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Hello I interested in your loan programs. Could you please contact me. My number is [phone number removed]. Please don't call from a block or unknown number cause I won't answer. If you perfer we could communicate via email first. My email address is [email address removed]
Thanks so much.
Note: WHEN and only when your score is at an appropriate level shop around. You will have a 30-45 day window where you can do hard check after hard check without destroying your score. Credit agencies understand you are shopping around. Trust VA and (hopefully you have a great realtor you can trust too). They will guide you through the process. Understand what you are paying TOTAL. After mortgage, insurance, trash, water, electric, etc... can you afford it?
I'm not sure if this has been covered, but Article and Carl make great points. I would like to clarify this for anyone trying to save/boost their credit to get that down payment, loan, or any financial endeavor.
So, closing credit accounts can slightly, negatively impact your credit score for a short period of time. However, only stopping to use a credit line (while making payments), without closing it, will actually reduce your debt and effectively improve the credit score.
Why is this? There are a few reasons, but the main, and most impactful is that the credit score is affected by the ratio between available credit and used credit. ie. A card has a credit line of $1,000 and a balance of $500. Assuming this is someone's only card, they have a 50% consumption rate: they are using half the credit provided to them. Someone who shows a history of maxing out credit or having a rate of 100%, 1:1 available credit to used credit, will have an unfavorable impact on their overall score. Now, this is only one components; it is completely possible for someone to use a large amount of their credit consistently but if they're doing other positive things like paying regularly, they may not notice any negative effects because of the offset of the positive.
Hope that was helpful! With that said, if someone has debt on their credit lines, ending use (not accruing additional debt) and continuing to pay them down will give this individual a lower percentage of use and therefore reflect better on their credit history and report.
Lastly, for someone not worrying about that credit score mumbo jumbo, but they just want to save money! This process helps them as well because with credit comes paid interest. So, the sooner that debt gets paid down, the less interest will be paid and the more one can save. In addition, once in the position to do so, use as much credit as you like and if the balance is paid off before the interest is scheduled to kick in you will not have to worry about credit taking more of your money and still get the benefits of owning a card (card points, miles, longer credit history, growing credit score, etc.).
Actually, very last thing I would like to add in is that the longer your credit history has a positive impact on credit scoring; just as being over 21 or 25 could give you a better rate on a rental vehicle. When you completely close a line of credit it no longer is involved in the length of the ongoing open history. Let's say you have to lines of credit, one 10 years old and the other two. If you decided to close the original line (10 years old), you would be left with only two years of open credit history. Due to longer history giving a positive impact, shortening the history effectively has a negative impact.
Moral of the story, if you are trying to save and build credit, responsible credit use is a great start! But for some that may mean leaving those credit lines open, paying them down, and not using them until they are payed down. For others it may mean using them all the time and making sure that "Credit Utilization" rate is not too high.
I sure hope this was was helpful.....and not too long.
Now with all of that said, yes, getting a mortgage may prove difficult. But there are other ways to step into that home that you want without a mortgage. These may call for you or your real estate agent proposing these financing ideas to the seller, if the home is not currently marketed in this format. The following are only a couple of ways that make it possible to get into a home without a mortgage and with lower credit:
1) Search for Lease Option Homes. These are homes where the seller is leasing the residence to you in the hopes of you eventually buying the property. In this case, you pay monthly rent plus a bit more; that extra cost often gets added to the down payment amount, if you chose the purchase the home. If a seller is not offering this, you can always propose the idea. Pros: you get into a home, build credit while paying monthly, get amounts put towards a down payment, and will eventually be able to purchase the home with a mortgage if you are finding the right price for you. Cons: monthly cost is a fair amount higher than a mortgage, and if you decide not to buy or to move, you don't get any money back (unless agreed otherwise). There is definitely a lit to say about this option alone so feel free to ask questions.
2) Sone seller, typically ones who are trying to sell quickly, will allow you to assume their mortgage. In this case you move in without opening a new mortgage. You just pick up the payments in their mortgage. This is usually only viable for the seller if by selling they would not make a profit and they are better off having the property off. With this option, when you begin making payments on their mortgage, you can even request that the mortgage be signed over to you since you are now assuming their payments. Most sellers who are in a tight place will be happy to do this. Pros: paying a mortgage that would be cheaper than a new mortgage. Cons: takes work to find or spot these types of sellers and it's possible that a seller may not want to hand the deed over at the start. Definitely a lot more regarding this option as well!
There are plenty more options to explore. Main point is that a mortgage is going to be difficult to obtain from a lender with certain scores but it's not the end because there are many options that don't necessarily involve a mortgage that could be viable. I definitely recommend you look into alternative, creative options that might best suit you. Worst option is that you wait a year, focus strongly on building your credit, and reevaluate your credit and ability to obtain a mortgage then.
88201973 I really hope this helps!