Archive for February, 2008

I Have No Credit – What Do I Do?

This is a tough one. Along with no credit, I find some people have a combination of the two: a little bad credit and then no credit at all. If you’re one of those, refer to the post before this about bad credit and this one.

The best thing you can do about bad credit is to pay off what’s outstanding. The best thing you can do about no credit is to go out and get some!

Most banks will give you a credit card if you can back it up with some cash. For example, deposit $1000 and they will give you a card for $1000 associated with your social security number. Use the card to build your credit. Once you have established basic credit that way, stores will give you credit cards and gas stations will as well.

Just make sure you pay your bills on time every month because interest rates on these cards can be very high and especially at this time when you’re building credit you don’t want to add to the negative side of your profile.

While it’s hard to say how long it will take to establish credit this way, it is a foolproof method to ensure that you build a strong history that gets better the longer it stays in your name and paid on time. Just be sure to then monitor your credit to ensure no one steals your identity!

I Love FHA — And So Do My Buyers

I LOVE FHA.  I’m thinking of buying FHA some flowers and candy taking FHA to the movies.  If things work out I’m leaving my wife and moving in and having FHA’s babies.

I have several buyers I’m working with now in various stages from “looking” to “in escrow” who’ve been approved for FHA loans by my lender, Linda Spafford.

imageI have to admit, I haven’t been this excited about helping people own homes in awhile, and my buyers are loving the world, too.  One of them called me the other day and left me a voicemail that said, “I just wanted to call to thank you and tell you how excited I am.” 

That’s not bad.  At the end I also get paid.  But that’s not bad!

What’s even better is what she’s thanking me for.  See if this scenario would work for you:

  • She’s buying a bank-owned home down in the same neighborhood as the home she’s renting now, and it’s comparable in size and age.
  • Her monthly mortgage payment (principle / interest / tax / insurance) is going to be less than what she’s paying now in rent.
  • She put 3% down, which she got from a relative (gift money).
  • The seller paid most of her closing costs, so she only needs to bring in about $600.00 more to close.
  • The interest rate we don’t know precisely yet because it isn’t locked, but there’s a good chance it will be under 6%.  Linda could get you a current APR estimate.
  • 30 year fixed loan.  No pick-a-foreclosure option-ARM nonsense.

Now what’s really slicker than frog hair about that is not so much that we did that once.  That might have been a fluke.   But Linda just got some other buyers I’m working with approved for the same program.  Their rent is about $700 higher, in a different neighborhood.  But I talked to them tonight and sure enough, there are some bank-owned homes in their neighborhood that are priced well enough that they too have the opportunity to buy a home in their neighborhood for about what they’re paying in rent — maybe even less!

Anyone want to guess who I have to go meet on Sunday?