Homeownership: 3 Reasons Why it is Even Harder!
Housing Starts (New Homes)
Soaring Lumber Prices
Homeownership is Overpriced
To Sum It All Up
A High Credit Score Does NOT = Financial Success??
#FICOscore #CreditBureaus #CreditScore
Why is the FICO score formula not published? Because then all of us would know how to get around the FICO credit system, but there is a better way to increase your FICO score...And that is to be debt-free!
Did you know that 35% of your credit score consists of the length of your credit history? The credit bureaus are looking at your debt load and factoring these dollar amounts into your credit rating.
The next is 30% is based upon your debt level. So the amount of debt that you're carrying. So guess what, the more debt you carry, the better your FICO score gets. Well, that also has a problem on the other side. And I'll just digress really quick. When your debt usage is high and you try to go get a mortgage or another line of credit. They look at a thing called DTI debt to income ratio. Well, you can't keep on strapping on more debt and expect to get more. So look where that takes you. That takes you down a path of staying in debt.
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Buying a Home can be Overwhelming.. But You Have a Friend in the Business
YES? it is possible to buy a home for your family, even if you do not know where to start! We are here to guide you.
Buying a home can be overwhelming and there are so many things you have to do before you can get your keys to your home.?
The very first thing you should do is find out what your credit score is. If you do not know what your score is you can get a copy of your report for free from annualcreditreport.com
Once you have your report look at the following items:
- Locate and know your score
- Are there any errors? For example Payment history, balance, date opened/closed
- Do you have any collection, charge off or judgment accounts?
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If there are any errors in your credit report you should dispute them to the credit bureaus. We found a free app that allows you to dispute your errors all in one place. The app is called UpTurn. We are still testing this app, but thus far we are quite pleased with the app. And you cannot go wrong with FREE!
If you?d like to talk to us about purchasing your first home, just leave a comment or send us a message!?
Why Credit is Your Secret Weapon in Getting a Mortgage
Do you know how important your credit is in obtaining a mortgage? It is the secret weapon that will put you at the top of the lender?s list to approve your mortgage. But you have to do some work to ensure that your credit is ready to take on a mortgage. Before you start the house-hunting process you need to have your ?Credit House? in order.????
There are three critical aspects of obtaining a mortgage; your credit report, the money you have allotted for the down payment as well as closing costs, and your income. Lenders want to paint a picture that encompasses all these aspects to make sure they minimize their risk and ensuring they are setting you up for success.
According to the American Bankers Association, less than half of all U.S. consumers know their credit score is or have reviewed their report in the last 30 days. Your credit score is the first thing a lender reviews and it determines if you get to go to the next step of the application process. TIP: Your credit score will determine your interest rate on your mortgage and what type of loan you will be offered.??
The next item is your down payment and monies you have saved for closing costs on your mortgage.? The more money you have saved towards both these will make the lenders? decision much easier to approve you. Yes, there are loans, such as FHA loans that only require 3.5% as a down payment. Closing costs typically run between 2% and 4% of the loan amount. For example, on a loan of $100,000, there could be between $2,000 and $4,000 in closing costs. On that $100,000 loan, you would have to have $3,500 saved for your down payment. TIP: There are down payment assistance programs available for first-time homebuyers.
The last but not least important item in obtaining a mortgage is your J-O-B. The lender is looking for the following: how long have you worked at your current employer, do you earn enough to pay the mortgage and your bills on a monthly basis, lastly are you able to save money after all your bills are paid. These are basic items lenders look at, but the lender could ask for additional financial documents. TIP: The more you can save the better your application looks to the lender and the better your loan terms could be.?
Once you have all these items to your lender they will then produce a pre-approval letter that you can use to find a home. The pre-approval letter will explain all the terms of your loan and the all-important dollar amount you are approved for your home purchase.? At this point, you are ready to go out and start looking for a home. TIP: Your pre-approval has a 90 to 120-day expiration, meaning if you do not purchase a home during that time the lender will have to pull your credit again.??
If you are ready to be a homeowner the first thing you need to arm yourself with is your credit score. Get your free annual credit report and know where you stand with your credit. If you need assistance or have questions feel free to reach out to us by email or call us at (812) 777-5850.??