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Buy a home with bad credit

5 Steps All Newlyweds Must Make as First-Time Homeowners

22 Dec , 2014  

Breaking into the real estate market can be equated to breaking into just about anything: a bank, the White House, the music industry. It’s difficult. You need to know how to “pick a lock” and get in and out swiftly, or you’ll end up stuck in a waiting game that perhaps could be more agonizing than jail time. Thankfully, though, the real estate market risk we’re talking about really has nothing to do with any criminal activity!

Rather, when you hope to own your first home — particularly as newlyweds — you have one thing to worry about, one thing that no mortgage company would ever ignore. That’s your credit. As a first-time homeowner, you better pay close attention to it.married homeowners

As a Newly Married Couple, You’re Not Alone

One would think that getting to be a first-time homeowner should be easier when buying a house together with your spouse. That’s not always the case. When applying for a mortgage, know this — the company will review the credit history of not just you, or your spouse, but both. And that can get complicated.

What if your spouse generally has bad credit? Even if your credit’s spot-on, that low number can make the difference between signing on the dotted line and having the keys to just getting the ‘no’ and sigh equivalent to that of a dentist disappointed at your numerous cavities. No one likes to hear the words “I’m sorry, but we can’t approve.” It’s almost like a slap in the face. All it takes, potentially, is one blemish on your credit report, and your ability to be a first-time homeowner’s shot down.

You can prepare, though, well before you walk out of the church as man and wife, well before you sign the marriage certificate — even well before you propose or get proposed to — with these five steps.

Step 1: Credit Reports, Credit Reports

Know what your credit score is. As a soon-to-be first-time homeowner, that’s a must. Get that credit score long before you even apply for that loan. The same will go for your soon-to-be spouse. If you can gather those scores and know where the problems are, you can fix them long before you apply for that loan.

credit reportStep 2: Whether You Like It or Not, You’ve Got to Quit Your Habits

It does sound a lot harder to do, doesn’t it? We’re always stuck in our ways. However, bear in mind this important fact: you’re about to get married. Let’s pray you’re not already at this step with the rings on the fingers. The point, though, is that you’re making a big decision. You’ve made the choice to join lives with someone else — finances, home, future, everything — without looking back. This often can result in some lifestyles changing. Without a doubt, one of the lifestyles you may have is the ability to be liberal with your spending and let the debt just pile on while you wait to pay it all back “later.” Don’t wait. Change now. Catch up on your bills. Get a system of payment going. You thought it was difficult to keep up on the credit card payments as a single bachelor/bachelorette? Try doing it married as a first-time homeowner.

Step 3: Get a Credit History

Don’t be afraid to face the possibility of blemishes on your credit report. Why? Because no credit is actually worse than ‘bad credit.’ That’s right. The next step is to simply get some credit going. You need a record to even possibly get approval for a home loan. Yes, that means obtaining a credit card and buying a few things — a candy bar, dinner at Applebee’s, or whatever. Just pay it back immediately. When you pay it back, it shows up on your credit report. bills-loans-creditThis is the stuff mortgage companies will see on your credit report. They’ll see you’re reliable. You pay on time. You’re diligent. If you have no credit history, how can they make a decision?

Step 4: If You Do Have Good Credit, Handle the Loan on Your Own

Your spouse just might have to sit out on that venture, sorry to say — but only if your spouse has crappy credit. Think about the future and let’s not let this be about ownership. The fact is this: you want approval for that home loan, you need to ensure that the credit report is as flawless as possible. If you have to be the one applying for the loan in your own name, do it.

Step 5: Lastly, Look at Some of the Alternatives You Have

It’s not the end of the world if you get a denial for a home loan, people. Your goal of getting your home as a first-time homeowner will be just a bit more difficult, a little more complicated. You do have options. Consider a sub-prime loan, a type of loan that’s a bit more expensive for you marriage lifedue to the increased risk for the lender. For instance: you might face mortgage rates of 7%, which isn’t too bad; however, because you and your spouse have bad credit, you’ll have to pay 9%. Not much of a sacrifice when you think about it, especially when you get to have your very first home.

Prepare for Your Life

This is just the start of what you have to face, and you haven’t even had the chance to worry about whether or not you can handle your spouse snoring at night or the socks left in the bathroom! Or perhaps you have experienced that — in an apartment.

The next step is undoubtedly getting to be a first-time homeowner. In order to get there, though, you have to be prepared. Prepare with these five steps. The H.O.P.E. Program can help. Visit us today! But don’t forget to hang your wedding pictures on the walls of your new house.

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