Rose Barrett

(o) 404.843.2500   (d) 770.316.2051
Rose Barrett

Preparing to Buy Your Home

How Much Home Can I Afford?

Whether buying your first home or your tenth, there are several factors that play into how much house you can afford.  It is not about home much money you make or have to put down on a home but also how good your credit is, plays a very big part.  Lenders will pull and use your credit score, a ranking based on your bill paying history.  Have you paid on time and in full  to determine the risk of lending you money and the likelihood you will repay the loan on time. If you have a lower credit score , it does not mean you can not qualify!  But you’re considered a higher risk and may have a harder time obtaining a mortgage with the same interest compared to other buyers with a high credit score.

The first step in the home buying process is to find out what your credit score is,when working with a lender listen to what errors they tell you to fix  and take steps to improve your credit if necessary. Here are some tips to help get you started.

Obtain Your Credit Report

 

Credit reports are serviced by three credit reporting companies: Equifax, Experian and TransUnion.  Important items found on a credit report are:

  • Your credit payment history
  • Do you make your payments on time
  • Have you run into serious credit issues

You will see a different credit score from each company because they use the same formulas to calculate it.

The Fair Credit Reporting Act entitles you to one free credit report per year from each credit bureau. You can get these directly from the bureaus, from a variety of websites like AnnualCreditReport.com or from a mortgage broker like Metro Brokers Financial.

 

Correcting Errors

Some common mistakes on your credit report:

  • A bill that is not yours 
  • Hospital or Doctor bill still showing unpaid
  • Same name but different suffix (Sr., Jr.) showing on your report

Visit the credit bureau’s website for instructions on how to begin the correction process. You will want to:

  • Submit a written request to the bureau
  • Keep a copy for your records
  • Keep records of any communications between you and the bureau
  • Follow up regularly

Improving Your Score

If your credit score is lower than 700, you may want to work on improving your credit score before applying for a mortgage because you may not be eligible for the best rates.

Many people have had success with the Credit Doctor.  This is a website you can visit designed to diagnose your credit health and prescribe a plan of action that could potentially change your credit score.

Make sure to pay all of your bills on time and in full.  Do not incur any new debt like auto loans or department credit cards.   This can prevent you from getting the same low rate you were originally offered. Also look at paying down some of your debt, like your balances on credit cards.

Talking with a Lender may be your best solution.  They can let you know what steps to take and when to do them.  They can also give you a time frame.  Best part, most of them do not charge a fee for this service because they want to build credibility with you.

Metro Brokers Financial, Inc., 5775-D Glenridge Drive, Suite 200, Atlanta, Ga. 30328 A Georgia Residential Mortgage Licensee # 5892. NMLSR Unique Identifier # 163853. 404-847-2525

Better Homes and Gardens Real Estate Metro Brokers, Atlanta, GA. A licensed real estate broker in Georgia, North Carolina, South Carolina and Tennessee.

© 2017 Better Homes and Gardens Real Estate Metro Brokers®. Better Homes and Gardens is a registered trademark of Meredith Corporation licensed to Better Homes and Gardens Real Estate LLC. The services provided by Metro Brokers Financial, Metro Home Mortgage, Metro Brokers Insurance, Metro Title Trust and Metro Law Group are not provided by, affiliated with or related to Franchisor, Realogy Corporation, Meredith Corporation (or its affiliates) or the Better Homes and Gardens Real Estate System. Equal Housing Opportunity. Each Firm is Independently Owned and Operated.