Wednesday, February 25, 2009

Bad Credit Can Ruin An Opprotunity to Purchase Your New Home

Bad credit or low credit scores can keep you from purchasing a home. Realtors try to educate prospective buyers to plan ahead, when thinking of moving. Financing rejections will bust your offers to purchase and high interest rates will make for very unhappy buyers, on what should be a great time of life.

Realtors encourage buyers to pre-qualify for a loan before looking for a new home. Even better than a Pre-Qualification Letter is a Letter of Commitment. Lenders will provide LOC only after all required applications and supported documentation, (W-2, tax returns, etc.), are approved through the lenders underwriters.

So first, plan ahead. Buyers would be best served by knowing their credit scores before attempting to purchase, so that the best interest rate possible can be obtained. Mistakes on credit reports can result in denial of loans. Fortunately, consumers rights are protected under the Fair Credit Reporting Act. This act gives consumers the ability to correct, update, amend and take action regarding the contents of a credit report. Credit bureaus report the information they are given by creditors, which are not verified. When an error occurs, the burden rests on the consumer. Disputing or correcting the errors require knowing what the problem is... writing a detailed letter explaining problem, and provide documentation supporting the discrepancy. So, checking your credit report for accuracy is available for free at
www.annualcreditreport.com

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