Credit Advice Before Buying A New Home
Are you planning to buy a new home soon? Are you a first time home buyer or just buying an investment property?
In any case what you are about to read can help you achieve your dream to buy a new home by making sure that your credit is on your side during that process and not against you!
[fancy_header bgColor=”#00ab06″ textColor=”#000000″]1- Can you afford the home you want to buy?[/fancy_header]
If you are not buying the home in cash, your Realtor and or lender are going to want to find out if you can afford the home by asking for your income documents. Your income is a very important factor in buying a home and getting the home loan. The lender will want to know how stable is your job and your income. They want to see that you have had your job for a longer time than few months otherwise they will ask for previous income documents.
[fancy_header bgColor=”#00ab06″ textColor=”#000000″]2- How much debt do you have?[/fancy_header]
In other words what is your debt to income ratio? The mortgage lenders want to know if you can repay the loan and make the monthly mortgage payments.
By running your credit, they get an idea of what is your debt and check it against your income. If your debt and your monthly payments on your debts are too high compared to your income then this might become a problem even if you credit scores meet the lenders expectations. The lender will most likely require the applicant to pay down the debts accordingly.
[fancy_header bgColor=”#00ab06″ textColor=”#000000″]3- How is your credit?[/fancy_header]
Whether you are buying a home via a Conventional Home loan
, a certain credit score is expected of the loan applicant(s). Having a good credit with minimum to no negative items is a requirement. If you have a not so good credit, please contact us so we can take a look at your credit and give you a free consultation. We not only help you fix your credit by removing the negative items, we also guide you and educate with everything that is on your credit and get you ready to qualify for a home loan.
[fancy_header bgColor=”#00ab06″ textColor=”#000000″]4- Do not add any new debt to your credit![/fancy_header]
Adding new debt to your credit before or during the home loan qualification process can be a detrimental factor specially when that debt is an actual installment loan (car loan, some furniture loans, student loans…). Just the credit check by a creditor or even a credit card company also known as hard inquiry can hit your credit score by 10 or 15 points alone. Installments loans if paid on time and paid down can help your credit long term. Short term they hurt your credit anywhere from 25 to a 60 points as you are adding more debt on your credit and haven’t had the chance to pay on it or pay it down.
If your debt to income ratio is OK, do not add more debt until you close escrow and loan on the home your are buying. If you add a new debt not only your score will go down but your debt to income ratio will go up and may hinder you getting the home loan.
All this advice and much more we give our customers. We not only fix consumers credit, we actually guide them to get the best credit scores possible so they can reach their financial goals.
Everybody is entitled for an Absolute Free Credit Consultation and Evaluation. We will tell you exactly what is going on with your credit, and what we can do to help you. We are so confident in our service, that we offer a money back guarantee if there is no improvement in your credit(the items you came in with) within 6 months. Call 1-(888)-655-6768, our credit repair experts are waiting to give you a free credit consultation OR Contact Us on our website!. You can send us a referral here.