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New Orleans Condo Search, Your credit scores do matter when applying for a loan!

    Banks and lenders have been increasing the scores needed to get the best rates on loans in 2009.  The lower credit scores will make the loan more expensive via a higher rate and or higher charges.  If your score is below the threshold you may not be able to get a loan at today’s lower rates. 

     This means it a great idea to check your credit score out while you are still in the early stages.  A higher percentage of credit scores are wrong than you would think, so checked out early and get it fixed.  There are ways to make your credit score go up by reviewing your open lines of credits and mistakes which may not be yours.

     The best way to see a drop in your score is not to pay your bills on time.  You may be a nice person but this does not count with credit scores. 

     I would have your future lender pull your scores and go over them very, very early in the process so you will not have any surprises. 

     I had a client who had great credit until someone opened up various lines of credit for him while he was busy working hard off shore.  He had no idea as the bills were sent to a vacant lot.  He then found loans, bank accounts, and bills he knew nothing about that had been set up under his name.  The story ended quickly when the client could not buy anything for least 6 months while he cleared it up.  It may not be this major but all the points count.

     I had the opportunity to talk to Robert Tynes a loan officer with Whitney Bank in Metairie this past week.  He gave me some of the basics:  Your credit score and the down-payment are very important in figuring your interest rate.  The rules are changing rapidly as to who will get the lower rates that are now being advertised.

     Scores of 740 or more will get the best rates  and will have no extra charges.  The bottom scores for a conventional loan are in the 620 range with a decent down payment.  The interest rates become a sliding scale from 620 to 740 as to an increase in rates.  He also said the rules are changing rapidly so you need to keep updated and start the process early.

      He is doing more FHA loans as the scores are in the 580-600 for the one rates for FHA loans.  The down payment is around 3% which is a big help if you do not have a lot for a down payment.  With this loan the seller can also help you with your closing cost to a certain degree.  Gets complicated but that is why getting the loan process started early is more important than ever.  Shopping rates is not easy when you do not know where you stand.  Just be aware that many quotes are just teasers to get you in or to call.

 

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA