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Monday, September 19, 2011

good to excellent credit scores

I saw in the news last week that home mortgages have reached yet another historic low. It is amazing how the housing market has changed over the past several years. In late 2006 through early 2007, home values reached a historic high. Then in the following years, home prices have largely declined all over the country. On more than one occasion, commentators have claimed that the downturn in the housing market was at an end, only to have prices decline even further. Perhaps one of the bright spots in all of this has been the opportunity for qualified purchasers with good to excellent credit scores to buy their first home.
In late 2008, my husband and I purchased our first home. We learned during the process that all of the historic, customary requirement for purchasing a home had earlier eroded, but were coming back. Fortunately, we had no trouble demonstrating our income, making a 20% down payment, and providing to the banks all of the documentation that they required. We also had combined credit scores in the low 800s. Thus, for us, the home buying experience was easy.
When we refinanced earlier this year, we were told that a credit score of 740 was the minimum requirement to command the best mortgage rates. Thus, I know that for anyone who has a credit score in that range – or better, obtaining a mortgage (or refinancing) would likely be a smooth, if not pleasant, experience. As mortgage rates for a 30 year fixed mortgage have now approached 4% and 15 year fixed rates are lower than 3.4%, now would be a great time for purchasers with great credit to consider getting into the market.

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