Q: I’m having trouble getting approval to buy a condo due to my lack of credit. I don’t use a credit card and have enough cash on hand to buy my new home without a mortgage. Since I have no debt, my credit rating is low and the association is denying me approval. What can I do? – Pink
A: Many community associations have the right to screen potential buyers. While an association does not discriminate, it can look at income, credit rating, and other objective factors.
While it’s commendable not to go into debt and avoid the temptations that come with credit cards, a strong credit rating helps.
For example, your credit history can be used to determine the price you pay for insurance and, as you’ve found out, whether you can buy a new home.
There are reasons a credit score can indicate whether someone will pay their association dues on a timely basis.
Even so, the system is far from perfect, as you know.
Your first step is to speak with the association and explain why your credit score is low. Have them look beyond the score for details.
Another option is to offer to prepay a year of association membership fees to allay concerns. Because you are not a member of the association, they don’t have to deal with you, so you need to involve the seller to lobby for your approval.
I have found that most associations will take a closer look and work with a potential buyer in situations like yours.
If that doesn’t work, you may need to look for a condo in a more flexible community. Each association has different standards, and some don’t even look at credit scores.
Another option is to establish your credit score. There are many resources to help you build credit to increase your score quickly.
(Gary M. Singer is a Florida attorney and board certified as an expert in real estate law by the Florida Bar. He practices real estate law, commercial litigation and contract law from his office in Sunrise, Florida. He is the chairman of the Real Estate Section of the Broward County Bar Association and co-host of the weekly radio show Legal News and Review.He is a frequent consultant on general real estate issues and trends in Florida with various companies across the country Send him questions online at www.sunsentinel.com/askpro or follow him on Twitter @GarySingerLaw.)
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