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Your Credit Score

I am in the process of cleaning up my credit score before trying to purchase a REO Home. I know with the present economic crisis now your credit score has to be perfect! Could someone give me an idea what score I would need to achive ownership

  • January 21 2009 - Pasadena
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Answers (2)

DBO4U,

You will be surprised to know that your credit score does not have to be perfect.  Now, more than ever, are people suffering from financial stress.  So it is understandable that the credit scores of the masses may not be perfect.  Today, underwriting looks at the whole profile, including income, assets, loan to value (down payment for purchases).

A perfect score may have been the most vital component of a borrower years ago, enabling a recent grad from college to get a stated loan at 100% financing.  The credit score was perceived to supercede the importance of income, asset and down payment/skin in the game.  And as we have seen, that type of perception led to the mess we are in today.

So today, we will look at your credit (perfect or not) and also look at all risk layers.  If you can show that your income can support your debts, your assets can cover lost income should you get injured, and you have enough skin in the transaction, you could easily qualify.  FHA, for instance, does score at the 580 range.

Hope this helped!
  • January 22 2009
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It really depends on what you are able to bring to the table.  If you have some money to put down you are in better shape.  Your best bet is to sit down with a mortgage broker and figure out your plan of attack. 
  • January 21 2009
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