Buying a house in the New Economy - Advice for Buyers

Jean Chatzky, financial editor for the Today Show was on television recently to consumers about their credit scores to speak. She confirmed something I already knew, but supports it with some eye-figures.

In particular, the credit score you have been declared Jean for the best mortgage rates when buying a home into consideration. Here's how it broke:

* May 2006 - The borrower needs a loan of 620 to obtain the best prices.

* Required May 2008 - The borrower 760 or oneabove to the best prices.

This is an increase of 140 points, representing a significant difference when one considers that the global credit ranging only from 300 to 850th

Recent Economic Changes

Credit has always been important when buying a house and the application for a mortgage loan, but today it is more important than ever. To understand the reasons for this, we must look back in recent economic changes.

The subprime mortgage "meltdown" that launched in 2007 were far-reaching economic changes that we can still be seen today in 2008. Many banks went out of business, and lost thousands of Americans have their homes due to foreclosure. This caused a general tightening of credit conditions that affected consumers and businesses alike.

What does this mean for Home Buying

If you plan to buy a house in the near future, has this to do with you. As a result of these and other factors, the process of buying a> House on the market today is difficult. As I said earlier, you are a higher credit score for buying a home today than in the past needed, especially if you want quality for the best rates for your loan.

In addition, buyers with bad credit have fewer options today, as the subprime mortgage is virtually extinct. This makes the financial responsibility of the more important for the buyer in the modern economy.

So what is credit score for buying a home required in today'sEconomy? Well, this still depends on the individual participating mortgage lenders and their particular lending practices. But it is important to recognize that there is a big difference between the candidates for a mortgage loan and a good interest rate on the loan. For example, you could get approved for a mortgage with a credit score of 580 on. But you certainly will not get the best price at this level. This means that you pay more each month for as long as the loan.

According to the figuresJean Chatzky a few years ago you would have your score of only 40 points collected for the best interest to qualify - that is presented, it would benefit from a gain of 580 one 620th Today, however, you have to pay your credit-level increase by 180 points (580 to 760 to qualify) for the best prices. This is a big difference!

My advice to all buyers

The purchase of a home today need better credit than the buyers of, say, three or four years. The federal government isgreater pressure on the lenders. The mortgage borrowers are under consideration. And borrowers are under increased pressure to get good credit scores for loans in question.

All of this is unlikely for the foreseeable future. So, if you fall into the bad credit range, is my advice to you:

Do not buy a home until you get your financial "house" in order. Even if you get qualified with a low value, you will be a huge amount of interest on the loan to be paid. So instead ofRushing out to buy a house before you are ready financially, but to focus on improving your credit score. Pay all your bills on time. Reduce your debt. And start saving money - the more the better.

rehab eye of eternity top rentals