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4 Steps to Buying a Home

October 27, 2014 by  
Filed under Blogs, Real Estate

by: .

buy a house

Owning a home is one of the most rewarding experiences that you can ever have. But, before you start looking through home listings and going to open houses there are a 4 steps which you will need to take to be ready to buy your dream house.

1. Check Your Credit

Your credit score will play a very big part in determining whether you qualify for a mortgage, the maximum loan amount, and the down payment which you will need in order to buy a home. The higher your credit score, the better the terms of the loan and the lower your interest rate.

If your credit scores are too low or aren’t as high as you would like them to be, you can hire a credit repair agency like CreditFirm.Net to help you increase your credit scores.

2. Find Your Price Range

If you’re like most people, your going to need to fit your monthly mortgage payment into your budget. Figure out what you can afford to pay every month on your home and extrapolate that into the total price of the home which you will be looking for. This is where the down payment and interest rate comes into play. The better your credit score, the lower the down payment and interest rate, and the more you will be able to afford.

3. Get Pre-Approved

Find an experienced Loan Officer/ Mortgage Broker who will be able to get you pre-approved for a mortgage. The loan officer will take all of your information, check your credit, and tell you what amount you are pre-approved to purchase. This way, you will now be able to look for a home care-free, knowing exactly what amount you can have financed through a lender. You will also be looked at as a more serious buyer because you are already pre-approved for a mortgage and will be able to complete the buying process a lot faster than someone just starting out. This fact alone can save you thousands of dollars as you negotiate the final price of the home with the seller.

4. No Surprises

Once you find your dream home, agree on the price, and get the mortgage underwriting process going, it’s important to be as stable as possible before the closing. Lenders don’t want to see any surprises during the underwriting of your home loan. Incurring new debt such as purchasing a car, appliances, or furniture can throw your debt-to-income ratio out of whack and stop the entire process. So for the sake of your dream home, don’t buy anything on credit, don’t close any accounts, don’t even apply for new credit, until after you close on your home and have your keys in hand.

Getting your credit in order before you start the home buying process is not only smart, it can save you months of paperwork and thousands of dollars.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

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Banks Relaxing Credit Score Standards

January 28, 2014 by  
Filed under Blogs, Credit Score, Real Estate

by: .

mortgage

As interest rates continue to increase in 2014, mortgage lenders have begun to relax their credit score requirements for borrowers. In fact, the average credit score of an approved borrower fell by 21 points from 748 to 727 over the last year.

That same report also showed that the average debt to income ratio on approved home purchases increased from 34% to 39%. And the debt to income ratio on refinances increased form 33% to 41% from a year ago.

The strict lending practices from 2013 have shown to be paying off for lenders as mortgages originated in 2013 have been performing better than any year on record. This fact, in and of itself, proves that lending practices need to be loosened.

With lenders looking for borrowers that have excellent credit, a high income, and a large down payment, many consumers are being left behind and forced to rent through one of the best home buying markets in the last 50 years.

But, borrowers can still qualify for an FHA backed mortgage which only requires a 3.5% down payment.

The average credit score for an approved FHA home loan actually decreased from 699 to 690 over the last year. While the average credit score of a denied FHA home loan increased from 658 to 670.

The newly relaxed standards show that lenders are more willing to lend to borrowers with lower credit scores, but not much lower than before.

*Statistics from the Ellie Mae Mortgage Origination Report

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

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Getting Your Credit Ready To Buy A Home

December 5, 2013 by  
Filed under Blogs, Credit Repair, Real Estate

by: .

With interest rates and home prices so low, and rental prices so high, you may finally be considering buying a home.

And although purchasing a house is one of the best investments you can ever make, getting a mortgage in today’s economy is becoming more and more difficult.

Buy a home with better credit

So how do you get your credit ready to buy a home?

Here are 4 tips to help you improve your chances of getting a mortgage within the next 12 months.

1. Pay your bills on time.
Payment history makes up 35% of your credit score, and although you may have had past issues with paying your bills on time, stringing together a full year of on-time payments will show lenders and creditors that you have made a commitment to get your finances in order. The greatest benefit of paying your bills on time will of course be to your credit score.

2. Limit your inquiries.
Inquiries account for approximately 10% of your credit score and having too many of them will lower your credit and make it a lot more difficult to obtain a mortgage. So make a commitment to stop applying for credit for a period of 12 months. This means no new cell phones, credit cards, or any other loans where your credit will need to be checked.

