About Credit & Buying a Home

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Buying a home usually requires having moderate to good credit, but different states of the economy can make it more or less difficult to get a loan for a new house. Understand the role of a good credit history as it relates to the house-buying process with information from a financial manager and currency trader in this free video on finance.

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Video Transcript

I'm Roger Groh and today we're here to talk about credit and buying a home. Boy this is a timely topic. Over the last couple of years record numbers of people have defaulted on their home loans and don't get too hung up on that, there are a lot more people and every year therefore the likelihood that is that more people are going to default. The difference though is many of the banks have also folded. So today, if you go to a bank, it's very difficult to get a loan to buy a house even if you have good credit. So how are you going to do it? Well for sure, you're going to need to get your credit report to start. Because if a bank is going to lend money, they're going to want to know without fail that they're going to be paid back. So the way to do it is be sure that the credit reports that are out on you, make sure that they're accurate. Bring them with you to the bank as you go to borrow money so that you're showing to the banker ahead of time who you are and what you want. That will help get you through the credit process a little bit quicker. If you have good credit, the likelihood is today you'll get a loan. If you have crummy credit, well it's tougher. But in the last week, the US government and this is December 15th today, the US government has now passed home buying subsidies where you can finance up to 97% of the cost to buy a house meaning today you only have to put up 3%. So if you've got good credit, you don't need a whole lot of money upfront today to buy a home and in some cases you don't need any money. So be sure your credit history is right and look at the deals that are available to you again by Googling, credit reports and credit availability in your local area whether it be a city or state, see what deals are available, take advantage of them and that is how you use your credit to buy a home. I'm Roger Groh.

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