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Credit Concerns When Buying a Home

Posted on April 13 By MLP Blog

Know Your Credit Scores Before Closing Day

House hunting can be one of the most exciting times in your life. If only it didn’t have to be one of the most stressful too. The culmination of hard work and saving money to finally purchase your own home is almost always coupled with the uncertainty of securing a home loan.

You may have found the perfect place and you’re all set to close the deal, but then you sit on pins and needles while a lender holds your fate in their hands. This shouldn’t be the first time that you consider what past financial mistakes might be working against you.

Your decision to take a look at your credit scores should come before you begin the house hunting process. More than ever lenders are adhering to strict credit score guidelines when it comes to your approval. If you’ve allowed bad credit or debt to linger, you may find yourself rushing to find a lender that’ll approve you in the 11th hour.

Look At Your Credit Reports

If you don’t want to lose sleep over mortgage approval, your best bet is to know your score before you apply. The credit bureaus offer a free credit report each year, take them up on it. Ultimately credit repair is just making sure that your reports are 100% accurate. Whether you choose to do it yourself or go with a professional is a matter of personal preference.

Before you start tinkering with credit repair though, you need to understand that fixing your credit won’t result in a perfect credit score, but it may boost it enough so that you’re confident in your loans approval. An added benefit is that higher scores could mean lower interest rates.

Outstanding Debt

Unpaid debts tell potential lenders that you haven’t been responsible with the money you’ve borrowed. See if the collectors will accept a debt settlement offer. Often times collectors will even agree to stop reporting the debt to the credit bureaus if you pay them in a timely manner.

Plan Ahead

Once you get the impulse to start looking for a house, make sure you get all of your finances in order. This includes your credit profile. Your credit score isn’t the only factor that plays a part into the lender’s approval process, but it does carry a lot of weight.

If you’re making sure that your credit reports are accurate and up-to-date about 6 months to a year in advance, you’ll have a better chance of walking away from the home loan process with a smile.

Only you’ll know for sure whether you need credit repair or debt relief, but one thing’s definite; if you never bother to check and simply hope for the best, you could end up completely discouraged by the whole idea of looking for a new home.

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1 Responses to "Credit Concerns When Buying a Home"
  1. Kevin Hardin 13, Jun, 2010

    Justin, you have a pretty good handle on it. Yes, HEFI has had over 8 years invested since the Patent was authored, now allowed, contains 28 separate Patent claims. There are over 30 more pending. EquiDebt was created out of the work that I did at Thomson Conant, PLC with Neil Thomson to draft a solid security instrument to meet the demands of today's market. That was two years of legal work to arrive now. What is secures though is not new. Equity Sharing where two parties in a real estate transaction share in current equity and future appreciation is not new and the National Housing Institute researched over 800,000 homes and 30 years of use. What this patent does is create a secondary market for those HEFI interests so that institutions can invest in them and being some liquidity to the market. I look forward to sharing more with the Real Estate community about how this will change the face of financing for property purchases and sales.

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