Thinking of buying a home in 2009? The time’s never been better. Interest rates are ridiculously low, there are a record number of homes on the for sale market which means you can negotiate a great price and the government is offering an $8000 tax credit if you buy before the end of the year!
We sell our homes mostly through lease options in order to help people who haven’t been able to go through traditional lenders to buy either because they don’t have the down payment saved or they have low credit scores. While they live in our homes, we offer credit repair and give $$$ credits to help residents save their down payment. We also try to guide them through the steps to be able to buy.
Here are some tips we share that you’ll need to know when you’re trying to buy:
Pay all bills on time! Not just your monthly lease payment (but pay that first!), but everything; credit cards, car payments, utilities, everything. The lenders will require bank statements and will run various background checks and credit checks to determine your ability to repay the loan. Make sure everything they see is good!
Don’t buy anything new! I mean large purchases; jewelry, vacations, flat screen tv’s! For sure, don’t buy new cars. Large ticket items can lower your credit score substantially. They significantly change your debt to income ratio. That means that what you owe becomes too close to what you earn and the banks will see that you can’t afford to take on more debt. Keep your debt down so the lender will see that you can afford your new house payment.
Don’t change jobs! Lenders want to see a history of stable employment. The exception may be if you get a better job in the same profession with a salary increase but, if possible, don’t make any changes until after you’ve gotten the home.
Why do I make these warnings? I’ve seen cases where buyers have gotten their credit score high enough to buy the home they’ve been wanting only to go out and buy a car first. Guess what? They no longer qualify for the home. Or, (this happens too often) buyers get qualified for their new home, go out and buy new furniture to put in that new home before the closing and then, guess what, they no longer qualify for the home. Lenders will do a final check on you the day before or the day of closing to make sure nothing has changed. Once you’re approved for your loan, make sure nothing on your credit report changes!
If you have questions about things like, should you take this new job, check with the lender. See what qualifications they require. The basics stay the same but they all vary somewhat. Maybe you can wait 6 months to change jobs until after you,ve moved into the home of your dreams.
To get started, check your credit score. See if there are any incorrect items listed. If so, write to the credit bureau to have them removed. Find a good credit repair person to learn what things you should do first to most improve your score. Your bank or lender can give you the name of someone reputable. Start the process there.
Good luck! Now go out and buy your new home! If you already have specific questions, ask them here! I’d love to help you be able to buy a home. Its the American Dream!
