FAQs
Frequently Asked Questions
Why should home ownership be the centerpiece for a strategy to build intergenerational wealth?
Purchasing a home is an important step toward creating wealth for a family. It is probably the largest single investment that most families make. If the owner keeps the house long enough, the value of that home will grow. At some later date, the owner might choose to pull equity from the home to purchase another piece of property. A home equity line of credit can also be used as start-up capital for a new business venture or to consolidate debt. Renting does not offer these options and does not create intergenerational wealth.
What is the minimum credit score (FICA score) required to purchase home?
The minimum FICO score to quality for an FHA loan is 500. A minimum credit score of 580 is required for a 3.5% down payment. A minimum score of 500 is required for a 10% down payment. Scores below 580 will incur a higher interest rate, up to 10%.
What is the best way to repair or increase one’s credit score?
I Am Home Foundation works closely with a credit repair counseling service. Your prospective lender may offer assistance to you. However, there are things that the borrower can do like using charge cards conservatively. Carrying a balance of over 75% might adversely affect one’s credit score. In addition, there may be collection items on your credit report that should be removed. Work with your creditor to see if some item or items should be removed. If you are successful, your FICO score could increase.
What other steps should I take to increase my credit score?
If you are paying child support, make sure the amount on your credit report is accurate. If it is not, the recipient can draft a letter correcting the information that is with the credit bureau.
Also, always pay your bills on time! Finally, if you are late with your student loans, your credit score can be adversely affected. Seek to consolidate student loan debt. Request that the collecting agency make an adjustment for a smaller payment amount. This should lower your debt rates making it easier to make your payments on time. This should increase your FICO score.
Are there special mortgage programs for first time home buyers?
Are there special mortgage programs for first time home buyers?
How much time after a bankruptcy should one apply for a mortgage loan?
There is a two-year waiting period for an FHA loan application after you receive a Chapter 7 bankruptcy discharge. The two-year clock begins counting down on your discharge date. Use the next two years to improve your credit score, avoid later payments, save up extra cash and improve your credit profile overall.
Depending on whether you file Chapter 7 or Chapter 13, it could take two or four years to qualify for a conventional mortgage or two years for an FHA or VA loan and one or three years for a USDA loan.
Is a refinance the same as a second mortgage?
No. With refinancing, you pay off your current mortgage. In other words, you have a new first mortgage.
What is the difference between getting a second mortgage and reorganizing or refinancing your home?
A second mortgage is an additional mortgage that you place on your home, and you still maintain your first mortgage. A second mortgage is obtained to take cash out of your home. In most cases, you will receive a higher interest rate on your second mortgage.
What is a really good HUD certified home counseling organization?
Home Free – USA Marcia, Griffin, President at CEO 8401 Corporate Drive North, North Englewood, Maryland 20785. To improve your credit score, contact Welchom Solutions, Inc. Dr. Wendell Jones: 706-330-8218
What is the average time it takes to close on a mortgage loan?
The average time is approximately 30 days.