Thursday, January 26, 2017
A lesson on credit equals a step towards homeownership
A young couple came in to talk about applying for a mortgage to purchase their first home. Both confessed they didn’t know much about their credit, so our first step was a Credit History Lesson.
Even though they both had good jobs, their credit scores were too low to qualify for a home loan. One reason was the age of their credit—both had only opened lines of credit within the past two years. And the loans they did have—a car and some credit cards—carried high interest rates.
We talked about how all of this was negatively impacting their credit and then put a plan into action to start improving their scores.
We moved their auto loan and credit card balances to lower-rate loans at Dupaco—not only to save on interest, but also to help increase the revolving credit percentage they had available. They are saving more than $6,000 in interest alone just by moving their auto loan! Finally, we discussed setting up systematic savings to start putting aside money for a down payment.
They left my office happy that I’d taken the time to educate them on credit and the steps they needed to take to purchase a house in the near future.