We are looking to be 1st time home buyers. We want to close no later than July 2014, because the lease is up at our rental house Sept 2014. Our credit can use some work, and we hope the time between now and then we could repair it because we have more money coming in from an additional new job. We will also be in the position to have 20,000 saved by the time of purchase for down payment. We hope to get approved in the 200,000 range, meaning a 10% down payment. Should we try to fix our credit on our own by paying off old bills and keeping cc balances down or should we go ahead and apply for a home loan and let them tell us exactly what to do to fix our credit? I went to a 1st time home buyers workshop last weekend and the bank there said they can tell you almost exactly what you need to do to get your credit in place for underwriting. Which should we do?Answer Question
Asked by Anonymous at 4:27 PM on Mar. 3, 2013 in Home & Garden
Answer by san78 at 4:39 PM on Mar. 3, 2013
Answer by staciandababy at 5:00 PM on Mar. 3, 2013
Answer by silverthreads at 5:02 PM on Mar. 3, 2013
Answer by kujus04 at 5:44 PM on Mar. 3, 2013
Answer by ohwrite at 6:52 PM on Mar. 3, 2013
The loan app counts as a credit inquiry, which lowers your credit score a little if you have lots of inquiries. This includes other creditors you don't even know about that perform credit worthiness inquiries for pre-approved credit card offers. Hence, why it's important to call the credit bureaus to opt-out of this kind of access. Your cc balances should be consistently relatively low or paid off at least 6 months prior to the home loan. Underwriters look for a history of responsible credit use and reliability of income sources. Get your free gov't credit report and fix any errors. The bank can't tell you what to fix unless they make a credit inquiry, too. I think you are referring to a Pre-Qualification. Pay off high credit card balances first, then anything else. Don't make any huge purchases for the next year.
Answer by hellokittykat at 3:45 AM on Mar. 4, 2013
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