Qualifying for a real estate purchase requires different credit than auto financing or credit cards. In fact, you may be able to go out and buy a new car today, but you might be turned down for a home mortgage. On the other hand, you could go out and buy a house and be turned down for an auto loan.

Perhaps you recently applied for a line of credit and were told that your credit score was excellent. When you apply for an auto loan or a consumer credit card, the scoring model computes a different credit score than when a mortgage lender runs your credit. Your credit scores differ for different types of loans. Plus, mortgage lenders run all three credit reports and usually take your middle score as their basis for your loan requirements.

However, some mortgage companies, especially non-prime lenders, will use your highest credit score. For a mortgage refinance, some lenders don't even run a new credit report if all your mortgage payments were made on time. They use the credit score from when you first applied with them.

Besides your credit score, mortgage lenders consider your debt-to-income ratio and other credit matters, unlike other types of credit grantors. Your debt-to-income ratio is the comparison of mortgage payment, including taxes, interest, and insurance to your total gross monthly income.

Real estate lenders also consider:

• Your education
• Your income
• Your employment qualifications
• Your overall monthly debt payments

Understanding the difference between good credit and the credit needed for real estate mortgages helps you refinance your mortgage or buy your dream home.

Copyright 2005 Jeanette J. Fisher All Rights Reserved.