BUYING A HOME: PART 1
I want to buy a house. What should I do first?
First, check your credit for any obvious adverse information that will affect your ability to get a loan. You may need to pay collection accounts, pay down credit card debt, correct inconsistent information between the 3 credit bureaus, or other things to build your score and give yourself a good credit presentation.
Bad credit can cause you to pay higher interest rates, higher insurance rates and keep you from qualifying for the best loan products. Learning how to improve and maintain your credit is the best thing you do for yourself and your family even if you don’t buy a home.
There are credit monitoring programs you can pay for that will allow you to pull your credit monthly and get notifications if there are any changes. They will also provide education material on how certain credit events will affect your score, ways to improve your score and clean up any unwanted credit problems.
You can hire a credit repair specialists to help you get incorrect or outdated information off your report, make sure that the 3 bureaus are reporting consistent information and teach you ways to build up your credit and maintain it in good standing. There is a charge for this service but well worth the cost to improve your credit and save money in costs and interest over the long term.
There are 3 main credit bureaus: Experian, Transunion and Equifax. Some creditors report to all three and some creditors only report to 1 or 2. When checking your credit some creditors will check all three bureaus and some will only check 1. A mortgage lender will check all three. It’s called a tri-merged credit report. They will also calculate a tri-merged credit score. Some lenders might take the median score, some the average score and some will use their own algorithm to calculate a score based on the information they receive.
Once you get the main part of your reports in good shape then you move to step two…………..
See PART 2