GETTING YOUR FIRST OWNED HOUSE: A HOW TO
Don’t we all want a house not just for our own self-gratification but for our family as well so that they have a secure and free place to live in? With renting, you’re not getting that much free will when it comes to your place. You may not be able to decorate your apartment in a certain way, can’t have too many visitors, can’t have pets etc. It’s a long list of don’ts but with owning your own, a lot of those don’ts are possible. We can’t deny it, owning a house is so much better than having to rent.
If owning is easier than renting, we’d all be relaxing in our own dream houses now and renters will be out of business. Imagine, pets running around, children in the backyard playing and us adults sitting on our front porch watching the sunset while drinking coffee. Nowadays, this has become a dream for many, too ambitious to reach especially for those who have bad credit. And you might think that this is the end of it because you know you have bad credit, right?
That’s actually a misguided thinking. I also thought the same way when I was renting in a 2 bedroom apartment. For a long time I believed that I’d never be able to purchase my own because 5 years ago, I couldn’t pay my loans and credit card debt in a timely manner. I was late in my payments and had to pay too many interests because I just couldn’t pay on time. I wish I heard of credit repair so I was able to purchase sooner.
It’s funny to think that buying a house is dependent on a three-digit number. It holds the power and it’s like a passcode that can unlock so many possibilities. This is your credit score and it determines if you’re eligible or not. So it just makes sense that you should do whatever it takes to be able to clean, dispute and review your credit history. If you do not have the time or the knowledge to repair your credit, you may be interested in hiring a legitimate company that can work this out for you. With intensive research, you will find a suitable credit repair agency.
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Having a low credit score means that you’ll get a higher interest rate than normal when you apply for a home loan. Aside from this, you’ll also be paying a much larger down payment. Others get denied altogether. Looking at your situation: if you’re going to allow yourself to pay a higher interest rate and a larger down payment than others, you’re actually asking the lenders to drown you in more problems. I do not want to see that happening.
Although nowadays there are programs for those who have bad credit scores for home loan applications but if you have had credible and steady employment for the past two years or more and can pay 10-20 percent down at a home, your chances of being approved is much higher even if you have a bad credit history.
So, how are you actually able to have a better credit score to own a house? Where do you start?
By knowing and analyzing your current credit situation
I have a little story about my experience in purchasing my own property. I had a Google sheet in front of me and I put all my income in, expenses and debts projecting my yearly finances for the next 5 years and I thought to myself, “Okay, wow, I can actually purchase my first house soon.” So I started searching for condominiums online and went to visit and checked the property. When I had talked with my broker about payments, requirements and such, she asked me a couple questions and I got taken aback. I knew I wasn’t ready even though my yearly income says I can. Some questions my broker asked, “Do you have an existing loan? Did you have a previous loan that you weren’t able to pay on time? Do you have a credit card? Are they maxed out at the moment? Did you ever pay an interest on your credit card ever since you got it?” My answers were all, “Yes”. And it was difficult for me to grasp the idea that I couldn’t buy my first house yet.
Knowing where you are right now is crucial in this stage. You do not want to throw darts in the dark. Schedule some days in the week that you can have an hour or two to go through your credit reports. You may find these reports from all three credit reporting agencies. You need to get three because there may be some differences in their reporting and you should inquire about these differences. Make sure to be very detailed and careful, check each item and verify. Most of the time, you’ll see one error on your report and you must dispute this.
Disputing errors is a long and sometimes a burdensome process. This requires organizing letters, correspondences between you and the credit reporting agency need to be documented. If they can’t verify this questionable information on your report, they only have thirty days to respond to you and they must remove this.
For some, this takes up too much of their time so it makes sense to ask for help with a legitimate credit repair agency. Only thing you have to do is to have an intensive research on the most suitable and legitimate credit repair agency for you. Not all agencies are equal, finding one is easy but their background needs to be checked by you before diving into their services.
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After you get a squeaky clean and fresh credit report, get a revised and corrected copy. Double check everything and there you have it.
Congratulations, you’re on your way to getting a home! Although it’s a long and delicate process, the end result is what’s best. It’s better to endure these than giving up on your first dream house and having to rent for the rest of your life not being able to paint your room red just because your landlord doesn’t like red.
Next week, I will show you the don’ts while purchasing a property. Just because you now have a better credit, doesn’t mean you can go around shopping impulsively. Tune in 🙂