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10 Steps to Buying a House

A Roadmap to Home Ownership

August 16, 2018 by  
Filed under Blogs, Real Estate

how to buy a house

Buying a house doesn’t have to be complicated. Use the following roadmap as a guide to help you understand the journey that you will need to take to purchase a home. There is no set timetable, your journey can be short or long depending on several different variables like your credit but, having a plan will ultimately help you avoid some common pitfalls and achieve your goal of home ownership.

1. Check Your Credit Reports and Scores
You can access your credit reports for free at a myriad of places like annualcreditreport.com, creditkarma, creditsesame, etc… but, if you want an accurate credit score (FICO score) you will want to go to myfico.com. MyFICO.com will give you your credit reports from all 3 credit bureaus as well as 37 different FICO scores including the scores used by mortgage lenders for home loans.

Make sure that the information in your credit reports is 100% accurate and if your credit score isn’t high enough to qualify for a mortgage or too low to get the best interest rates and terms possible, you will want to work on improving your credit scores.

2. Improve Your Credit Scores
If your credit scores aren’t up to par you will want to work on increasing them. Feel free to use this quick guide to help you increase your credit scores or you can always hire a professional credit repair company to do the work on your behalf.

3. Figure Out How Much You Want To Spend On A Home.
You’re the only one who can determine how much you can afford to pay for down payment, your monthly mortgage payment, insurance, closing costs, etc…

For example, determine how much money you have available for your home purchase by adding up all of the available money that you have, your checking accounts, savings, investments, and cash.  Then, subtract moving costs, money for renovations for your new home, a small emergency fund, and you will have the amount that you can allocate toward a down payment and closing costs. According to Zillow, on average buyers pay roughly $3,700 in closing cost fees.

4. Explore your mortgage options. 
There are many different types of mortgages out there, conventional, FHA, VA, USDA, Jumbo, etc… Research the different loan terms, interest rates, and talk to lenders, loan officers, and mortgage brokers to help you decide the type of loan that fits you best.

5. Get Pre-Approved. 
A pre-approval means that your income and credit have been verified through documents which you provided and you are pre-approved for a mortgage. Don’t get this confused with a pre-qualification which is solely based on loose information from your credit and your DTA (Debt to Income Ratio).

A pre-approval letter helps show sellers that you are a serious buyer.

6. Find Your Home.
This is the fun part. With a pre-approval letter in hand, you drive around looking for your dream home. You already determined your budget so you know what you can and cannot afford. Once you find your dream home make an offer. Don’t be discouraged if your first offer isn’t accepted, negotiate.

7. Compare Loan Terms.
Get some estimates from a few different lenders and compare the terms, rates, and monthly payment amounts. Find the loan terms that you are comfortable with and get the best deal possible.

8. Choose The Loan That’s Right For You.
Choose the best deal on the table and submit your documents to get ready to close on your new home.

9. Shop For Closing Services. 
At the top of page 2 of your Loan Estimate, there is a section titled, “Services you can shop for.” These include services such as the property appraisal, title insurance, home inspection, etc…. Your lender will give you a list of service providers but, there’s no requirement to use them. Feel free to shop around and save yourself some money with less expensive options.

10. Close on Your New Home. 
Examine the closing documents to make sure that there are no errors and all of the terms are as you previously agreed upon. Then, sign the closing docs and get your keys.

Now, it’s time for some Champagne.

NOTE: If your credit score is holding you back from being able to qualify for a mortgage, CreditFirm.net is here to help improve your scores and get you ready to buy a home.


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.

CreditFirm.net Review

How to Increase Your Chances of

Getting Approved for a Mortgage

August 13, 2018 by  
Filed under Blogs, Real Estate

how to buy a house

In a previous article, Credit Firm discussed the importance of fixing your credit and paying your debts in order to buy a house. While that is important, there are also other factors to consider when looking to get a mortgage approved. Aside from credit and debts, here are some other steps to take:

1. Update your documents

Before meeting with the lender, make sure all your necessary documents are in order. This will reduce the requirements needed by lenders, thereby speeding up the application process. Bankrate compiled some questions to expect from lenders including the paperwork they usually ask from applicants. In general, you will need to present documents to prove your annual income, additional earnings, debts, and assets.

2. Maintain a good savings history

The key to gaining your lender’s trust is to prove you are capable of saving money. For that to work, you will have to avoid making major purchases. Hold out until after the approval. Also, your savings will come in handy for two purposes: firstly, it will be used for your down payment, and secondly, it can be used to cover other requirements in your application.

3. Make a large down payment

Most first-time buyers worry about coming up with the 20% mortgage down payment. However, the Los Angeles Times notes that most people don’t follow that practice, as 54% of all buyers over the last five years put down less than 20%. However, it was stressed that there are many benefits to depositing 20% as a down payment, including lower monthly payments and lower mortgage interest rates. Big deposits will help you reach mortgage approval faster, but as mentioned earlier, you should still leave enough funds for other expenses.

4. Ensure your employment is stable

Since lenders will need proof of your income, it’s recommended to stick with your employer during the home buying process. Being self-employed or failing to hold down a permanent position for a long period of time will not leave a good impression on them because they will see the loan as a risk.

Furthermore, the first set of accounts may take over a year to be audited. Some lenders will even request two years’ worth of accounts. In short, do not apply for a mortgage if you plan to shift jobs in the near future.

5. Seek expert advice

You have the option to ask for help from HUD-approved housing counselors, who are trained and certified by the government. Housing counselors will assess your financial situation and help you determine your options if you have problems with loan payments. You can use the Consumer Financial Protection Bureau’s Find a Counselor tool to get a list of HUD-approved counseling agencies near you.

Aside from counselors, you can also ask assistance from licensed CPAs when it comes to financial matters. Maryville University’s summary of its bachelor’s degree in accounting revealed that trained accountants will be able to give sound advice on financial planning and management. They are equipped with knowledge of financial reports, income taxes, and auditing, so they will be able to help you with your unsettled accounts, tax liabilities, and other shortcomings. In case there are any other complex problems with your mortgage application that you can’t solve on your own, seeking expert advice is your best bet.

As mentioned at the start, a key part of speeding up the mortgage application process is keeping your credit in check. On that note, consider Credit Firm’s services, since we offer an easy 3-step process for you to fix your credit. Keeping all these tips in mind, you may be able to get your mortgage loan in less time.

Article composed by Sophie Morgan for creditfirm.net

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.

CreditFirm.net Review

Banks Relaxing Credit Score Standards

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

by: .


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.

CreditFirm.net Review

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

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