Frequently Asked Questions

Know your credit is the first step to home purchase. You have three (3) credit scores -Equifax, Transunion, Experian. You have to credit qualify to purchase a home and the lenders have credit score requirement to obtain a loan. 620 middle score is the lowest score requirement for most loans, but for a great interest rate you will need over a 700 score. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Once your credit is ready you should seek a lender of your choice.

FICO Scores (a.k.a credit scores) are calculated based only on information in a consumer’s credit report maintained by the credit bureaus, Experian, Equifax and TransUnion which are general-purpose score models used to predict credit risk. The FICO Score uses a numerical range of 300 to 850, where higher scores indicate lower credit risk.

Online at CreditKarma.com, Experian.com, MyFico.com, Nerdwallet.com, Transunion.com, Equifax.com, CreditSesame.com, AnnualCreditReporting.com

Well, it depends on the number of derogatory items on your credit report. Each recorded event remains on person’s credit history for a certain amount of time:

Credit inquiries – two years

Delinquencies – seven years

Most public record items (like bankruptcy, foreclosure, short sale) – seven years

Unpaid tax liens – ten years

As long as any of these show up on your credit report, they’ll have an impact on your credit score. The best action to take, from this point forward, is to continue working on your credit history and let older, negative items age and expire, or seek a credit repair company.

Credit repair may not have the best reputation as financial services go, but it’s a federally protect right. … It’s important to note that credit repair is legal in all 50 states. There’s a federal law that guarantees consumers the right to dispute information in their credit report to have it corrected.

Hard inquiries (also known as “hard pulls”) generally occur when a financial institution, such as a lender or credit card issuer, checks your credit when making a lending decision. They commonly take place when you apply for a mortgage, loan or credit card, and you typically have to authorize them.

A hard inquiry could lower your scores by a few points, or it may have a negligible effect on your scores. In most cases, a single hard inquiry is unlikely to play a huge role in whether you’re approved for a new card or loan. And the damage to your credit scores usually decreases or disappears even before the inquiry drops off your credit reports for good.

Soft inquiries (also known as “soft pulls”) typically occur when a person or company checks your credit as part of a background check. This may occur, for example, when a credit card issuer checks your credit without your permission to see if you qualify for certain credit card offers. Your employer might also run a soft inquiry before hiring you.

Unlike hard inquiries, soft inquiries won’t affect your credit scores. (They may or may not be recorded in your credit reports, depending on the credit bureau.) Since soft inquiries aren’t connected to a specific application for new credit, they’re only visible to you when you view your credit reports.

The difference between a hard and soft inquiry generally boils down to whether you gave the lender permission to check your credit. If you did, it may be reported as a hard inquiry. If you didn’t, it should be reported as a soft inquiry.

Samples:

Common hard inquiries

  • Mortgage applications
  • Auto loan applications
  • Credit card applications
  • Student loan applications
  • Personal loan applications
  • Apartment rental applications

Common soft inquiries

  • Checking your credit scores, yourself on sites such as Credit Karma
  • “Pre-qualified” credit card offers
  • “Pre-qualified” insurance quotes
  • Employment verification (i.e. background check)

When you’re buying a home or car, don’t let a fear of racking up multiple hard inquiries stop you from shopping for the lowest interest rates.  FICO gives you a 30-day grace period before certain loan inquiries are reflected in your FICO® credit scores. And FICO may record multiple inquires for the same type of loan as a single inquiry as long as they’re made within a certain window. For FICO scores calculated from older versions of the scoring formula, this window is 14 days; for FICO scores calculated from the newest versions of the scoring formula, it’s 45 days.

Similarly, the VantageScore model gives you a rolling two-week window to shop for the best interest rates for certain loans. “That way, they only impact your credit score once,” the company says.

Listing brokers represent sellers and charge a fee to represent them and market the property. Marketing may include advertising expenses such as radio spots, print ads, television and internet ads. The property will also be placed in the local multiple listing service (MLS), where other agents in the area (and nationally) will be able to search and find the home for sale.

Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.

buyer’s agent will help ensure that you get the best possible results—and will make it more likely that you can achieve the outcome you are seeking. Unfortunately, some uneducated buyers think that going directly to the listing agent gives them a leg up on a purchase –Wrong! REMEMBER The listing agent works for the seller.

Buying a home doesn’t have a set time frame from start to finish of the entire process. It varies on time due to pre-qualifying to receiving your keys. The actual time frame of a purchase starts after you have an accepted offer for a home in your hands and turning into the bank to start their process on the actual loan. From that day it should be anywhere from 30 to 45 on a normal/regular home loan, but longer if problems come about in the approval stages.

2-months of pay check stubs, last 2 years of taxes with W-2s, 2 months of bank statements. If you are self employed you should have 3 years of back taxes with lost and profit sheets and 1099s.

Security should be your first concern when you move into a new house. Most people create spare copies of their keys, so the previous homeowners likely had a few extra sets that they gave to trusted neighbors, family members, friends, or even contractors. This should be the first thing you do prior to moving in.

Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.

It’s not required, but it’s a darn good idea! Final walk-throughs give buyers a chance to make sure nothing had changed since their first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract.