How high would your credit score need to be to buy a house in 2011 with the current market? This question will have a multitude of answers from the different experts out there, but actually what we all really want to know is 1) What score do I need to qualify for a mortgage loan and 2) What score will give me the best interest rates on a mortgage loan?
Back in October 2008 the minimum score someone needed to buy a house was 700, but in November 2010 Bloomberg reported that recently mortgage lenders including Wells Fargo & Co. and Bank of America Corp., who are two of the largest mortgage lenders in the US, raised the minimum FICO credit score to 640 from 620.
The San Francisco Chronicle reported in September 2010 that if your FICO score was in the 600′s, you would be fortunate if you were approved, and if your score was between 700 and 750 you would very likely get approved, but it’s unlikely you would be offered the best deal.
So it looks as if your credit score to buy a house in 2011 would need to be greater than 750 if you were looking for the best interest rates. But your score is just one of the things lenders take into account when considering your mortgage application. They also look at your debt to income ratio, and the size of your loan application in relation to your income.
If you do not know what your score is currently, then before making application for a mortgage, it’s advisable to get your score and check it to ensure that it’s correct. You can always just go ahead and apply and see what happens.
10 FebFICO Credit Score to Buy a House in 2011
11 MarHome insurance facts
For most of us buying a home is the biggest investment to mike during the whole lifetime. And it seems reasonable that such an important investment needs reasonable coverage. That’s why you need home insurance.
What’s included in your homeowners insurance?
In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks:
- Theft
- Fire and lightning
- Smoke
- Frozen pipes
- Ice and snow
Basic insurance policies also usually include liability coverage for cases when someone is injured in your house. In case there are legal actions taken against you it will also pay for court fees. Basic insurance will also cover your costs in case it’s impossible to live in the house due to fire or any other accident.
What’s left out of coverage?
To learn what is not included into the coverage you should read through your policy, especially the Exclusions part. Things not covered by standard policies vary from one insurer to another, but most likely they will include damage due to earthquake, flood, nuclear accident (very useful isn’t it?), war, act of terrorism and similar. Of course, you can buy additional coverage for such events to be included into your home insurance policy. Wear and tear damage is never included into the policy because it’s considered to be maintenance, which is the owner’s sole responsibility.
How much coverage do I need?
When buying a house through mortgage loan your lender will require you to purchase minimum home insurance coverage (which is usually the purchase value of your home). However, it’s usually not the amount of coverage to meet your insurance needs. Instead, try calculating how much money it would require to rebuild your house entirely and use this amount as the base for getting the right coverage amount. Speak to your agent when completing the insurance policy to calculate the exact amount, or even run a full inspection for qualified appraisal.
Typically, liability limits are around $100,000, however it’s too little to protect your assets in case of legal action. You may opt to raise your limits up to $500,000 for an additional price. Sometimes it may be useful to get umbrella coverage, which pushes your limits beyond $1 million, however such coverage is typically offered only when you have both your auto and home insurance from the same carrier.
Money saving tips
Of course homeowners insurance can be quite costly sometimes. Especially when you have many items under additional coverage. In order to keep the coverage you need while still having reasonable rates you might want to consider raising your deductibles first. Deductibles are the amount of money you will have to pay out of your own pocket for the damage before the insurance policy kicks in. and the higher is that amount the lower will be your premium. The usual deductible within standard policies is $250. Try raising it to $500 or even $1000, and your rates will go down by up to 15%.
Another good way to make your home insurance cheaper is installing security features such as alarm or video, special locks and so on. This way you protect your assets and the insurance company is likely to give you a good discount for that.