Hi. This is Susy Thomas with your weekly real estate advice. Today I'm talking to people who are thinking about buying a home. As I've mentioned before, the first thing that you want to do is check
Thinking about buying your first home?
1. Crush your credit
This step is particularly critical if your client has past debts that may need resolving. Explain to your client that a lender will most certainly check their credit score and that ignoring any red flag won’t make it go away; w
For those certain that their credit score is excellent, remind them that mistakes can turn up on any credit report. These can be resolved, but the process can take months. In the meantime, your client will be blocked from getting .
2. Hold off on significant purchases
Just before purchasing a home, and while paying off debt, suggest to your client that they should hold off on making any significant purchases or acquiring any new debt. This includes setting up a new store credit or new credit card (unless it’s part of a debt repayment strategy).
Lenders will examine credit scores as well as (known as debt ratios). Any new debt will increase this ratio and make it harder for them to qualify for a mortgage (or get the best rates). Plus, adding new debt or access to debt can cause unnecessary fluctuations in credit history. This is a red flag for most lenders. Tell them that lenders want to see stable, squeaky clean spending habits.
Susy grew up in Detroit, graduated from Michigan State University. She has lived in San Diego for over 35 years. While working as a purchasing manager in the restaurant business she was offered the o....