Home Buyer and Credit Survey

Experian recently released their Experian Home Buying and Credit: Survey Report, 2015.
Results are based on answers provided by buyers that purchased a house in the past year or plan to purchase in the next year.

I’m sure everyone who reads/looks at this report will get something different out of it. Here’s what I found most interesting.

The survey found that “more than two in five future buyers are worried that they will not qualify for the best home loan rate and have delayed purchasing to improve their credit.” The survey goes on to say that 55% are working to improve their credit to qualify for a better home loan rate.”

Here’s the thing, interest rates are really low – still. They have been for several years now. A 4% or 4.5% mortgage is nothing to squawk about. Interest rates fluctuate and waiting a few months to bump up a credit could cause more harm than good should rates continue to rise (and they will). That great interest rate you are working towards getting today may not be there tomorrow or next month or the month after.

If you find a loan program that can put you in a monthly payment that fits your budget, would that work?

Another factoid I found interesting is that only half of recent buyers reported “checking their credit as soon as they considered purchasing a home.”

Buying a house is scary. It is a big step; one of the biggest steps adults take in life. Delving into credit can be scary as well – especially when you aren’t sure what will be on that report.

Here’s what Experian found though….43% of recent buyers had a better credit score than expected, and 30% were surprised by their credit. So odds are pretty good your credit is not as bad as you think.

You know what they say, we are our own toughest critic….

Checking credit and getting qualified for a mortgage are the first steps in taking the leap to home ownership yet according to this survey 67% of future home buyers are not pre-approved. Here’s the deal, finding a house on Realtor.com or Zillow is not the first step to home ownership. Getting qualified for a mortgage with a lender is your first step. Here’s one thing that could happen: Say you put the cart before the house and find an agent that will take you house hunting without a qualification letter from a lender (this is not likely but it happens from time to time). You could see a house, fall in love with it, want to write and offer, call a lender and find you do not qualify for a house in that price range . Deflating to say the least.

So if you’re considering buying your first home. Do your homework. Pull your credit, and call a mortgage lender before you start scrolling through home sites. Don’t know how to read your report or don’t understand something on it? That’s ok. A good lender can help you understand what’s on your report and help guide you in the right direction if improvements need to be made.

If for some reason your credit score is not where it needs to be to qualify, at least you know and can begin working on correcting the item or items that are holding your score down and you back from purchasing your first home. Building a credit score does take time but not as long as you may think once the repairs are made.
Knowing is half the battle. Taking steps to correct past mistakes leads to victory. But again, Experian found that 43% of recent buyers had a better credit score than expected, and 30% were surprised by their credit. So please, don’t let what you don’t know hold you back from taking a step forward – in home buying or life.

 

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