I just closed on a house! - Page 2

Thanks. Without taking risk is hard to get ahead. I believe us Dacas are a very special bunch built for success. We are a small accounting firm.

Hi fellow dreamers,

I need some guidance on how begin homeownership. my credit score is in recovery process( lack of financial education in the past) and is around 595. My mom is a a gc but not earning. my sibling who is also a dreamer has a good paying job, so do I. should we start just looking around for a lender? a real estate agent? i've been looking on har and zillow but I dont want to begin the preapproval process if it will hurt my credit. any advice is appreciated.

Hey there. I suggest following plan:

Pull all 3 of your credit reports EXPERIAN, TRANSUNION, EQUIFAX. look for any discrepancies to dispute and see if any of your debts have been sold to collection agencies and dispute them. There is free information online on how to do this. NEVER PAY FOR CREDIT REPAIR OR SUCH!!!.

Next find out who someone with good credit to let you piggy back on their good credit. There's also information on how to do this online for FREE (PLEASE NEVER PAY ANYONE FOR THIS KIND OF INFO)

At this point (in about 45days) your credit has gone up enough for you to start applying for credit cards. Get a few to accelerate credit profile.

Make sure your DTI ( Debt to income ratio) looks good and you don't have to much to pay monthly. Also try to limit your cards to 10%.

The credit part should take you between 2-4 months. You will also need 2 years of work history (paystubs, tax returns) bank account history. And most important a down payment which could between 3%-20%.

Also remember your lender will look at all your 3 credit scores. Some lenders will pick the Lowest and some will pick the middle one but never the highest. And that will determine your rate%. Also if you have a co-borrower they will choose whoever has the lowest score between the two.

I hope this helps!

Hi,

thank you so much for the above. I'm guessing at this point it would be a bad idea to even try to prequalify? Both my mom and elder sister are in the 640 range of their credit score but my mom still is not making any money on papers (you know what I mean).

does the process of disputing take a long time? also I have heard people say don't even bother to settle paid off debt?

lastly, I keep reading that 590 above, you can qualify for fha. again I'm assuming not to even try with that low of a score?

Do this:
1) Download credit karma to monitor your credit score and request copies of your credit report from the 3 credit bureaus. Call up all your debtors and negotiate a lower payment to settle the debt. This amount could be as low as 1/5 of the current debt depending how good of a negotiator you are. The creditor will end up selling it pennies on the dollar to collectors anyways.

Once all debt are settled:

2) Ask your brother if you can be added as a authorized user on his credit card. His credit can raise yours (or lower yours depending how responsible he is). I added myself to my dad's credit card when I was 16 and now I added my brother, cousins, and a few friends to mine to help them repair their credit. For the most part everyone is around 700-780 now.

Find a mortgage broker instead of shopping at 1 bank at a time:
Don't run a credit check until you're ready to buy a house. Preappoval letters do not require credit checks.

hi, thanks for the input.

I heard there's no point in paying/settling anymore once your creditor sells off your debt?

What do you think about secured cards in terms of helping with credit?

Your welcome! always a pleasure to help out. With old debt is a yes and no and here's why. Paying a charge off account is not going to increase your credit but it could decrease it. You should only pay if the creditor agrees to delete completely from your credit. PLEASE DO NOT PAY ANY PAYMENTS ON OLD CREDIT AS THIS WILL RESET THE 7 YEAR CLOCK ON THE REPORTING. my suggestion is that if you do not owe hundreds of thousands of dollars do not contact creditor unless you are disputing.

The disputing part is 30 days. A creditor has 30 days to provide you with validation of your debt 30 days from your request. If they are unable to do so the debt gets deleted. Collection agencies buy accounts for pennies 90% those accounts contain no media (agreements with signatures, your IDs , invoices) that is why the disputing and deletion works. In the cases they do have proof of your debt you should only negotiate to settle (offer less money) or paid in full for guaranteed deletion. NEVER DO PAYMENT OR PAYMENT ARRANGEMENTS IT RESETS YOUR 7 YEAR CREDIT REPORT CLOCK.

Remember if there are multiple borrowers your lender will choose the borrower with lowest score and that borrowers lower or middle score from their 3 credit bureaus.

Yes a secured card is definitely a must. I recommend discover card. You actually get cash back and I believe there's not apr!

You are on the right path because you have to start somewhere. By this time next year I guarantee you you'll own a home if you make it a goal. It's no that complicated. Let me know if you have other questions I'm happy to help!

Yes, magnifica advice is correct about not playing the collection agencies. My terminology of creditor might of confused things.

Yes, definitely get secured cards. Try to get 1-3 to start. You will want to build more credit accounts as your credit score improves. It's recommended to have about 10+ credit accounts.

Hi, may I know the bank you’re refinancing with? I’d appreciate it. Thanks

Pretty courageous since our status is under threat.