One American dream is often owning a home. Treya L. Cook, an Owings Mills, Maryland-based realtor and business coach reminds us that there are numerous benefits of owning a home, such as building equity, receiving tax benefits, appreciation of the property over time, being able to pass down property to loved ones, and using equity to buy more properties to create generational wealth.
During National Homeownership Month, the challenges of first-time homebuyers who have imperfect credit because of life’s circumstances that range from high student loan debt, credit card debt, medical bills and other financial barriers should be openly discussed. Every American who wants to work to achieve homeownership should have the chance.
Treya L. Cook, along with her husband, John T. Cook, a credit repair expert and financial literacy coach, provides insight about realistically approaching homeownership through challenges.
“There is hope for anyone in any credit situation to start repairing their credit. The goal is to start,” John confirmed. “There are many who have credit challenges that wait until they need credit to then rush to fix their credit, but that’s not the way it works. Repairing credit and financial challenges takes time, but it’s worth it.”
John also said, “I would advise a client to visit AnnualFreeCreditReport.com and retrieve their free credit report. Knowing what’s on your report and how it’s impacting your scores is the first step to fixing imperfect credit.”
He further explained that the length of time it takes to repair credit varies. It depends on the severity of the negative accounts that are reported on the client’s profile.
“I have clients who have seen results in less than 30 days, and I’ve also seen clients who have seen results in six months. Each client should see some type of results within 30 days of being in our program because by law, any credit reporting agency must respond to us within 30 days.”
He added that his Premier Credit Builder clients benefit from having inaccuracies aggressively disputed using the power of the Fair Reporting Act.
John further noted that according to FICO, a poor credit score is below 580; a fair one is 580-669; a good credit score is 670-739; very good is 740-799; and excellent credit is 800 and greater.
Treya stated that the ideal credit score to buy a home is 620 and above. However, she highly recommends working to build your credit scores to put yourself in the best situation to obtain the best interest rate. She also shared that some people are simply not educated enough on the process of homeownership.
Lenders consider debt to credit ratio, payment history, and credit scores to determine a borrower’s ability to pay back the loan.
“High credit card usage and too much debt can impact your eligibility and loan terms,” Treya said.
Her clients can begin raising credit scores by paying off credit card balances and maintaining on-time payments.
“These two factors are key to seeing drastic increases in scores. As a business coach, I notice that some of my clients who are entrepreneurs have high credit card balances because they’re using their personal credit to pay for their business needs. I teach courses on building business credit. Many people don’t know that when you build business credit, you can then transfer balances from your personal credit cards onto business credit cards thus lowering your DTI [debt-to-income ratio] and increasing scores. Business credit does not report to your personal credit.”
Treya mentioned that the higher a down payment is when buying a home, the quicker a home buyer may be able to pay off the loan term.
“You can also lower interest as less principal to accrue interest over time,” she added.
Alternative credit models consider factors including rent, utility payments, and banking history. Self-employed individuals or those without pay stubs can prove their income using tax returns, bank statements, and profit and loss statements. Another alternative route to getting a loan is going to a hard money lender.
“They don’t look at credit or pay stubs. They typically consider bank statements and the home’s value, etcetera,” Treya explained.
According to Treya, the best time to buy a home is during the spring and summer months since many homeowners wait until close to the end of the school year to relocate.
“If you’re an investor or simply looking for a bargain, the best time to buy is during the fall and winter,” she added.
Visit https://treyacook.exprealty.com to learn more about Treya and https://www.premiercreditbuilders.com to find out more about John’s services.
