Daily Real Estate News  |   February 7, 2008  |   Credit Repair Eases Home Buying
Anyone who is contemplating buying real estate should first consider a financial housecleaning.

Getting a mortgage has gotten more difficult, even for people with excellent credit. So it pays for potential buyers to examine their credit history.

Here are some smart steps to suggest potential buyers take:

Get a credit report. Credit reports are available free at Annualcreditreport.com. Examine it for incorrect information, such as closed credit accounts or debts belonging to someone else with a similar name. Address any problems such as delinquent bills.

Credit score improvement. It takes a credit score above 680 to get a mortgage. Scores higher than 720 rate better deals. Expect to pay a surcharge on credit scores lower than 680.

Consider FHA loans. FHA borrowers pay a small insurance premium, but only a 3 percent down payment. Borrowers must have a steady job, be able to verify income, have a record of paying bills on time and keep the loan amount to no more than 31 percent of gross income.

Avoid jumbo loans. Conventional loans are significantly cheaper than loans above $417,000.

Source: The Boston Globe, Andrew Caffrey, Binyamin Appelbaum (02/03/2008)