buying a house 2

Uploaded by dlagrou on 07.09.2010

Now the mortgage process has changed a lot in this country especially over the last couple
of years as a result of a lot of things that have happened in our economy. So what I tell
first time home buyers in particular or someone that’s new to this country is think about
a mortgage as the CIA. And that’s not the Central Intelligence Agency which you may
be familiar with but it stands for three things that are very important and it’s really
the fundamentals of the mortgage process. The first one is credit. You must have credit
when you come to this country in order to buy a home. Now if you have credit established
perhaps where you live now through credit cards. Maybe you even have a mortgage in your
own country. Other types of debt, perhaps an auto loan, all of those types of things,
even rent a lot of times we’re able to use, is something we can use in order to show that
you have had some previous credit. But in addition to that, typically you need two or
three other types of trade lines or credit lines in this country before you can get a
mortgage. That can be a credit card. It can be an auto loan, other types of debt as long
as it’s captured by what we call the credit bureaus and recorded on your credit report.
This is very important because now in this country you need a fairly high credit score
in order to get a mortgage. And the score is determined by how you pay on your credit,
how many different types of credit lines you have, and how much excess credit you have
that you’re not using that you could. So, for example, you might have a ten thousand
dollar charge card but you only owe five thousand on that card. That means you have fifty percent
or five thousand dollars more you could draw if you want to. The more you have available
to draw, the higher your score is going to be. So credit scoring is a very complex process.
It’s referred to sometimes as the FICO model which stands for Fair Isaac. So if you hear
that, that’s what it’s referred to as. So that’s one of the most important things
to figure out when you come here if you want to buy a home is do I have credit, do I have
enough credit, and what do I need to do to begin moving that forward?