WHAT TO DO TO PURCHASE A HOME
Purchasing a home is the largest investment that most people undertake in their lifetime. Since credit scores are very important factor in determining what terms the buyer would receive on the financing in the purchase of a home, buyers should know what they can do to improve their credit scores.
First thing is get credit scores from the three major credit bureaus, Experian, Equifax, and Trans Union. These scores should be similar, if not, then there are discrepancies that need to be looked in to.
If you find any errors, they should immediately be challenged in writing by filling out a dispute form located on the back of the credit report. Once the credit bureau as received the written challenge, they must notify the retailer and then the retailer has 30 days to respond in writing. If they fail to respond the consumer gets the benefit of any doubt, but the down fall it takes 30-45 days to correct it. It is recommended that the buyer get credit scores 45-60 days prior to closing on home, to give enough time to fix errors.
Do not make inquires for additional credit such as department store, auto dealers, furniture etc. Recent inquires lower scores.
Payoff as many outstanding balances owed on credit cards and other month to month and do no use credit cards until after closing.
Pay obligations timely.
Do not use credit cards to pay off another during 30-45 days of closing period, as both credit card balances will show up increasing debt ratio.
Do not use consumer finance companies. They lower your score.
Never go to consumer counseling service when you apply for home loans. This alerts credit bureaus that you are unable to pay bills and will have an effect such as bankruptcy would.
If you have relatives that are willing to help you, have them pay off your credit cards to help wipe out debt. Present estate gift laws allow relatives to give $11,000 per year. Another way a relative can help is to buy down the mortgage rate, or they can act as co– borrowers.
It is always good to check your credit report yearly. We found someone used my husbands name and SS# and we had a judgment on one of the three reports.
I hope this was informative for you and your friends. I hope you are doing well. If you need anything call me 352-266-2637.
I work with Rick Durham Bank of England, he is wonderful, call her for loan information– 352-804-5883