Today’s home prices make it a great time to be a Buyer now!
Credit is much harder to get now, even with a good credit rating. In the case of condo buyers, you may need as much as 25% down, as well as a good credit rating. If you have the savings and the good credit, don’t wait! Rates remain low and prices too. If you can’t get into the real estate market now because of a poor credit rating, there are things you can do.
Start with obtaining your credit report. You are entitled to receive a free copy once a year from each of the three reporting agencies: Experian, Equifax and TransUnion. You can also obtain a copy from http://www.annualcreditreport.com/.
It’s your right to dispute inaccurate information under the Fair Credit Reporting Act. The credit bureaus are only responsible for reporting the data provided by creditors, but they do not verify it. Nearly 80% of all credit reports have some mistake, so it’s a good idea to review your report. It’s best to dispute by writing all three agencies with proof of payment. Keep copies of everything you send in the mail too.
You may also need to file your dispute in writing with the creditor as well. If you find old information, you will want to have that removed as well. The data must be kept for 7 years, but older information may be impacting your rating.
If you have experienced identity theft or your credit has been compromised in some other way, you can put a security freeze on your credit.
If you had to go through a foreclosure or bankruptcy, in time your credit can be repaired. A foreclosure should be removed after 7 years, and a Chapter 7 bankruptcy after 10 years.
If you are not getting into the real estate market because you don’t have the down payment, get your finances in order.
Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries and eating out.Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.
Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks, bringing lunch to work or eating dinner at home more often.Increase your income. Ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 to 25 percent down payment. Don’t change jobs. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.
Start with obtaining your credit report. You are entitled to receive a free copy once a year from each of the three reporting agencies: Experian, Equifax and TransUnion. You can also obtain a copy from http://www.annualcreditreport.com/.
It’s your right to dispute inaccurate information under the Fair Credit Reporting Act. The credit bureaus are only responsible for reporting the data provided by creditors, but they do not verify it. Nearly 80% of all credit reports have some mistake, so it’s a good idea to review your report. It’s best to dispute by writing all three agencies with proof of payment. Keep copies of everything you send in the mail too.
You may also need to file your dispute in writing with the creditor as well. If you find old information, you will want to have that removed as well. The data must be kept for 7 years, but older information may be impacting your rating.
If you have experienced identity theft or your credit has been compromised in some other way, you can put a security freeze on your credit.
If you had to go through a foreclosure or bankruptcy, in time your credit can be repaired. A foreclosure should be removed after 7 years, and a Chapter 7 bankruptcy after 10 years.
If you are not getting into the real estate market because you don’t have the down payment, get your finances in order.
Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries and eating out.Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.
Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks, bringing lunch to work or eating dinner at home more often.Increase your income. Ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 to 25 percent down payment. Don’t change jobs. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.
Labels: budget, condo buyer, credit rating, credit score, down payment
posted by Maureen Moran at
2:25 PM
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