CREDIT SCORES
Preparation for buying a luxury home in Maryland or Virginia
Your financial life is reflected by your credit report and your credit worthiness is reflected by your credit score. If you've paid all of your credit card, store accounts, furniture accounts, automobile payments and mortgage payments on time for a period of approximately two years, you should have a very respectable credit score. Companies such as Fair Isaac compile your credit history as reported to the credit reporting agencies, Equifax, Eperian and TransUnion and through the use of unique and secret algorithms, produce a score that reflects your credit worthiness. Length of credit history, amount of credit, timeliness of payments, percentage of limits charged are all examples of factors used in determining your credit score.
For purposes of purchasing real estate in Fairfax, Alexandria, Loudoun counties in Virginia or Montgomery, Howard or Anne Arundel counties in Maryland, the higher your credit score, between 400-900, the lower the interest rate your lender will offer. With the exception of FHA or VA loans, few borrowers without significant down payments will be able to obtain a conventional loan with credit scores of less than 630. Rates will be higher for borrowers with credit scores of less than 720. On the other hand, borrowers with credit scores over 770 will be approved quickly with little attention paid to LTV.
Almost all credit providers; banks, stores, finance companies, mortgage lenders and credit card vendors extend credit to applicants based on the credit score. So, it is in your interest to obtain a copy of your credit report as soon as you make the decision to buy a home in Maryland. Lenders will pull your credit report prior to giving you a rate quote. So, it's best, especially if you have had credit problems at any time in the past to review your credit report for accuracy prior to making a mortgage application.
In Maryland, home buyers will have to have a preliminary lenders letter in order to make an offer on a house. So, be prepared with a good credit report prior to making home purchasing decision. Your Homefinders.com buyers agent will assist you in obtaining a preliminary lender's letter and you'll be ready to find that special home.
Happy home hunting.
JUMBO CONVENTIONAL LOANS
These loans conform to the Fannie Mae guidelines for eligibility, meaning that, on average, the buyers may devote up to 28% of their before tax income to housing. These loans generally require a down payment of at least 5%. In exchange for a slightly higher interest rate, the lender will lend you money with no down payment and will even pay your closing costs. The higher interest rates are deductible and are often a good buy for folks with good income, good credit and little cash. CONTACT US for more information about Jumbo or Super Jumbo loans.
Many luxury home buyers have substantial cash to invest in their home purchase, 10-20% down payment money being the most well known amounts. However, many home buyers understand that they can leverage their home purchase if it is more advantageous to keep cash and not reduce the mortgage amount. Enter the INTEREST ONLY LOANS. These home loan instruments have become very popular for luxury home buyers because home buyers understand that the property will appreciate at a fairly good annual rate in the Maryland and Northern Virginia real estate market.
WE CAN HELP
When you work with a Homefinders.com buyer's agent, we will make sure you are offered the best loans available for your individual needs. We work with experienced lenders who will get the job done for you.
More about mortgages and first time home buyer help.
Luxury Homes in Maryland and Virginia
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