The Real Estate Browser Volume 8, Issue 5

14 — Say you saw it in The Real Estate Browser of Lynchburg — Volume 8 Number 5 www.LynchburgRealEstateBrowser.com Take Control of Your Credit By Sherry Brady, NMLS 217258, Branch Manager, Summit Mortgage Corporation Have you ever heard the old saying “you have to have money to make money”? The same is true with many things in life. It’s easier to get a job, if you already have a job, or at least some work experience. It’s a lot easier to make money, if you have some money to invest. And the truth that I encounter on a daily basis is that it’s a lot easier to get credit, if you have credit; particularly if the credit you are trying to get is a mortgage loan. then a good credit score will usually follow. Here If you’re hoping to buy a home someday, or make any purchase that requires the use of credit, you need to build a credit history. It’s difficult (dare I say impossible) to convince a lender to loan you ten’s, or hundred’s, of thousands of dol- lars if you have no way of proving that you’ve ever successfully repaid a loan in the past. What’s important to understand is that you can’t wait until the day before you start looking at houses to think about this; you need to be working on your credit profile month’s in advance. opened several new lines of credit). is a breakdown of factors that contribute to a good credit score: 1. Payment history (do you pay your bills on time); 2. Amount owed (are your credit cards maxed out); 3. Length of credit history (how long have your managed credit); 4. Credit mix (do you have various types of credit such as installment loans, credit cards, and a mortgage); and 5. New credit (have you recently Lenders also now look at trended credit data, so it’s possible to see a two-year historical per- spective of a potential client’s credit utilization and habits. This will show lenders whether you typically carry a balance, or charge something on your credit card and pay it off immediately, also whether you typically pay the minimum or more than the minimum. Whether you pay your bills There are three components to getting approved for a mortgage loan: Credit (will you pay), Capacity (can you pay), and Collateral (is what you’re buying worth the price you’re paying for it). If the first one – credit – isn’t accept- able, then the other two won’t even be evaluated in most cases. When it comes to determining if you have an acceptable credit history, a mortgage lender is looking for a certain credit score, but they also want to see a minimum of two to three lines of credit with at least 12 months of recent history being reported on them. on time has always been important, and now, how If you have two or three accounts, which are open, active, paid on time, and not maxed out, experienced guide you can relax a little, enjoy the http://www.lynchburgrealestatebrowser.com/index.php?/properties/price_reduced http://www.lynchburgrealestatebrowser.com/index.php?/properties/price_reduced for the latest REDUCED properties. you pay will also be a consideration. These days, we have plenty of online tools designed to make the process of getting your loan easier than ever before, but it still requires some thought and planning on your part. The best place for you to start is by talking to a qualified lender who can lead you through the process. Be sure to contact us early in the process. While there’s much to think about, once you have an journey, and start picking out your paint colors! for the NEWEST LISTINGS. http://www.lynchburgrealestatebrowser.com/index.php?/properties/newest_listings

The Real Estate Browser Volume 8, Issue 5 | Page 14