• calendar_month August 23, 2024
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Having good credit is crucial when looking to buy or lease a home. As a real estate professional, I often emphasize to potential buyers the significant impact that credit scores can have on their ability to secure favorable financing or lease terms. Financial literacy should be at the top of your list before you start your home-buying search. 

When you have a high credit score, lenders see you as a low-risk borrower. This perception opens doors to better mortgage rates, which can save you thousands of dollars over the life of a loan. Even a small difference in interest rates can significantly affect your monthly payments and overall affordability. For example, a buyer with excellent credit might secure a half a percent lower interest rate than someone with fair credit, leading to substantial savings.

Good credit isn't just about securing a mortgage. It also plays a critical role in leasing a home. Landlords often check credit scores to assess the reliability of potential tenants. A strong credit history can make you a more attractive candidate, giving you a competitive edge in tight rental markets. It also can reduce the need for larger security deposits or co-signers, making the leasing process smoother and less stressful.

If your credit isn’t where you want it to be, it’s wise to start improving it before you begin your home search. Paying down debts, making payments on time, and correcting any errors on your credit report are all effective strategies. Remember, your credit score is a powerful tool in the home-buying or leasing process, and improving it can enhance your financial flexibility and help you achieve your real estate goals.

If you are someone who likes to pay cash or doesn't believe in credit cards because you don't want to have that monkey on your back or don't want to have outstanding balances or be tempted. Keep in mind that not having a credit history or limited trade lines for the credit bureau to evaluate your paying habits is just as bad as having a low credit score. As a result, you probably want to get your score into the 700 for lenders to extend a sufficient amount of credit for you to buy or lease, get a car loan, etc... 

Let's talk about your credit score and how it affects your buying power. Give me a call (310-488-2592) so we can work on a home-buying plan for your dream home.