Janis Peterson, GRI, ABR, CSP Realtor®
Philadelphia Main Line Homes and Real Estate
Montgomery, Delaware, and Chester Counties
How critical a factor? Minor lapses will probably have little or no effect, however, buyers with serious problems may still qualify for a loan but may have to pay a higher rate of interest or provide a larger down payment.
There are three steps that a person with past credit problems should take before applying for a loan. First, request a credit profile from one of three major credit reporting agencies. In fact, it's best to request a report from all three, since not all creditors report information to the same agencies. TRW will furnish a complimentary copy once a year on request, at (800) 392-1122 or (800) 682-7654. Equifax (800) 685-1111 and Trans Union (312) 408-1050 or (800) 851-2674 will also furnish reports for a nominal charge.Second, the buyer should optimize his or her credit profile by citing prompt payment of rent, utilities, and other bills not reported on the credit profiles. The buyer should also be prepared to provide candid explanations for late payments to the loan officer. This is important because problems not reported by the buyer but discovered by the lender will reflect unfavorably.
Many lenders are understanding about one-time problems such as the loss of a job, a medical emergency, etc. Buyers with patterns of delinquent payments might want to consider adding six months or a year of flawless credit to their track record before pursuing their home-buying plans. Discuss this with your real estate agent. They can offer excellent suggestions.
So remember -- if you are thinking about purchasing a home, but are worried about your past financial record -- don't give up. There are solutions, such as lenders and agents, who are in business to help.
"Real Service in Real Estate." For a personal consultation on buying or selling real estate, Janis Peterson, GRI, ABR, CSP Realtor® can be reached at (610) 642-3744, e-mail: firstname.lastname@example.org. Prudential Fox & Roach Realtors® is an independently owned and operated member of The Prudential Real Estate Affiliates, Inc.
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