, savings can also figure in terms of cost-cutting measures.  Spending less means saving more, right? It means switching off the lights when they’re not being used to save on electricity or planning our trips and errands around a schedule to save on fuel.  It is not always a matter of having extra but more a matter of making extra.  The issue on saving should not be regarded with a feeling of dread but more with an attitude of anticipation.  The difference we are creating is all for the better, and the effort will all sum up to something productive for us.

If I want to lower my debt, I will devise more ways and means than these. I will simply have to take charge of my life, and so will you.

If you want to learn more, here’s a great resource.

Thinking about making a change?

This segment is dedicated to helping you make the best informed decision about selling when you have the option to have some forsight.

Remember, “Risk comes from not knowing what you’re doing”, Warren Buffet.  In a normal situation, there is no risk that you could loose money on the sale of your house unless you don’t know what you are doing.

changeSometimes, whether or not you should sell is not a question: Your job has been relocated, the loss of a job is making your home no longer affordable, the birth of a new child has made the home too small… When you are faced with a situation like this, you may not have the liberty of asking yourself if you are ready to sell.

1. First and foremost you must look at the deal as just that, a deal.  Your property has been your home for so many years, it has sentimental value to you.  You don’t want that family with the large dog to buy it because the dog will just tear up the hard wood floors, right? WRONG.

big jumpThen, after months of having your home on the market, showing after showing, you no longer are so picky about your buyers because now you’re desperate to sell.  Another good time to remember that you are just trying to get a deal going.  Buyers smell desperation.

Also, make sure that you abide by the HUD fair housing laws.  It’s not worth a law suit.

It may sound silly, but we’ve seen it time and time again where the seller has blown some of their best chances at selling because of emotions.  If you are having problems detaching yourself from the “deal”, having a third party such as a Realtor or real estate attorney may be the right way to go for you.  Feel free to skip ahead.

2. Selling a house takes months, even after you’ve finally got an agreed upon contract.  Knowing all of the steps and understanding what lies ahead is imperative.  If your caught by surprise you may also be taken advantage of.

  • First there is the decision to sell
  • Actually putting your house up for sale
  • Where to advertise
  • How to market
  • What price
  • Showing
  • Getting a contract (who has the proper paperwork)
  • Working with buyers you may not personally like or trust
  • Are the buyers really able to get a loan?
  • Inspections
  • Surveys
  • Title searches
  • Appraisals
  • Handling the legal issues
  • Closing?
  • Moving
  • Taxes?

Work through each step and again ask yourself.  Are you ready to sell?

Once you feel confident that you know what you are doing or have someone on your side you does, you are ready to start selling.  There is a lot of emotion and money involved.  Make sure that you have gone through each step mentally.

Always stay in control and you’ll be a winner.

Buying a home

home buyingI would like to share some thoughts about buying a home, making the best deal and then moving in. Sounds easy and you will find a lot of work goes into getting the home you want. If you understand the process, success is easier. Do your homework and become an educated buyer. Determine what you can afford.

First make a game plan, Figure out what you want, what your needs are, your credit, and your finances. Even if your credit is excellent it is important to order order a copy of your credit report. Interview Realtors and find a Realtor with an ABR designation. That is the Accredited Buyer’s Representative. It is a certification that states they have special training in how to reepresent buyers. The course and their experience qualifies them to be a buyer’s representative. Once you have found your Realtor with an ABR, you are ready to move forward.

Talk with a mortgage broker and find out what you want to spend. Put into process the loan prequalification. This often takes time and it is important to have this taken care of so when you find the home of your choice, that piece is already taken care of.

Then choose a neighborhood. I find my buyers educated and informed due to the internet. The more homework you do, the more time you save.

Finding your dream home and making the offer. Negotiating. Making the best deal for you.

Once the offer is presented to the seller, there is a window of time from a week to ten days to get the home inspected.