With interest rates at an all time low, and so many new loan programs, it is a great time to buy real estate. First time home buyers have access to many bank and government incentives. Yet, in order to qualify for a bank loan, first time home buyers should plan ahead. A good budget plan begins one or two years before making an offer on a dream home. The following are some general tips, that as a title agent and real estate lawyer, I offer to potential buyers:
1. Build Strong Credit. When its time to apply for a loan, credit is king. A low credit score can hinder a buyer from either obtaining a loan all together or cause the lender to offer a very high interest rate. Thus, making the loan unaffordable. However, credit is easy to build and correct. Start by obtaining your free credit report at Annualcreditreport.com and making sure that all items that appear are accurate. If something is not accurate or was paid and not corrected by the creditor, you can write to the credit bureaus or creditors and have this corrected. Or, you can enlist the services of our firm to help clean up your credit.
2. Improve Your Credit Score. When applying for a loan, lender look at your credit report and your FICO score. To improve your credit score, it is advisable to:
- Payoff past due bills
- Pay bills on time
- Reduce balance to less than 30 percent of the credit limit on each account
- Have a minimum of three credit accounts, such as car loans, student loans or credit cards that are in good standing and open with positive history for one year or more.
3. Pay Bills on Time. Young people don’t realize the effect that paying bills late has on their potential to obtain new loans or an affordable one. A late paid bill or credit account, can make all the difference in an interest rate of 4.0% to 5.5. On a mortgage of $150,000.00 that is a $187.50 dollar difference in the monthly payment. Causing a mortgage, based on limited income, to be unaffordable.
Also, beware of scams. Adding yourself to a credit card loan, as an authorized user, for the sake if improving your credit, has no results on improving your score or risk factor.
When you are ready to buy, contact us. At the Law Offices of Jacqueline Salcines, P.A. we represent buyers both with fixing their credit to make sure they get the best possible program and rate, as well as with contract preparation and closing services.
Acting as both real estate attorney and title agent, we represent the buyers in their real estate transactions and work closely with your lender to make sure you are given the best possible mortgage rate, terms and at the lowest costs.
Attorney Jacqueline Salcines, Esq. personally handles all her own closings and is at the closing table with you to personally explain all documents required at closing.
The Law Offices of Jacqueline Salcines, P.A. is a full service real estate law firm offering real estate, title, mortgage and escrow services.
Contact us today. No office visit is required and the phone consultation is 100% free of charge. Call and speak to attorney Jacqueline A. Salcines, Esq. Today!
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Jacqueline A. Salcines