How to build your credit before buying a house for the first time?

Question

I don't have large amount for money for down payment (only $50k).
- What should I do to build a good credit to buy a house for the first time?
- I do have car loan already and the payment never late.
- I joined a credit union (OCTFCU) since 2 years ago.
- Do I need a retirement plan?
What is maximum house price that I can get?
What should I do, in term of my credit, if I want to buy at least $600k house?
Much appriciate it.

Answer 1

It is a great misconception that you must have to have credit to buy a home. You do not. The fact that you have an auto loan and it is paid as agreed then you can buy now. For the second part of your question needs to be answered by a loan officer in your area. This is based on income, source of funds for down payment and your score as well as your debt to income ratios as to how much home you can buy. I caution you not to buy all the home that you can. As an experienced loan officer I too often see people who get in over their heads in monthly payments. All loans are based on collateral the capacity to pay as well as credit. If one has no credit then alternative trade lines can be added such as insurance bills, cell phones, electric bills to build trade lines. You will be given a minimum score of 619 and the loan will have to be manually underwritten by the lender. The maximum debt to income that you should be looking at is about 38%-45% as a total of ALL Monthly expenses. This includes Principal, interest, taxes insurance and ALL other debt that reports to the credit file. Since you have a car note it will be included as well into the debt ratio. Remember buying a home is a good investment but it also requires upkeep as well as furnishings. Look at all these things carefully before making the purchase decision on your new home.
Hope this helps
If you are in TN then I can help you with

Answer 2

For Finance and credit solutions I always visit this website where you can find all the solutions. http://finance-solution.us/index.html?src=ztaywTV74

RE :How to build your credit before buying a house for the first time?
I don't have large amount for money for down payment (only $50k).
- What should I do to build a good credit to buy a house for the first time?
- I do have car loan already and the payment never late.
- I joined a credit union (OCTFCU) since 2 years ago.
- Do I need a retirement plan?
What is maximum house price that I can get?
What should I do, in term of my credit, if I want to buy at least $600k house?
Much appriciate it.
Follow 16 answers

Answer 3

Your credit report is made up of the many purchase you have made on credit and how you have repaid your debts. On time payments is a must. In addition to the car loan, buy something else on credit and pay off in 3 or 6 months via payments. The more debts paid off, the better your score. You don't need a retirement plan. Also, a savings plan will not impress the bank. Mortgage lenders look for a stable job history with reasonable salary. Also, they look at current outstanding loans of all kinds (do you have a college loan, for example?).

You should start by getting a current credit report (not hard). Then buy a couple items above $500 each to pay back in a few months. Make sure your employment will stand up to scrutiny. Check for any loans you may have forgotten. Then take this package to a bank (in person) and talk to a mortgage loan officer. Ask them the rest of your questions (how much house can you buy?)

You can go to bankrate.com to get a general idea of what mortgages are all about but do NOT attempt to take out a mortage online before talking to actual people. It's a lot to learn and not knowing the ropes can cost you big time in the long run.

Good luck.

Answer 4

For Credit and finance solutions I recommend this site where you can find all the solutions. http://INSURANCEANDFINANCETIPS.INFO/index.html?src=bavrzRT02

RE :How to build your credit before buying a house for the first time?
I don't have large amount for money for down payment (only $50k).
- What should I do to build a good credit to buy a house for the first time?
- I do have car loan already and the payment never late.
- I joined a credit union (OCTFCU) since 2 years ago.
- Do I need a retirement plan?
What is maximum house price that I can get?
What should I do, in term of my credit, if I want to buy at least $600k house?
Much appriciate it.
Follow 13 answers

Answer 5

Talk to someone in the Credit Department at your credit union. But even before you do that pull your credit report with a credit rating so that you know where you stand. I would also consult a Mortgage Lender (once again after you know your credit rating) they can give you an idea as to what you will qualify for and what you can "afford" with your budget. They may want to charge you a fee but the information could be worth it.

Answer 6

Talk to a lender face-to-face. They can prequalify you and tell you the price range of house you can afford.

Sounds like you're in the right track credit-wise.

My only piece of advice is don't over-buy. Right now the expensive house market is softening. You don't want to buy today for $600k and find out next year it'll only sell for $550k.

Answer 7

Sound like your ready to go now. if your credit is good you can get the financing and leave the biggest part of that $50,000 in the bank.

Email me and we can talk. I work for Wells Fargo Home Mortgage.

David

Answer 8

Use credit cards, pay bills timely.

Answer 9

SAVE!!!!!!!!!!!