Lowest credit score to buy house
Here we are, end of third quarter of 2010. Things are not looking too good. The absolutely lowest credit score to buy house in 2011 will likely stay at 620. I know many of you, especially realtors and lenders, are getting very restless and want government play that old game, by bringing the lowest score to 520. Good old days of real estate craze. Credit? Who needs it, will do your loan, no problem and everyone will be getting rich again.
On the other hand, after watching 2012 movie, why would you even want to buy a house. But jokes aside, do not expect any relaxation of lending standard anytime soon. With the public mood shifting to frugality and responsibility from change and hope, you will not find many politicians who are willing to push for lighter lending standards in hopes of giving the very gloomy housing market some support.
Not only the lowest credit score needed to buy house will very likely stay the same, the home prices will go lower as well, by about 10%. Which is actually somewhat good news, because I think, we will finally see the bottom. Yes, I said it. Forget Marc Faber, I am the doom and gloom guy compare even with him. And I am saying that we will probably see the bottom, sometime in the end of 2011. The bad news unfortunately, that bottom will more than likely be a temporary one. It will be a rather shaky bottom, sort of like a support in stock market. With the wrong economic conditions, such support can easily break. The worst news are that we will almost certainly meet those conditions.
With that said, you should look to improve your finances and raise your credit scores. Stop fretting about the lowest possible score needed to buy a house. Do something to improve it. You can find plenty of sound advise and how-to on my blog. The credit score will affect your interest rate on the mortgage you can hopefully secure. Basically, lenders have the scale that penalizes you for lower credit score. It starts from the lowest 620 and goes up to 750. Once you score is north of 750, it has virtually no effect on the interest rate. Between 750 and 620, expect close to .20% increase every 20 points down the scale. If you get 4.5% with 720 credit score, the 700 score would bring 4.7%, 680 would result in 4.9% and so on. Of course, other factors like the size of your down payment, your liquid assets and you income will either make matters better or even worse.
Sat Sep 25, 2010 08:09AM | Copyright: www.bad-credit-advisor.com | More in Credit Score Help | Comments (0)
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