Sometimes what prevents people from buying versus renting is the lack of knowledge. Here are 5 things you should know before making the decision to rent.
- Down Payment Assistance – Our buyers are thrilled when they find out that the city they want to live in offers down payment assistance. Some grants don’t require the buyer to pay the money back. Make sure you interview several Lenders to see how knowledgeable they are of grant programs. There are a few mortgage companies that offer their own grant programs as well.
- FICO Scores (aka Credit Score) – Buyers are quite surprised when they find out that mortgage companies have different credit score requirements. Our Buyer was declined on a mortgage loan the week that he was to close on his home. He contacted another Lender and was able to close on the house just a week and a half later. If you have had a hiccup that has impacted your credit, make sure you ask the Lender what the minimum credit score requirement is.
- No Credit – If you have no credit, some Mortgage companies will build your credit. They typically need a payment history on three types of bills (e.g. water bill, gas bill, cell phone bill, rent payments, etc.)
- Co-borrowers – If two people are purchasing a home and one person has poor credit, the mortgage company can look into lending the money to the person who has good credit. This also helps people who are self employed. If one person works for a company and receives a w-2, the Lender may decide to keep the self employed person off of the loan application.
- Lenders Are Credit Experts - Many Lenders are willing to give free advice on what the buyer needs to do in order to increase the credit score so that the person can buy a home in a few months. It is discouraging to hear that it is impossible to purchase a home. Seek a Lender who is willing to give you free on-going guidance as to what needs to be done in order to qualify for a home loan. Don’t give up!