Sunday, February 19, 2006

First-Time Home Buyers - Financing - Credit
The Seattle Real Estate Blog II

Buying a home is easier than ever for first-time home buyers in the US. With the availability of zero-down loans, interest-only payment options, low interest rates and simplified loan applications, it makes little sense for most long-term renters to keep paying rent instead of paying for their own mortgage.

Until a few years ago, most people needed to make a 20% down payment and could only borrow 80% of the value of their home. Now almost all home buyers qualify for 10% down, 5% down and zero-down payment programs. The higher your down payment, the lower your interest rate will be. However, there are many factors that affect the interest rate on your loan.

The greatest factor affecting your interest rate is the almighty credit score. The federal government now requires the three big credit reporting agencies (Equifax, TransUnion and Experian) to provide you with a free copy of your credit report once each year, and it does not affect your credit score to take advantage of this. If you're thinking about purchasing a home, you need to know what your credit report looks like. There might be items in collections that you're unaware of, like a parking ticket that blew off your windshield before you found it or a forgotten phone bill your ex-roommate never paid. You need to get these items taken care of before applying for a loan. Unfortunately, the free credit report does not include your credit score, but you can purchase your score when obtaining your free credit report.

The best loans are available to people who have credit scores higher than 715. People with credit scores over 700 also qualify for prime loans, and anyone with a credit score of 680 can take advantage of zero-down and interest-only loan programs. Factors that affect your credit score include the amount of debt you have in relation to your credit limits and the minimum debt payments you're required to make each month in relation to your gross income.

The most important thing you can do to prepare for purchasing a home is improving your credit score. The simplest way to improve you credit score is to pay off debt, but there are many other ways you can improve your score. A good mortgage lender or a qualified financial planner can provide indispensable assistance when you're planning to purchase a home. Help with your credit score from a mortgage lender is usually complimentary, though they will hope that you continue to work with them throughout the home-buying process. Financial advisors usually work for a fee, and they can also refer you to a qualified lender who will help you get the best mortgage available for your individual financial goals.

There are two highly qualified people I can refer with confidence:

Ruby Grynberg is the owner and chief loan officer at Salmon Bay Community Lending. She offers complimentary courses on home purchasing for people with a variety of unique circumstances, like small-business owners and first-time home buyers. She's a broker who has access to hundreds of various loan products and is experienced at working with individuals at all levels of the real estate market. Contact Ruby through her email address or the telephone numbers listed on her website if you would like to discuss credit and home financing in greater detail.

Jessica Hale is a very talented financial planner with years of experience helping people achieve financial security. Like Ruby, Jessica has worked with individuals and families at all levels of the economic spectrum. Jessica can help you develop an overall financial strategy that includes eliminating debt, purchasing a home and ensuring a positive future for you and those who depend on you. Contact Jessica through the telephone number listed on her website if you would like a complimentary one-hour initial consultation.

Later this week we'll post more information regarding various types of financing as well as specifics for first-time home buyers. We want to provide the information you need, so please post a comment if there are any specific topics you would like to see discussed. You can also contact us or get more information at


At Thu Mar 16, 11:28:00 AM PST , Anonymous doc said...

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