You’ve done it. You’ve made the decision to forgo paying someone else’s mortgage and kiss the “ Life of Renting” goodbye. As you wave to this mile stone in the rear view mirror, you are invigorated with the sense of excitement for the next step. Come to think of it, what is the next step exactly? Do I pull all my money from retirement plans and deposit them into a savings account as a down payment? Do I look into trading in my car? It’s approaching the third year and I’m not sure if I want to tie myself to this car for another three years. Do I trade in my car for a newer model, hopefully a lower payment to lower my monthly expenses? What about my credit cards? This one card does have a considerable balance from my emergency root canal two months ago. When was the last time I pulled my credit, and is that score still valid? These questions can flood your mind all at once, and can result in a frenzy of unorganized information and misguided steps.
The primary decision is to seek educational guidance on the home buying experience. Better inform yourself of the real estate market process and obtain a completed certification course. R.E.A.C.H offers First Time Home Buyers Courses every month in our Miami and West Palm Beach offices. There are two classes a month, which allows flexibility in registering for the course at your own schedule and location. You will have a “One on One Session” with a designated Housing Counselor who will review your credit report in detail, and your FICO score will not be affected by this action. You will be placed on a specific action plan to obtain your home buying desires.
In this detailed two-hour meeting, a through credit review process is completed. Your dedicated Housing Counselor will give you an estimation of expected approval amounts based on your debt to income ratio and annual tax information. Estimations are positive as they prepare you for all case scenarios when you sit with a Mortgage Broker completing the loan application. If your credit report has some unexpected life events, such as late payments, delinquent student loans, medical expenses that have been assigned a collection agency, and settlement agreements of charged off credit cards or even unresolved civil proceedings – you are given a tailored timeline of what items need to be addressed and scheduled a follow up appointment to continue the repair and restoration process.
Anyone can experience a negative reporting, however, it’s how these unfortunate events that appear on your credit report are resolved that make the difference of an approval or denial. Lenders are interested in several items when underwriting for a mortgage:
- Consistent stable job history
- Payment History of installment and revolving debts
- The percentage of the available credit used vs. availability
- Amount of funds set aside for potential down payment and closing costs
- Negative History and the current status of such accounts
- Remaining available monthly balance after all financial responsibilities are paid
Your Housing Counselor will be with you every step of preparation on your lending experience, and it’s their primary responsibility to make sure you are well informed of your potential contract terms and approval conditions. It’s our goal to make your home buying process as simple as possible, even with bumps in the road. We’re prepared and equip to handle these matters.
R.E.A.C.H. also offers Credit, Budgeting and Restoration Counseling, in addition to other excellent services. By becoming a member through our Neighborworks, your membership opens the doors to all our course services for one calendar year at a discounted rate. With your membership commit, we make the commitment to you to help you with the best of our ability and resources to help you reach your goals in successfully obtaining a pre-approval.