Re: Less than some, better than some - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 21, 2003 at 16:23:00:
I still don’t see how this relates to any question regarding investing.
You are asking mobile home investors, the majority of whom buy for cash, where your credit score rates.
Apparently your score is “good enough” for your credit union, where the question is most appropriate. As for investing, that score alone will not determine if you can make a deal happen. In most cases, your credit score is merely a side bar. Yes, it is good that you make your payments and have scored a reasonable score but lenders look at far more than your score. They are looking at your entire financial profile. What are the paid on time accounts in your credit report? What is your net worth? What is the equity in this deal? How much are you putting down? What is your debt to income and other various ratios.
But again, if you are investing in real estate and/or mobile homes, few of your deals will come directly through banks who go through all of this. REI will involve owner financing (they don’t know how to read a credit report much less pull one), hard money lenders, lease options etc.
Just because a banker was suprised by your score, don’t let that fool you into believing that real estate investing will be easy. Even a perfect score has little effect on lending decisions if the deal is not something the lender prefers, or the deal is too thin, or you have already leaveraged other deals and banks have capped you out. Overcoming that cap will be a matter of investing and not a matter of credit score.
A credit score is a function of the kind of debt you have and how promptly you pay. It has nothing to do with how well you find or capitalize on deals. Quite often true “deals” require a quick, cash sale to make it a deal. A lender will be of little use in aquiring this property. They may be of assistance in the refi but unless you find the ability to buy the property first, the credit score and the lender are of no use.