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Jim Armstrong's Blog

By Jim Armstrong | Broker in Salem, MA
  • Common Myths About Credit When Buying a Home

    Posted Under: Home Buying in Salem, Financing in Salem, Credit Score in Salem  |  October 6, 2011 7:15 AM  |  323 views  |  No comments

     Whether your annual earnings range well into six figures or are on the more modest end of national salary averages, you know you'll probably need credit to buy a home. While you likely know how important credit is to your home-buying plans, you may not be aware of the truth behind some common credit myths.

    Myth: If your bills are paid and you've never defaulted on a loan, mortgage or credit card bill, you don't need to worry about your credit report or credit score.

    Truth: Many factors influence your credit score, and payment history is just one of them. When calculating your score, credit bureaus also consider length of credit history, types of credit used and ratio of credit available to credit used. Even if your payment history is good, scoring lower on one of the other factors could lower your overall credit score.

    Myth: As long as you know your credit score, you don't need to look at your credit report before applying for a mortgage.

    Truth: A lender will certainly look at your credit report, so you should know what's on it before they do. Errors may occur on a credit report, and if there are any negative marks on your credit history you'll want to know about them - and address them - before a lender asks.

    Myth: Checking your credit score is a hassle, and it can't really help you manage your credit in the long run.

    Truth: Websites like FreeCreditScore.com make it easy to check your credit score. Keep in mind that lenders use a variety of scores when evaluating credit worthiness, and the one you obtain online will vary from what a lender might see. Still, any score can be a valuable educational tool that helps you better understand how lenders view your credit. FreeCreditScore.com's Credit Score Center can help you understand how your score is calculated, which factors impact it and the best time to apply for credit.

    Myth: If your credit is not perfect, you won't be able to get a mortgage.

    Truth: Lenders are more strict than they've been in the past and a good credit score and report can certainly make you a more appealing prospect to them. However, a score in the lower range doesn't mean you can't get a mortgage at all. But a higher score is likely to net you more options - and better terms.

    Myth: When you apply for a mortgage, the lender could share your personal information (including your credit score and history) with other companies.

    Truth: The law limits how banks and other financial institutions can use your information and to whom they can disclose it. If you're not sure how a lender may use your information, ask. Depending on the situation, you may be able to limit disclosure of your information.

    Re-published from: http://www.witchcityhomes.blogspot.com

  • Fewer Home Owners Are Under Water

    Posted Under: Financing in Massachusetts  |  August 17, 2010 11:07 AM  |  231 views  |  2 comments
    Fewer Home Owners Are Under Water
    In the second quarter of 2010, 21.5 percent of borrowers owed more than their homes were worth. That’s down 7.7 percent from the first quarter of the year when 23.3 percent of home owner with mortgages were under water.

    Much of the improvement came from homes falling into foreclosure, wiping away negative equity. Rising home values also improved the situation in 45 of the metropolitan statistical areas, including the northeast region of the United States.
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