FIRST TIME HOMEBUYER? WHERE DO YOU START THE PROCESS?
SQUARE ONE-CLEAN UP YOUR CREDIT- Unless you are holding a winning Powerball ticket, are sitting on a substantial nest egg or are being financed by a wealthy relative, you will need a loan to afford your first house. Mortgage Companies and Banks use credit scores, also known as FICO scores, to evaluate the potential risk of lending to individuals. The higher the number, which runs from 300 points to 850 points, the better your credit score.
Knowing your score well in advance will give you time to clean up any mistakes, like tax liens that were paid off many years ago or parking tickets that you paid but that are still showing up on your credit report.
Sometimes it takes months to clear your credit up, and by then the seller has sold your dream home to another buyer and you are back to square one.
Knowing your score will also give you time to boost your number if need be. The three major credit-reporting bureaus generate their own FICO scores based on the data they collect.
To find out where you stand, contact a reputable credit firm like Phoenix Credit Consultants, (314) 429-2040 or www.123PCC.com. Even if your credit score is high enough to qualify for an entry level loan (like an FHA loan) you may have time and the opportunity to strengthen your score to a point where more favorable loan products might become available to you. A company like Phoenix can help you raise your score as quickly and as effectively as possible.
SQUARE TWO-GET PREAPPROVED- Not to be confused with a prequalification, which is essentially a “rough” calculation of how much of a loan you might qualify for, a preapproval is a written estimate from the lender stating how much you will likely be able to borrow based on an initial review of your credit and financial information. The application often requires submitting pay stubs, bank statements, tax returns and other financial documents. Most lenders charge nothing for the application, since they are hoping to win your business, but some charge you (usually less than $100.00) to cover the cost of a credit check.
Why not wait until you’ve actually found a place to get a preapproval letter for a mortgage?
- Because it will help you determine how much you can afford.
- It will provide you with significant leverage when you are ready to make an offer on a home. It provides assurance to the seller that you will be able to secure financing and makes your offer significantly more attractive to an offer that is contingent upon financing being obtained.
Preapproval letters typically expire between 90 and 120 days, but can be quickly updated with a phone call to the lender.
SQUARE THREE-ASSEMBLE YOUR TEAM- In addition to a credit consultant and loan officer, you will need to add a real estate agent to your team.
Look for a real estate agent that has an established track record working with buyers in your situation, and who will get back to you promptly.
Look for an agent that is experienced, one who frequently works with entry-level buyers. You want to feel like you’re working with someone who has done this time and time again, not someone who is learning the process as you do.
You want an agent who can help you come up with a sound offer based on market analysis and who will put together a well-rounded application package on your behalf.
Your agent’s commission, typically 5 or 6 percent split with the seller’s agent, will ultimately come out of the sale proceeds.
SQUARE FOUR-HIT THE STREETS!- With your credit restored, your preapproval letter in hand and your realtor by your side, it’s time to hit the streets!
Looking to hop in your car and drive from prospective dream home to prospective dream home this spring or summer?
Then now is the time to get started at square one. Contact the credit experts at Phoenix Credit Consultants today (314) 954-7429 or www.123PCC.com. We can help you obtain your credit report and a reliable mortgage (FICO) credit score.
Ask the experts at Phoenix about their unique, “Goal Oriented” credit restoration process. (GOPHOENIX!) That process is designed to get your credit score where you want it to be as quickly as possible and gives you control over how long that process takes.