National Association of Realtors is calling for a relaxing of the current credit policy restrictions to revive the current stagnant real estate market. They believe that the loosening of these credit restrictions will get “qualified buyers” out in the real estate market. Are we doing justice to real estate by lowering the credit score standards?
Personally, I think the question we all should all be asking ourselves in the Real Estate industry is “Who is a Qualified Home Buyer?”. Let’s explore the idea:
- Financial viability: Usually that means having at minimum for an FHA loan, 3.5% of the loan down payment or if you go for a Conventional loan, 10 to 20% down.
- Credit score: Great credit is thought to be an indicator of responsibility.
- Understanding of the responsibility of home ownership.
Now the first two have some sort of metric behind them. If you have the money and fall into the correct credit score range, voila, you are golden. However, the one thing that vexes me, is “understanding of the responsibility of home ownership”. There is no discussion about educating the prospective buyers on the responsibilities of them owning the home.
Whose responsibility should it be? Lenders? Realtors®? Government? Who knows?
But, let’s explore the awesome privilege and responsibility it is to own a home in the next couple of weeks…