How good is 724 credit score?

Financing, Hard Money Lenders, Private Money
1

I have 724 score not bad I guess! How "exactly can I use this to help me with a deal?

2

With that score, you should be able to get 100% financing with very little money out of pocket.

3

Thanks but I got 100% with a bad score so I guesss the new Q is how else can it help me?

4

Frankly, other than easy access to money (financing) and low rates, the only other useful purpose of a good credit, that I can think of, is to use it as your contribution in a partnership.

5

724 credit is good, all programs are available at better rates. The advantage of having better scores helps to compensate when ratio’s maybe higher or less liquid cash is available, basically it helps the underwriter sign off on an approval where as a person with lower scores has to fit guidelines exactly for that same approval. Last week I got a commitment (approval)for a client with a 79 back ratio - they had 765 credit and lots of cash in the bank! That’s what good credit can do for you. Keep in mind fitting square pegs through round holes like a 79 back ratio approval is best achieved with a bank or correspondent lender, they have the ability to look at compensating factors in order to get an approval.

6

Mortgates,

What is a back ratio? How do you calculate it and what are “good” values for the number? In other words, can you explain the meaning and what it means to the borrower?

Wilson

7

Back ratio is considered all your monthly minimum required payments that show up on your credit report. For conventional financing, 28% for the front(housing expense) and 36 for the back. I know this sounds rediculously low, sub prime will allow 55 and 60 on the back end but you lose out on the bells and whistles that some conventional financing would allow. However these are just guidelines and nothing is set in stone. That’s why using a mortgage banker has its advantages. We can present your situation and show banks your compensating factors like credit and cash in the bank to make you look much more attractive even though you may not meet the necessary requirements. As a rule of thumb- less than 45% on the back end and you have a world of options!!!

8

Mortgages,

I assume that when you say “Back ratio is considered all your monthly minimum required payments that show up on your credit report”, you mean the ratio of minimum required payments to income. Please correct me if I am wrong. How does an investment property affect this. Would it be considered back ratio or front? It seems to me that any mortgages that I would have on investment properties would be considered back ratio, but I have no payment on my home, so do I have no front ratio? Would the mortgage company consider the property that I am currently buying as front ratio and the others as back ratio? Just trying to understand what they look at and where I stand in the grand scheme of the picture.

Wilson

9

Well you are in the 10% of the population of having above 700 score

So what that means is that there are alot of loan programs that people only dream of getting and you can get them and I am not
just talking about 100% loan programs.

Lenders will look at your score and it is a compensating factor which means that if you have other weakness in you loan well they just might over look it and get you a loan just because of your score

  1. If and when you want hard money and other factors are involved
    hard money lender will again look at you as a good credit risk and again want to build a reputation with you and give you more and more money if you never let them down

  2. If you want to get a qualifing assumption you would beable to to that

  3. a no qualifying loans will jump at you

  4. you would be able to partner up and do many many creative deals

This is just to mention a few.

10

With a 724 credit score and the right parameters, you could potentially increase your monthly income, be prepared for an emergency, develop more assets, send your kids to college and eliminate the biggest cost of all - taxes.

11

you could also open a new credit card and buy the REIClub Forum Pizza. Sausage Pizza. Deep Dish.

12

Well before he did that he will need to raise his credit limit on all of the other cards he owns along with a new card.

I am sure you will eat at least 3 slices ::slight_smile:

I’ll take a pepperoni

13

so half sausage, half pepperoni. Anyone else?

14

How about CHEESE

say cheese ;D