By: Elizabeth Flynn
As the Digital Media Director of RE/MAX Access I get a lot of questions from friends and potential clients about how to improve your credit to qualify for a mortgage and buy a house. One of our Facebook fans reached out to us to ask how she could purchase a home making $140,000 per year with a credit rating in the 550’s. My advice to her applies to all potential homebuyers. RE/MAX Access can help a buyer through the entire process of credit rehabilitation to the dream of home ownership.
I’m doing it and so can you!
We are currently developing a program to help first time homebuyers navigate the hurdles towards buying a home- including credit! Keep your eyes out for when we have this up and running. This is something that I have gone through myself. I have been rehabbing my credit for the past four years and have recently pre-qualified for a mortgage through our in-house lender, Quaint Oak Mortgage. My advice to you is this- if you and your husband are making $140,000 a year, you should be able to create a plan to pay off some of your debts and improve your credit rating.
I brought my own up from 540 to 681 through getting my student loans out of default and paying in a timely manner, paying off any outstanding collections accounts on my credit (most collections companies will take a fraction of the outstanding balance to close the account, or will let you create a payment plan), and maintaining low balances on the credit cards I do have. Pay off accounts in collections first, then pay down your cards based on which ones have the highest interest rates. Your ability to qualify for a mortgage is based on your debt to income ratio, so holding low balances is very important.
If you really apply yourself to this process it does work.
I used a free online program called creditkarma.com to monitor my progress. I keep all my due dates set with multiple reminders. I also found a lot of financial advice on the website lifehacker.com. RE/MAX Access can also introduce you to a trusted credit counselor. I know it seems like a long process, but if you commit to it you can begin a lifetime of accruing wealth for your family, rather than paying more for rent and high interest rates. The lower your debt to income ratio is, the better interest rate you will qualify for on your mortgage.
You’d be surprised that with a low interest rate your mortgage can be equal or less to what you pay in rent, and you will be generating equity with every payment. Create a financial plan for your family that includes these short term goals, and then work on the longer term ones.
The Author’s Cute Family!
Having an organized and informed plan for your financial future is so important. If you’d like to come in and talk to our mortgage company about pre- qualifying for a home loan, I can certainly arrange that. We can also pair you with a buyer’s real estate agent that specializes in the area where you’d like to focus your search. I’m available all the time to help you with your process. If you’d like to call me in the office our number is 215-400-2600. RE/MAX Access is committed to helping all of our clients achieve the dream of home ownership and we can help you from beginning to end.
Every agent and all the staff at RE/MAX Access helped me!
We’re here for you,
Digital Media Director