I’m sure you are all well aware of the $8000 first time homebuyer tax credit and the $6500 repeat buyer tax credit. Amazingly, I’m still talking to people who are either learning about it for the first time or thought it had gone away in December! Buyers you have to have that property under contract by April 30th (which will be here sooner than you think!). Don’t let them let this unbelievable benefit get away!
Here are a few Do's and Don'ts concerning your credit while you are looking at homes and once you are under contract:
- Do Stay Current On Existing Accounts - One 30-day notice can cost you.
- Do Continue To Use Your Credit As Normal - Changing your pattern will raise a red flag and lower your credit score.
- Do Call Your Loan Officer - Call before making any credit changes or purchases that may affect your score.
- Don`t Apply For New Credit - Every time you have your credit pulled by a potential creditor or lender, you can lose points from your credit score. This includes co-signing for a loan.
- Don`t Pay Off Collections Or Charge-Offs - If you want to pay off old accounts, do it after closing. Then, request a letter of deletion from the creditor.
- Don`t Close Credit Card Accounts - If you close a credit card account, it may appear that your debt ratio has gone up. Closing a card will affect other factors in the score, including credit history.
- Don`t Max Out Credit Cards - Try to keep your credit card balances at least 30% below their limit during the loan process. If you pay down balances, do it across the board, not just one.
- Don`t Consolidate Your Debt - When you consolidate all of your debt onto one or two credit cards, it will appear that you are maxed out on that card and you will be penalized.
I want to help buyers to make good, solid, financial decisions. This is only one way that I can help guide you! Call me with questions and scenarios!