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Want to buy a home, have a 700 credit score?

TRI-COUNTY AREA--In tough economic times, many banks and lenders are looking for credit scores at the 700 level for loans.
Pam Knapp, with Lucy Knapp Real Estate in Hammondsport, said 700 or better is a "very good credit rating" and would definitely help get a loan. Trudy Hyde, with Century 21 Sbarra and Wells, said the prime score is 720 or higher. Dave Moses, president of the board of realtors and with Prudential Ambrose and Schoemaker, said credit ratings in the upper 600s were "comfortable" and usually got people lower down payments.
"A few years ago people in the 550s could get loans," said Tom Sbarra, with Sbarra and Wells, while now loans with a smaller down payment require higher scores, like around 700.
Moses explained that people can get as low as three percent down for a mortgage if their credit rating is high enough, or might need to pay as much as 20 percent down.
However, the realtors and banks say this is a good time to buy a home for those who can. Laurie Fox, branch manager of Community Bank in Watkins Glen, said it also depends on the person's whole credit history, not just their score. A number of programs offered by lenders and banks could make it possible. Depending on the program, Knapp said people typically need 10 to 20 percent of a mortgage as the down payment. She said, "as a general rule, it covers some programs."
Another change though is the number of programs lenders and banks offer home buyers, and even first time home buyers, so they can afford a house.
"It depends on their situation," said Hyde about what programs home buyers could use. Knapp said for those who have a good enough credit score, it is an "absolutely fantastic time to buy a home."
Fox said they are no longer offering the USDA program. She explained it was because the bank did not have a guarantee the government would provide the funds. Hyde said the USDA grant is for rural property.
One program is a new one called American Recovery and Reinvestment Act of 2009, passed by the House of Representatives, Feb. 13 of this year. Fox said it is available from the government until Dec. 1, 2009. It offers first time home buyers a tax credit of 10 percent, up to $8,000, of the home's purchase.
Knapp also said there was a VA loan which requires a 10 percent down payment.
Many of the realtors and bank people said that people should get pre-approved for a loan, even before they go looking for a house. Hyde said this way the people know what they can afford before hand. It also means that if they do not get approved then, the people may have to wait and save up money. Moses said that is one thing that has changed: people need more money up front.
All the realtors and banks said once someone has been approved for a loan they should not to incur any more debt, or they will lose their loan. Jim Moon with Sbarra and Wells said he knew of someone who had bought a new truck, and even with the same payments, was denied the loan they had been approved. He explained it was because it was a new debt and the previous truck the person had been paying for was almost completely paid.

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