As I write this today, we are finally over the cold (fingers crossed!). The sun is out, and it's got me thinking of all the fun things to look forward to as the weather heats up!Here are
1st Step Every First Time Home Buyer Should Make
You're a first time home buyer and you're excited but anxious at the same time because it's one of the biggest purchase you'll ever make. Now is the time to do your homework. You have lots of choices to make and it can be very daunting. To help alleviate some of the stress you'll want to be prepared. The First step every first time home buyer should make is to check their credit score. You can pull a free report every year from http://annualcreditreport.com If your score is less than perfect, under 620, you'll want to improve it to score a better mortgage. While the report won't tell you your score you can, for a small fee, receive it from the 3 different credit reporting agencies. You could also check with your credit card company. Some offer you a free report as well as your credit score. Once you have the report, review it thoroughly for any mistakes. Pay particular attention to "adverse account" section that details late payments and other slip-ups.
Access where you stand. It's easy, the better your credit history, the better your score which leads to better opportunities for a home loan. The Federal Housing Administration requires at least a 580 credit score to permit a 3.5% downpayment and most major lenders require at least 620 if not more. So what do you do if yours is less than perfect? Not to worry, there are several ways to bring your score up.
If you notice any discrepancies on your report start by sending a dispute letter to the bureaus providing as much documentation as possible.
If you have had missed payments once or twice, speak with the company that registered the late payment and have them remove it. Most companies will remove it if the payment has been received. This won't happen of course if you've had several late payments but if you only had one or two.
Another way to increase your score is to pay off your debt. I know, sounds easy, right? But it's not an option for your right now. Ask your credit card company to increase your credit card limit. This help to increase your debt -to- credit ratio. (Compares how much you owe to how much you can borrow)
Pay your bills on time. If you have to set up reminders to pay or automatic payments then do so. This can cost you on your credit score.
Give yourself some time. Payment history accounts for 35% of your score. That's why it's so important to start out with these good habits so when the time is right, you're ready to go.
Stay tuned in my next blog post on Saving for a downpayment!
Jennifer was born and raised in Maryland and for the last 21 years has resided in Middletown, MD. Upon finishing her studies at the University of Maryland University College with a Bachelors degree in....
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