It’s no secret that our country has experienced an economic crisis in recent years. As a result,
there were loss of jobs and many families even lost their homes. This has left people
wondering if they could ever buy a home again. The good news is if you’ve had a life event
such as a foreclosure, short-sale, or bankruptcy, or even if you’ve never owned a home but experienced
credit issues, there is hope. It is possible to own a home. The key is getting ready for
it. With preparation, you’ll be on the path to homeownership. Designing Spaces met up
with Kelly Zitlow with Cherry Creek Mortgage to get some tips on securing a mortgage, even
if you’ve had a previous foreclosure or other financial setbacks.
So, for a lot of people, this is a sensitive subject. They think home ownership is out
of the picture because of a previous foreclosure or other financial problems. And some might
even avoid the situation altogether because they think it’s too difficult. What do you
have to say to them? First and foremost, know that it is okay.
You’re going to get through this, and it is possible to buy again. Lending is available
in this country, and there is hope. There’s a process you’re going to need to prepare
for to go through, and using a trusted mortgage lender and realtor will help navigate you
through that process. But understand, there’s going to be a lot of documentation. It doesn’t
need to be scary, and it is something you will get through.
So looking at the overall picture, what should someone do who wants to own a home but has
a history. So, understanding the process is key. Lending
is different today. There are additional hoops that you might have to jump through with regard
to the documentation requirements. So, the first place to start is to get pre-qualified.
You’re going to want to work with an experienced lender. At that point, you’re going to complete
your loan application. They’re going to pull credit and give you a big old laundry list
of documentation that you’re going to have to provide. But don’t be afraid. It really
is pretty basic stuff. So, tax returns, pay stubs, bank statements, that type of thing.
That’ll be a great starting point. What about downpayment funds? How much money
does someone need to buy a home? Is 20% required? That is a great question, Betsy, and I think
often a misconception. There are so many low downpayment programs available out there today.
So, again, consulting with that trusted mortgage advisor in your market, they will be able
to give you direction on the downpayment program, the actual loan program, what best fits your
scenario. So, if we are in a waiting period or have
credit issues, what are some of the things that we should be thinking about in order
to be prepared for the future? What are some basic steps we should take?
Now that you understand the process, you know your waiting period and what your downpayment’s
going to be, the next piece of this puzzle is truly all about credit. Many people don’t
know that when you pull your credit online, it’s actually a different scoring model than
when a mortgage lender pulls credit. They’re actually completely different scoring algorithms.
So, important to know that the score you’re looking at may not be the credit score that
the lender is using. The other thing is you want to pay down your revolving credit cards
to 20% or lower of the limit. So, if you owe $1,000, you won’t want to owe more than $200.
That will help in the credit scoring process. And if you have collections, be sure to talk
with your lender before you do anything with them. And don’t close or open any accounts
as you go through this process. Oh, and lastly, you’ll want to pay your bills on time. A late
payment of 30 days or more reported on your credit report can absolutely impact your ability
to obtain a home loan. So, paying bills on time is key.
So, when it comes time to buy a home, once you have all your ducks in a row, then what’s
next? So, next is the exciting part. You get to
start shopping for that new home. You already know your loan option, you know what you can
afford and the price point that you need to be looking in. A couple of key things is don’t
change jobs during the process and you’ll want to be sure that any large deposits that
are not payroll related deposits you’re communicating what those are about with your lender because
they’re going to want to document those. So, any final words of wisdom or of hope?
The one thing I would say is truly partner yourself or align yourself with an experienced
mortgage lender. There’s so much that goes into this process that somebody that doesn’t
have experience from a lending standpoint just is not going to know. For example, you
may think that you’re actually doing something that will help you during the process, but
that could hurt you. So, working with an experienced mortgage lender will help set you up for success.
They will navigate the process and be proactive in what’s about to come and giving you guidance
as you go through it. You know, Betsy, the dream of home ownership truly is alive in
this country, and I think people that have had a bankruptcy or a short-sale or foreclosure
or just credit issues and maybe didn’t have one of those life events, sometimes they get
down and they just don’t know that they can buy again. Know that you can. There are so
many home loan programs out there that are available. You’ll want to work with a trusted
advisor, they’ll give you direction, and know that hope does exist. We at Cherry Creek Mortgage
are committed to educating consumers and giving you the tools you need to succeed as you move
through this process. Well, thank you so much, Kelly, for sharing
your knowledge with us today, and I know there’s a lot of people that are going to be very
thankful for this. Absolutely. And thanks so much for having
me, Betsy. To learn more, visit CherryCreekMortgage.com.
To see this portion of the show again, visit DesigningSpaces.TV.
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