Let me give more of an insight on how I ended up with bad credit. When I went to college my father said "Don't get any credit cards!" Did I listen? Absolutely NOT! So when I graduated college in 2002 I was $10,000 in debt. Of course I didn't have a real income while in college, well actually I did, I worked summers and during the school year however I had bills living in an apartment and my credit card payments weren't my priority and at the time, I didn't understand CREDIT!
Now my first vehicle was purchased cash in 2000. I received a settlement from being hit by a car, invested in mutual funds and benefited from the boom of 1998 to 2000, I made enough money to purchase my car cash without touching my initial investment!
Nevertheless, when I graduated I had bad credit and I was UNEMPLOYED. Now I landed a job 2 months after I graduated college in 2003 and I later entered into a debt management plan to pay off my credit card debt. All but 1 of my credit cards agreed to the plan. I figured I would wait them out the 7 years it takes to fall off. My debt management plan was going to take about that long any way.
In 2001 I had wisdom teeth pulled. For some reason my parents insurance didn't cover everything so I had $488 on my credit report for that. In 2007ish I visited the dentist, insurance didn't cover the entire bill so I owed them about $150. In 2004, I broke my lease to move back home and help my mom, add a judgment from that of $1700+ dollars to my credit report.
So in 2010 I was done with my debt management plan however I hadn't paid any of the aforementioned therefore my credit score was below a 600. Nevertheless I bought a car at 0.9% financing. We're here to talk about property ownership however.
In early 2011 I decided I wanted to purchase property. I paid off all outstanding balances on my credit report with my income tax refund and began my search. I found a condo for $29K, yes only $29K however the loan amount was so small the purchase couldn't be financed. I then found a condo for about $50K, I was pre-approved through Chase for $75K however, my debt to income ration was to high for me to purchase a $50K condo. Say what?????
So in 2012, I learned about an organization called NACA. I went out to their meeting joined their membership in the quest for home ownership. Went and sat down with a rep and was told, we need you to pay your car down more and do some other things as your debt to income ratio is too high. What? My thoughts of home ownership were slowly dwindling. I needed to raise my income and/or lower my debt.
Keep in mind I have student loans from graduate school that I am paying as well at this time. So I deferred my dream of home ownership. In the meantime, my cousin told me she was paying $1,200 for rent. I told her that is too much, you can OWN a home. That sparked something in her and in 2013 she closed on her property.
Now let me back track by 2012 my credit score was 694,670, and 680 something from the 3 bureaus. So the credit was there, the debt income ratio was a problem.
Then on June 12th or 15th 2012, I was laid off from my job. Ouch! Gratefully, I continued paying my bills, paying down debt I had, deferred my student loans, and also acquired new credit cards to use when necessary.
In December 2013 I attended a Robert Kiyosaki Real Estate informational. I liked what I heard so I purchased the weekend workshop for $200. That workshop changed my life tremendously. What I learned was assets proceed liabilities. Before acquiring a liability, I need to acquire some assets. In January 2013, I watched an abundance webinar, a week later I received a call back about a resume I'd submitted. I interviewed and received the job with a start date of February 17th, 2014. All I needed was a steady income on paper to purchase my property. I'd gotten my credit TOGETHER and my MIND right, I was ready! I had been unemployed for 1.5 years. The week after I started working I contacted my mortgage broker.
This time I didn't want a condo, I wanted an investment property that would generate income to pay for my future condo. My broker was on it immediately. One day after having a challenging more my broker sent me a text. "I have a property for you to see, income after payments about $2K/month." For me, I don't know about you, money talks. I viewed a 4-unit property, put in an offer, and at this point, my credit score was almost 800, all 3 scores were in the high 700s above 775. Paying my car not on time, always paying my student loans, oh and I paid off both of my credit cards to $0 months before pulling my credit report.
Not sure what's on your credit report? Visit www.annualcreditreport.com pull one of your reports every 4 months, so that you receive 3 a year!
The amazing thing is, I was able to purchase a 4-unit property 4X the purchase price of the $50K condo and my debt to income ratio was not an issue. Why? The mortgage broker factored in income from the building and added that on to my income! Had I known they did that when purchasing property I may have been able to purchase my first building in 2012. When you know better you do better.
So on June 6, 2014 after less than 4 months on my new job and after being employed 1.5 years I closed on a 4-unit apartment building!
Now keep in mind to do this, I did have good credit and an income. However there are ways to purchase property with a credit score as low as 580. To qualify for FHA you have to have at least a 620 credit score. Also if you are self employed, you have options as well. Nevertheless, there are tons of possibilities out there, one must simply explore their options.
As I type this I still have yet to be on my job 1 year, however it will be 3 days over 1 year once this is published.
If you have any questions on REAL Estate and the home buying process, contact us. We will have a workshop coming up later on this year enlisting the expertise of Real Estate and Mortgage professionals to bring you the most current and up to date information on home ownership.
The one thing I've learned is, enlist the expertise of PROFESSIONALS. Don't assume you know what you need or what you have to do in order to accomplish something like purchasing a home.
Tune in next Friday for lessons learned purchasing a property and doing everything myself, the good, the bad and the in between!
There are 315 days left in this year, make them count!!!!!!
You may have experienced disappointment, lack, set backs, loss etc. Nevertheless, you are still here, life goes on, and you must Take Charge, OWN your Life, and be in CONTROL. ~ Epiphany Essentials Management #DreamsToRealityEmpowermentEvent Coming Soon Stay Tuned for Details!!!!!!!
by Jamesia Johnai Hawk
Namaste, Peace, Love, Joy, Abundance, Health and Vitality to ALL!
Epiphany Essentials Links
FaceBook: Epiphany Essentials https://www.facebook.com/pages/Epiphany-Essentials/157878129813
Email: johnai@epiphanyessentials.com
No comments:
Post a Comment