If Cash is King, then Credit is Queen…
March 24th, 2006 by Grant in: Investing…and you don’t want to make the Queen mad!
I quickly learned after doing my first real estate deal that your credit score is the most powerful tool you can have in your “investors tool chest”.
Before starting the real estate endeavor, my wife and I went to a mortgage broker to find out how much of a loan we’d qualify for. We gave them all of our financial documents, and told them we wanted 100% financing.
After a credit score inquiry, the broker came back and said we’d qualify for as much as we wanted, and noted that with our perfect credit scores of ~800, 100% financing would be no problem. The problem we faced is that few banks want to lend 100% financing on low sums. Another broker in the same office said that with lower scores, it is harder to get 100% financing without paying PMI or points.
Since then, I have been much more aware of the things that drive my credit score, and have strived to keep my numbers where they are.
It just goes to show that if banks can see you’ve taken care of your money and financial responsibilities, “qualifying” for a loan really isn’t an issue.
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