I have come across so many potential buyers... so excited about purchasing a home. They surf the internet for hours, call a Realtor, schedule an appointment to see the home, then once a call is made to the Lender... STOP! The brakes are put on immediately! Your credit card debt has put you over the top; you hear the word "Dis-qualified." Let me give you several steps you need to implement to paying off those credit cards and get your credit straight so you can be in a much better position to buy a home!
- Know what your balance(s) are on your credit cards. You need to paint a picture of what your over-all balance is. Get details such as your Annual Percentage Rate (APR) and figuring out if you are behind on any of your credit bills. Do you have any outstanding late fees? Write these down in a Journal.
- Stop the spending! I know this is easier said than done but you have to stop spending...NOW! Avoid using your credit card as much as possible. Decide which expenses are most important to pay each month such as your car payment, mortgage, etc.
- Put extra cash towards your Cards... before you click off the computer... did you know you can contact your creditor to negotiate a lower interest rate on your credit cards? Pay an extra $5 to $10 extra on your highest interest rate card. Once you have a zero balance on that card, move to the next one and do the same thing.
- FREEZE YOUR CARDS! I have actually done this myself. Put your cards in a cup of water and place them in the freezer. If you want to make a purchase, by the time the ice melts you may not have the urge to make that purchase any longer! Only use your cards in emergencies.
- Don't use a Debit Card. Carry cash with you. Many clients I speak with are hit with over-draft fees that can amount to hundreds if not thousands of dollars. Spend only what you have in your pocket.
- Enroll in Automatic Payment Programs. I love this! You will prevent missed payments and late fees!
- Track your Credit Score. In Maryland you get a FREE Credit check each year. Use it! Your FICO is your best friend when buying a home.
- Don't be afraid to get professional financial help if needed. If you cannot make the minimum payments and are consistently late with your credit card bills, seek help! Once you are back on track with your finances and think you are now ready to make that awesome home purchase... please feel free to give me a call. I look forward to working with you! http://www.MarylandHOMESTeam.com/