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I applied for a home loan and was approved, but was given a rate of 10% that I know is very high. My credit score was a 600. Should I clear out some things in my credit and boost my score and try again in a few months, or should I continue to purchase the home in which I have a contract at the going 10% interest rate and refinance in a year or so?

14 Thoughts on Should I purchase a Home now or wait and approve my credit score?
  1. Reply
    Student
    August 28, 2011 at 8:04 am

    wait!!!!

  2. Reply
    amberbamber
    August 28, 2011 at 9:04 am

    Try to improve your credit score a bit….10% is WAY too high and the homes will contine to go down in price for a bit. It shouldn’t take you more than a few months to improve your score.

  3. Reply
    mel
    August 28, 2011 at 9:34 am

    forget the credit score hoopla. the more cash you have to put down on a house, they less risky your loan is, and the lower your payments will be. simple economics. your “score” is not going to mean much.

  4. Reply
    raysmithson1
    August 28, 2011 at 10:01 am

    you should get a better rate like 5 or 5 1/2%

  5. Reply
    Tim M
    August 28, 2011 at 10:27 am

    you get better rates with better credit score and it looks like houses will continue to come down

  6. Reply
    JBeswick
    August 28, 2011 at 11:10 am

    You should definitely wait for two reasons:

    1. 10% is extortion and you’ll only get access to lower rates with a higher score. The difference in payments between 6.5% and 10% is staggering.

    2. House prices will continue to fall or stay flat (at best) throughout the country. Time is on your side, so don’t rush. You could potential save 5-20% by waiting another year.

    Good luck!

  7. Reply
    Sassy S
    August 28, 2011 at 11:36 am

    A friend of mine just purchased a house with a 580 credit score here in California with no money down from a reputable bank.(2 weeks ago) The biggest thing it usually effects is your interest rate. But you can refinance at a later time if you need to. (my friend got 6.4%) hope this helps you

  8. Reply
    Liam o
    August 28, 2011 at 11:39 am

    If you think you can afford it, go for it.
    Houses won’t go down that much even with the credit crunch at the mo.

  9. Reply
    Matt
    August 28, 2011 at 12:02 pm

    I would wait. Home prices will likely continue to decline for at least another year. During that time, you can save up and raise your score. That way, you can put down a larger payment and have a lower interest rate.

    Good luck.

  10. Reply
    Star Brown
    August 28, 2011 at 12:35 pm

    Depends if 10% works for you, thus making it your own economics issue. Some wouldn’t not mind it, but if you do not like it, you might have to wait a couple of years with some work on the credit reports to get a better score and interest rate. I would do an Internet search on Mortgage Calculators, and put in your data at the different interest amounts. A few points in either direction can be significant. It change the payments from $ 300-500 a month, most of which will seem like 80% of your first few years going almost entirely to interest. It hurts when you see all that money going away, and not reducing the principal amount by very much.

    You have to take into consideration what you getting. If you are buying a really cheap house, and have a lot of extra money to play with, a higher interest rate might be better. It would prod you to pay more each month, than the minimal amount.

    I personally would not buy an expensive house or go more than 15 years at 10%. I would have it planned to be paid off in actually seven or less. So take your payment amount and think to be able to double or even triple pay each month.

    Then it would be okay. I deal with 10% on rental properties, but that is the cheapest you can get on investment properties.

  11. Reply
    [email protected]
    August 28, 2011 at 12:37 pm

    that rate is high… right now the banks and loan compaies are hurting. people cant pay their debt.. i would wait and pay more down.. the mortgage rate is about 4 percent now.. if you were to resubmit your mortgage request now. i think you would find better terms. ok gilermo

  12. Reply
    Jamerican
    August 28, 2011 at 1:23 pm

    Wow 10% should be considerd a robbery!!! Impatience will cost you WAY more in the long run. Its best you wait a couple of months. Make sure your credit score is at a resonable number before you apply for any more mortgage loans. 600 is considered low and a liability to lenders. You should aim for about 680 and up.

    Also, too many inquries on your report can also affect it in a negative way. So, once you are ready, you will want to compare different lenders to see who gives you the best deal.

    I suggest you read a couple books on buying your first home. They will tell you all of what to look out for. Your credit score is NOT the only thing (Your debt-to-income ratio is also very important on obtaining a mortgage loan, so paying off some of those bills will be a great start).

    Good Luck

  13. Reply
    GetYourLifeBack
    August 28, 2011 at 2:12 pm

    There will be plenty of houses for the next year or so and 10% is highway robbery. Lower rates come with a higher credit score. Find out how easy that can be here –

    https://getyours.fixcreditbiz.com/credit_repair.php

  14. Reply
    Steve R
    August 28, 2011 at 2:14 pm

    Wait. To get the best rates, you have to boost your score by paying your bills on time.

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