THE ABC'S OF CREDIT

THE ABC's OF CREDIT

The number #1 rule in real estate is to find a ready, willing, and able buyer.  It is incumbent upon real estate agents to find ICE Buyers: Income, Credit, Employment.  A credit ready client is a credit worthy client  with  financial ability to purchase a home.  Real Estate Agents must determine a "homebuyer" from a "window looker."

ICE Buyers possess the necessary financial credit requirements necessary to acquire a FHA loan.  Congress and the American Banks have mandated homebuyers have a minimum 620 credit score.  FHA Loans are fixed interest rate loans which  include: principles, interest, taxes, and insurance (PITI).  FHA credit guidelines require ICE Buyers make 12 timely monthly payments within the last 12 months.  FHA forgives debts in collections, and maximum of $5,000 in medical expenses. If you have a Chapter 7 bankruptcy, you can acquire a FHA Loan in three years. FHA Loans will be granted to prosepctive homebuyers  in a Chapter 13, as long as the homebuyer has made 12 consecutive months of timely payments, and the bankruptcy administrator or bankruptcy judge approves the home purchase.  If you have a foreclosure, you can acquire a FHA Loan within two years. 

The Federal Trade Commission (FTC) establishes guidelines for three credit reporting agencies: Equifax, Experian, and Transunion.  The Federal Trade Commission (FTC) and Congress created the Fair Credit Reporting Act to protect credit consumers.

Fair Credit Reporting Act

• You have the right to ask for your credit score.
• You have the right to dispute incomplete or inaccurate credit information.
• Consumer reporting agencies must correct or delete inaccurate information.
• You must give consent for reports to be provided to employers.
• Identity theft victims and active duty military have additional credit rights.

FICO created  nationwide credit scoring system called  FICO Credit Score.   Three Credit Bureaus comprise  credit averages for credit consumers. Equifax, Experian, and Transunion utilizes  FICO score, whereby mortgage brokers and financial institutions can effectively determine the credit worthiness of credit consumers.  Example: If your Equifax credit score: "675," Experian credit score: "650," and Transunion credit score: "625."  Your FICO score is "625." Mortgage brokers and financial institutions use the middle credit score as the proverbial average credit score. Your Loan To Value (LTV) or Debt Ratio is your total monthly debt minus your total gross monthly income.  Your mortgage broker can approximate the amount of home a consumer can afford by LTV or Debt Ratio.  FHA requires LTV or Debt Ratio between 32% and 35% of your gross monthly income.  Consumers learn the ABC's Of Credit  to graduate to homeownership.  Homebuyers must fire your Landlord, and hire William "Super" Byrd (404) 992-1513.