Your best friend in real estate?
It’s your credit
I always have my buyers get familiar with the 4 C’s of building credit so they’re prepared to receive the best loan terms possible.
Credit: This is a reflection of your financial past. Do you consistently make payments on time? If yes, lenders perceive you as less of a risk and more likely to approve your loan application.
Capacity: This is your ability to repay a loan based on your income and employment history. It’s not just about having the funds but also about a track record of financial stability.
Capital: Assets or cash reserves can be used to repay your loan if your income isn’t enough. It’s like a safety net that lenders look for when deciding whether to approve your loan.
Collateral: This is something of value that you can pledge as security against the loan. In case of default, it can be seized by the lender. In the context of real estate, the home itself often serves as collateral.
Good credit is essential because it directly impacts your mortgage approval prospects, competitive interest rates, and down payment requirements.
On the other hand, a subpar credit score can make securing the best terms challenging, but don’t be discouraged if your credit isn’t perfect right now.
Building a strong credit takes time and dedication. Small steps can lead to significant improvements.
If you have questions about how credit affects real estate financing or need guidance on improving your credit score, reach out to me and I can send over some resources!
| DEBBIE SPENCER GROUP |
| REALTOR®, CRS, SRES |
| m: 617-285-7300 t: 781-860-7300 e: debbie@thedebbiespencergroup.com |
| 1 Militia Drive, Suite 204, Lexington, MA 02421
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