In today’s Orange County Real Estate market, it’s no secret that we are in one of the most competitive Real Estate markets in decades and many home buyers are asking the same question “Do I NEED good credit and cash to buy a home?” the answer to this question is yes and no.
Why You Should Have Good Credit and Cash
In the 2013 Real Estate market, lenders are searching for qualified homebuyers who have a great FICO score and cash for down payments because, they want to stay away from the bad lending practices that caused the recent Real Estate crash.
With good credit and cash for a down payment, a homebuyer in Orange County can qualify for a great mortgage interest rate and pay less money on their mortgage loan over time, which will ultimately help them to pay off their home faster.
Why You Don’t Need Good Credit and a Large Down Payment
On the flipside of this Real Estate market, there are plenty of homebuyers who are able to purchase homes even if they have FICO scores that are between 600 to 620, and a down payment as low as 3.5% thanks to FHA loans and HUD.
What’s even better is that Veterans are able to buy homes with no money for a down payment if they use their VA loans. That means it is possible for a homebuyer in today’s Real Estate market to buy a home without having to come up with a sizable down payment, or having great credit, to qualify for a home loan. That doesn’t mean that just anyone can get a loan however. Coming off the worst housing crisis in 80 years lenders are still prudent in who they give loans to, but you may be able to purchase a home without both of those criteria.
Sound Financial Judgment Will Pay Off
Regardless if you have good credit, okay credit, a large down payment or a small down payment for a home, it’s always important to make sure that you practice sound financial judgment before buying a home. This includes: paying off credit cards or any excessive debt (if possible), pulling your credit reports to look for negative or erroneous items and establishing a budget so you’re not spending more money than you have coming in each month.
To learn more home buying tips or to view the latest Orange County homes for sale, contact Fred Sed & Associates today by calling us at (949) 272-0125.