An Important Score
Following the recent turmoil in the financial markets, many lenders have taken a more frugal approach. Loans are not as easy to come by as they were just a few short months ago.
You can make yourself a more appealing mortgage candidate by increasing the amount of your prospective down payment and improving your credit score. Sustained employment, sizeable financial reserves, manageable debt and a history of solid credit is an impressive combination, no matter what type of market prevails.
 Let's take a look at the very important credit score, also known as a FICO score. This is a number, generally between 300 and 850, that indicates how much risk is involved in lending you money. It is based on your credit history and is determined using a statistical model.
There are many articles and web sites dedicated to helping people improve their scores. Take the time to research which methods apply to your situation and might work best for your financial profile. For instance, if an unusual amount of debt is the reason for a low score, look for ways to mitigate that problem. Perhaps consolidating the amounts would help. Or maybe targeting one specific amount and paying that off is the answer. Ask your real estate professional or bank to recommend a credit counselor to help you develop a plan of action.
But perhaps the most important step to improving your credit score is developing the right attitude and committing to the cause. Credit scores do not improve overnight. You need a careful and steady approach and plenty of discipline to achieve your goal. You may need to put off certain expenditures and cut back on spending to reshape your finances. But if homeownership is your goal, crafting a good credit score is essential to putting those house keys in hand.
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The fact is there are many steps along the way to a closing and each has a professional who must be paid for her time and expertise. These expenses often fall under the general heading of "closing costs." These four items are some of the safeguards required by lenders who want to verify that the property is worthy of the loan. 1. Home Inspection: Most contracts include a contingency that requires a property to pass inspection. 2. Appraisal: The mortgage company also wants to make sure the home is worth at least the amount you agreed to pay for it. An appraisal by a third party determines the fair market value. 3. Survey: A professional survey of the property is often required to verify the boundaries and other property characteristics. 4. Title Search and Title Insurance: Your lender will hire a company that determines who is the legal owner of the property in question. The lender wants to verify that you are buying from the rightful owner and there are no liens or other claims to the property by other parties. And to safeguard against any oversights in this review process, an errors and omissions insurance policy is also secured. For more information about other closing costs, ask your real estate professional or lender.