I speak with many people who feel they will never be able to buy a home of their own and you know what?  Unfortunately many of them won't.  Oh it's not that they couldn't.  It is that they defeat themselves before they start. This is the second installment in a series will help you to prepare to become a home owner.  

The next thing you will need to work on is your credit score.  You may have bad credit.  A low credit score will make obtaining a mortgage difficult (if not impossible).  You may have no credit.  Some might think that always having paid cash is a good thing but without any credit history the banks will have no way of gaging if you are a good risk for a mortgage loan.  There are things that you can do to improve that credit score and certainly ways to establish credit if you never had any.

First you need to check what your credit score is.  You can pull your own credit report at one of the many sites available but it may be just as easy and you can learn some great tips on how to improve things by meeting with a Mortgage Adviser.  I normally suggest that a potential home buyer contact the bank or credit union where they have their savings and or checking account and speak with the mortgage department there.  You can also check with a Real Estate Professional who can refer you to some Mortgage Advisers who work well with first time buyers.  These Mortgage Advisers can provide you with constructive ideas that will bring you to the point where you will be ready to buy at some point in the future.  


Avoid taking on new debt.  While you are working on your credit in order to qualify for a mortgage loan keep in mind that it is not a good time to take on major new debt.  Don't buy a car with a car loan or open multiple store credit cards.  Your debt to income ratio will affect the qualification on any mortgage and may prevent you from qualifying at all.





Pay your bills on time.  Being late with bills even if you do pay them will negatively affect your credit rating if you are habitually late.




 




Pay down the balances on your credit cards. Those with high credit card balances should start paying down credit card debt today.  Paying minimum payments will get you nowhere fast.  Every extra dollar you can pay towards the balance will help.




Establish credit if you have none. Those who have managed to get through life so far without any credit should open some sort of account.  A gas
card that is used to buy your gas and then paid off every month will help.  Some of you may need to look into a secured credit card until payment history can be established.








Thomas A. Edison said "Good fortune is what happens when opportunity meets with preparation"  I wish you good fortune as you prepare yourself for home ownership.

Part One of this It Can Happen To You series discussed how to save for a down payment and closing costs. 

Working with an experienced Buyer's Representative can help guide you to what is best for you.  I work in Orange, Ulster, or Sullivan County NY and I would love to be your Buyer's Agent. If you are looking elsewhere I would love to find someone in your chosen location to help you.  Give me a call or send an email today.