First time home buyers benefit from Elizabeth's training with loan professionals and state and federal agencies to get you the maximum information to make the best choices when buying your first home.
There are programs available to first-time homebuyers at below-market interest rate loans that help low-to moderate-income homebuyers purchase their first home.
Programs offered through the Washington State Housing Finance Commission include:
First Mortgage Loan Programs: Home Key State Bond, House Key Teacher
Second Mortgage Loan Programs: House Key Plus,Homechoice, House Key Extra, House Key Rural
How do you get started? As a first-time homebuyer, you need to know the steps to homeowership.
1. You must first attend a FREE homebuyer Education seminar providing you with the steps to buying your first home. You will receive a certificate upon completion of the class, valid for two years. This will be a requirement of your loan process.
2. Contact a Commission-trained loan officer to see what you will qualify for. They can find the right loan type that will work with our programs. They also know the income and acquisition cost limits WSFHC require.
3. Once you know how much you qualify for, it is time to look for a home. Your lender and real estate professional will work with you to locate and finance a home of your own. (me!)
Information for Homebuyer Education Seminars, Participating Lenders and Commission-trained loan officers can be found at http://www.wshfc.org or you may call them at 800-767-HOME (4663) and ask for the Homeownership division.
Elizabeth has been trained to help you through the process of buying your first home.
Other agencies:
ACORN Housing Corp: (206) 243-4663
Community Home Ownership Center:
(800) 317-2918
HomeSight: (206) 723-4355
International District Housing Alliance:
(206) 623-0122
Articles about Credit Scores and how they work from Women of Wall Street: "Ask Jane Doe"
Dear Jane:
I'm a single woman in the market to buy my first house. Before I apply for a mortgage, I'm trying to tidy up my credit so I'm transferring my credit card debt (about $5,000) from three cards to one and closing the other two. My friend Meredith told me this was a bad move -- that my FICO score will be higher if I keep balances on the three credit cards. Can you please explain what on earth a FICO score is and if it's true that three cards are better for my credit than one?
-- Confused by Credit Scores
Dear Confused by Credit Scores:
A California company called Fair Isaac and Co. creates your credit score, hence the term "FICO." Almost all major mortgage lenders use this score to evaluate how good your credit is. Your application for a mortgage will be accepted or rejected based on your FICO score. If a lender accepts your application, your FICO score will also determine what your interest rate will be and what fees you'll pay. How your score is determined can literally be broken down into percentages. You can read the specifics at this U.S. Department of Commerce website , and here's a summary of how your FICO score is determined:
Weights and Factors used for the FICO
Score
- 35% = Your Payment History: How you've been making payments on all your credit cards and loans. Recent missed payments will have more of a negative effect on this score than ones from way back when.
- 30% = Outstanding Credit: How much credit is available to you and how much you owe -- in total. If you have a credit card with a zero balance, be sure to factor this available credit into the equation. The more available credit you have, the better it is for this part of your score.
- 15% = Length of Time: How long you have been a credit user. The longer you've been borrowing money, the better -- provided you've been paying it back.
- 10% = New Credit Loads: How recently have you needed more credit? More recent needs for credit lower this score.
- 10% = Mixed Credit Use: What percentage of your debt is credit card debt and what percentage is installment-based loans? Banks like to see diversity in the type of credit extended to you.
Your friend Meredith is correct -- leaving all three credit lines open will be better for your FICO score than having only one credit line open. Whether or not you transfer the outstanding balances to one card is up to you -- that won't affect your score -- but closing two of the cards will. The reasoning behind this is what Fair Isaac calls your "balance and burden" -- how much credit has been made available to you and how much you're currently using.
Dear Jane:
My husband and I are Indian by birth, but now we are American citizens. Our country of origin has the "untouchables" -- people from the lowest caste system who are relegated to the worst jobs. We left India to escape exactly this kind of prejudice. So imagine our surprise when we recently applied for a mortgage and discovered that we will be subject to extraordinarily high fees and rates because we are Unscoreables -- people who get a very low FICO score because they don't have any debt. This seems outrageous! We have money in the bank. We've rented an apartment for seven years and never missed a timely payment. We don't have any credit card debt. What kind of a system is it that penalizes us for good financial habits? And what can we do to change our score?
-- Upset and Unscoreable
Dear Upset and Unscoreable:
According to Congress, you are two of some 30-50 million people who fall into the category of Unscoreables, people with very low credit scores because they have what's called a thin credit file: little or no history of borrowing money and paying it back. According to a number of recent news reports, Unscoreables consist mostly of young adults, minorities and ethnic groups who avoid traditional U.S. banking systems.
Congress is looking into the matter to determine if the FICO scoring system discriminates against non-traditional credit patterns. To learn about how FICO scores are determined, read Confused by Credit Scores.
In the meantime, you want to buy a house. Since you can't beat 'em (the banking system, that is), why not consider joining 'em? And you don't necessarily have to go into debt to do this. Here's how.
You might want to consider signing up with Pay Rent, Build Credit (PRBC). PRBC is a Consumer Reporting Agency, as defined by the Fair Credit Reporting Act (FCRA), and is therefore regulated by federal and state laws to make sure that your personal information is properly protected. Using PRBC, you set up current payment accounts you already have (rent, mortgage, utilities, etc.) and add historical payment information to those accounts. The site gives you all the details.
PCRB then merges your information with what's on file at the Big Three credit bureaus -- the ones that are used to determine your FICO score. There is no fee for the service. PCRB sells your credit report (only with your consent) to banks and lenders who are deciding whether or not to lend you money.
