Are you excited to start shopping for a new home? We are excited for you!
Dave Radcliffe of The Radcliffe Group, Keller Williams Realty Southwest Las Vegas and Wes Friedman with Southern Fidelity Mortgage are here as your guides to get you successfully through home buying and lending process.
Pulling your credit is the starting point in getting a home loan and starting the shopping experience. Pre-qualifying early when looking to purchase a home is a key element, not to be overlooked. Your Realtor will work with and partner you with a lender that can help. Understanding your credit is a key factor as there are a lot of things that are taken into consideration when applying for financing.
Are you maxed out on your credit cards? A high balance is considered over extended credit. What is a high balance? 20% of the high credit limit or more is considered high. A maxed out and over extended card will report negativity to the credit bureaus so watching your limits and paying down balances owed is very important. Keeping your card at a manageable balance (one that you can pay down timely) is a key factor to increasing your credit score.
Do I pay them off?- We know that sometimes people get into trouble and end up in collections. Paying off your balances can be important (BUT STOP and KEEP READING). Paying off the collections seems to be the right thing to do (Right?) BUT understand that you should NOT PAY OFF a collection unless the creditor agrees to DELETE the collection reporting. Once you pay off the debt, you have no negotiating leverage to get your credit cleaned up. (You won’t owe the balance, but it will still show negatively on your reports.
New vs. Old- The date of a collection can affect your credit score. Newer collections have more of a negative impact (even if they are for lesser debts) than some of the older collections. Lenders want to see you have changed your bad habits and can be trusted to stay current.
Underwrites will make you remove an authorized user account because typically it is Mom and Dad adding you to their credit lines (so you have a card), and this does not show the propensity for you to repay your bills (because Mom and Dad pay it). Lenders know this. If you are going to be added to someone else’s trade line, do it as a join account holder not an authorized user account. Lenders want to see you take on the responsibility and ownership of paying off your own debt. (Don’t open a new trade line without speaking to your Lender first.)
Credit card inactivity can actually hurt your credit. The rule of thumb is to have 3 active revolving lines of credit. If you are only using 2 of your 3 cards, the unused card may be reporting negatively. Use each of them sparingly and pay them off monthly.
Watch inquiries- Going from one creditor/mortgage shop, to the next to the next will cause scores to drop. A good Lender will provide you with a credit report and you can still do comparison shopping without affecting your score.
A mortgage is an important part of your score. 35% of credit composite is mortgage history. Without a perfect mortgage history you cannot have a perfect score.
First: Get copy of credit report and have it analyzed by a professional. If you need to make repairs to your credit it can take 4-6 months to improve it and change your qualifying ability at the highest and best rates available.
Don’t assume you know what you are doing on your own, give Wes a call and he will set you up with a FREE ANALYSIS and get you on your way to home ownership. We are here to help you get the lowest interest rate at the best possible house.
Thank you so much for watching. If you need more information go to my website or give me call. As always, we always love to talk to you about all of your Las Vegas, Centennial Hills, Summerlin, and North Las Vegas real estate needs. (702)379-3401 www.DaveRadcliffeVegas.com