Understanding Your FInances

Know Your Credit

creditmattersBesides having the “perfect” home to buy, your finances are the number one detail to pay attention to.  Many forget your financial make up can make or break your real estate transaction.  Knowing steps you can take to be on the road to recovery is a must if you are dealing with credit issues.  However, that does not mean you cannot get a home, but you must be “in the know” of your financial situation BEFORE you are looking at purchasing a home.  I will help keep you in the know on what things to pay attention to in order to help you on the finance front.

Here are 5 tips realtor.com recommends reading before buying a home:

  1. Don’t lie or hide the truth
  2. Don’t mess with your credit
  3. Dispute errors
  4. Wait, if necessary
  5. Show responsibility with a mix of credit

To some this is foreign in regards to knowing how to manage their credit before looking at buying a large ticket item such as a home.

When taking a look at this article on realtor.com, it points out some very important items that need to be taken into consideration if you are wanting to look at buying a home.  The thing is, don’t look at doing this right when you are looking at buying the home, because there is a possibility that some of these things could take time to do, in addition to time to reflect on your credit score.  I would suggest maybe 3 months or so before you are wanting to REALLY buy a home, start looking at some of these items.

  1. Don’t lie or hide the truth- It is much easier to tell your lender items that you think are on your credit BEFORE they find it, because they will when pulling your credit.  I would suggest pulling your credit before you get with the loan officer so you can potentially take a look at what they are going to see. (annualcreditreport.com)
  2. Don’t mess with your credit- If you know you have a desire to buy a home, buying other large ticket items with credit, or getting news credit cards, is probably not the best idea because it might affect you getting a loan for this home you want.
  3. Dispute errors-When you get that credit report take a look at it and if there is something on there that is not correct, contact that company. Some contact information is located on your credit report for them, or look things up online for contact numbers.  Make sure and document all contacts you talk to and the date and comments.
  4. Wait, if necessary-If there are a lot of items that you need to fix on your credit then maybe right now is not the best time to buy a home. HOWEVER, make it a point to set a firm goal of when you want to achieve that goal AND what you need to do in order to meet that goal.
  5. Show responsibility with a mix of credit-This is something some have a hard time grasping. YES you need to have credit cards and other debts so it can show that you had/have them AND pay them in a timely manner.  You can not prove your credit worthiness to a bank if you do not have credit.  Each type of creditor affects your credit differently, therefore having some credit cards, car/installment loans etc helps to show you can pay all types of creditors in a timely manner.