This may not be the easiest thing to do, but consider that after just 12 months, you will be in a prime position to get the home of your dreams.

So practice some self control and don’t incur any new inquiries.

3. Pay Down your Debt.
If you have debt, whether it is credit card, auto loan, or personal loan, you need to reduce it.

Approximately 30% of your credit score is calculated by how well you manage your debt and ideally, your credit utilization rate (the ratio of your debt balance to your overall credit limits) should be at or under 20%. (Example: If you have a credit card with a $1,000 limit – your balance should never exceed $200.)

Also, under new lending regulations, consumers who attempt to get a mortgage will need to have a debt-to-income ratio of 43% or less. This ratio will include the potential new mortgage payment.

This means that at the max, 43% our monthly income will have to cover all of your debt payments, as well as your mortgage payment. And the only way to lower your debt-to-income ratio is to either increase your income or decrease your debt. Considering the mortgage lender will be looking at your average income over the last 2 years, paying down your debt may be the only realistic way of lowering your debt-to-income ratio.

4. Fix your Credit.
If you have derogatory accounts in your credit reports that are lowering your credit scores, they will need to be addressed. Fixing your credit is quite possibly the most financially rewarding investment that you can ever make. But make sure that you do your research before doing it yourself or hiring a credit repair company to help you. Here is an article which will help you get started to fixing your credit.

Follow this short guide to get your credit ready to get a mortgage, and you’ll be a homeowner in just 12 short months.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

New Consumer Protection from Predatory Loans

February 14, 2013 by  
Filed under Blogs, Real Estate

by: .
TILAs of January 10, 2013, the CFPB (Consumer Financial Protection Bureau) amended Regulation Z, more commonly known as the Truth in Lending Act (TILA). The amendment to regulation Z, called the “Ability to Repay” rule, requires creditors to make a reasonable determination whether a consumer is able to repay a loan before proceeding with any transaction.

This new rule will protect consumers from irresponsible and possibly fraudulent mortgage lending such as “no doc” and “interest only” loans which contributed to the housing collapse in 2008 and put many homeowners in foreclosure.

Finally, the CFPB proposed a new category of loans called “Qualified Mortgages”, which are mortgages where borrowers are highly protected from deceptive practices. These loans exclude programs like negative-amortization, where the monthly payment does not cover the accrued interest rate and the loan balance actually increases every single month.

Consumers should be able to trust the American dream of home ownership without worrying about losing their homes, getting buried in debt, or damaging their credit.

If your credit suffered as a result of predatory lending, let CreditFirm.net help you get you back on the road toward credit recovery.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

How to Fix Bad Credit to Buy a House

by:

A good credit history is very important these days.

Especially if you plan on buying a home.

Consumers with good credit scores easily qualify for mortgages, and save hundreds of thousands of dollars by getting low interest rates. On the other hand, consumers with bad credit have a lot more difficult time obtaining mortgages.

Individuals with bad credit end up with high interest rate loans, large down payment requirements, and very often get denied for home loans altogether. But fortunately, bad credit doesn’t have to be a permanent problem. There is a solution for bad credit which will help you qualify for a mortgage loan in the future.

Instructions:

onePay your current bills/debt on time. If you’re struggling to pay your bills on time, you will need to create a budget  which outlines your income and all of your expenses. Cut back all non essential expenditures and make sure that you do not make any late payments.
twoMake payment arrangements. If after cutting back your expenses your income still can’t cover your bills, contact your creditors to work out alternative payment arrangements and make sure to make all payments on time per your agreement.

threeReduce your debt.  Debt is kryptonite to mortgages. A high amount of debt lowers your credit score and increases your debt to income ratio (DTI), which makes it more difficult if not impossible to get financing. Pay down your debt, start with your credit cards and pay them down until the balances are no more than 30% of the credit limits. Then, pay down your debt to get your DTI down to 31% or less.

Repair your payment history. If you have derogatory accounts such as late payments, collections, charge-offs, repossessions, etc… appearing on your credit report, you will need to repair your credit history.  Payment history accounts for 35% of your credit score and removing these types of accounts will help increase your chances of getting a loan. You may either fix your credit yourself or hire a professional credit repair agency like CreditFirm.net to help you fix your credit report.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

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