11 Steps to Buying a Phoenix Home Series-Repairing Credit

Repairing credit to buy a Phoenix home takes time…

buy a phoenix home by repairing bad credit
If you read the previous post in this 11 Steps to Buying a Phoenix Home Series regarding establishing credit we are back to the same notion of maintaining a good credit history. So it will take time.  Repairing credit is all about correcting the negative references on your report and keeping the items in good standing …in good standing!  There are many reasons one might have bad credit. For the purpose of this post and buying a Phoenix home we will address general misuse or overuse, etc. We will not touch on bankruptcy issues, short sales, or foreclosures in this post as they are different in terms of recovery.

Nowadays, you will most likely need a 620 credit score or higher to buy a Phoenix home with traditional financing

Some things to consider when you review your credit report;

  • When you look at your report there are some things you should keep in mind. If you have too many credit lines this could be hurting your score. You would need to pay off and cancel or at least cancel all but a preferred three cards. The cards that you should keep should be the ones you have had the longest. Longer histories with a creditor helps your score. Try to negotiate lower rates on the three that you keep.
  • Pay down balances on all three remaining cards to 30% or less of the credit limit (10% is better).
  • Put together a budget to pay down any outstanding/delinquent payments or satisfy any debt/judgments.  Many times these balances can be settled and negotiated for less than the full amount.

Keep in mind that to buy a Phoenix home is not a given right but a reward and responsibility

Once your credit is in check make sure you take the necessary steps to keep it that way. Set up automatic payments whenever possible. Don’t wait until the last minute to mail a payment to your creditors. Make sure you don’t overspend or have to high of limits. Report any unauthorized use of your credit. Once you implement these strategies it is just a matter of time and history until you have good credit to buy a Phoenix home.  Your preferred mortgage finance specialist can give you a ball park estimate based on your current credit scenario just how long until your credit should be good enough to qualify for the best rates available to buy a Phoenix home.

If you have questions or comments on credit issues that are stopping you from qualifying to buy a Phoenix home please post them below, we would love to hear from you!

11 Steps to Buying a Phoenix Home Series-No Credit

Buying a Phoenix home requires good credit history

Buying a Phoenix home with good credit
No credit is not good credit. No credit will stop you from buying a Phoenix home. Some people assume they have good credit just because they have not used it or damaged it yet. This is not the case. The good news is there are easy ways to establish credit. I spoke with a client that asked, “Why do I need credit cards in order to buy a home?,” as she had no debt and did not want to get a credit card. The answer is you don’t. You can always save up and pay cash for a Phoenix home which many people sometimes do, however, if you are going to require a loan to finance your purchase you may have to consider the scenario from the lenders POV. If you were going to loan money to someone you will probably want to see that they have a history or managing debt responsibly prior to doing so in order to analyze the risk, i.e. the likelihood they will pay you back.

Establish credit as early as possible prior to when you plan on buying a Phoenix home

Establishing credit takes time. Having no credit does not illustrate you a.) know how to manage it or that b.) you will not abuse it.  You may have credit card offers come in the mail or when you go to your bank. It is ideal that you open three credit lines but no more with either your bank, department store, mail offer, etc. Most will come with a low or zero APR for the first year or so and of course you want the best rate and perks.  Instead of paying cash for things like groceries, gas, medicine, etc. just set your cash aside and use your card. Then when the bill comes pay it off with the cash you stashed. If you are going to carry a small balance vs. paying it off completely each month carry no more than 10% of the credit line for an optimal credit rating although paying it off each month in full is ideal. If you only carry a small balance and only buy things you would normally have to buy regardless, then you should be fine with managing your credit. In three to six months you should be on your way to having great credit to buy a Phoenix home.

Remember these 5 things when building your credit for buying a Phoenix home or any other purpose

  1. Make your payments on time every time or it will lower your credit score
  2. Always keep your credit card balance at 30% or less of your total credit line in the event you don’t pay it off in full each month
  3. Once you have a history request a credit line increase from at least one of your cards to be at 5K or more
  4. Don’t have more than 3 credit lines at any one time
  5. Don’t buy things you don’t need on credit, just buy the things you would buy anyway

Also it is important to note that it is a good idea to keep your cards for the duration. Don’t cancel one and hop to another just because they offer you a short term introductory rate. Try to negotiate the rates with the cards you have. Overall the length that you hold each credit line open will impact your score, i.e. the longer the better. This will in turn possibly get you better home loan rate when buying a Phoenix home and possibly a quicker approval process.

Many cards offer a cash back option. This means for every dollar you spend with the card (even when you pay the balance off in full each month) you will receive typically 1% or 2% cash back. So lets say you spend $2,000/month on groceries, food, gas, medicine, clothing, etc. you would have earned $40 cash back which is $40 more than you would have made if you bought the exact same items but just paid cash for them.

This post is not intended to be in any way a form or financial and/or credit counseling and it is advised you see a professional finance/credit specialist for further insight or questions regarding your credit prior to buying a Phoenix home. We have plenty of wonderful referrals!

I hope so far you are finding this 11 Steps to Buying a Phoenix Home Series helpful and I welcome any comments you may have below as we move through the series.

Phoenix-Metro Rated in Top 5 Sunny Cities To Watch in 2011

Phoenix-Metro Real Estate Recently Rated #2 in 5 Sunniest Cities To Watch in 2011 in Investopedia–a Forbes digital publication.

Phoenix-Metro real estate in sunny Arizona
One thing is for sure and that is Phoenix-Metro real estate has some of the best real estate deals in the US from both an investors standpoint and opportunities available to owner-occupied and/or first-time home buyers.

Phoenix-Metro Real Estate Offers a High Standard of Living

On average 293 people move to Arizona everyday for business opportunities, warm climate and low-cost housing. Golf courses and a plethora of dinning, shopping and entertainment venues native to upscale locations such as Scottsdale also keep Phoenix-Metro Arizona as a great place to visit or own an affordable vacation getaway.

Phoenix-Metro Real Estate is Popular Among Snowbirds

Phoenix-Metro is a popular destination for retirees and other Midwest, Northern and East Coast relocates as well as Canadians looking to get out of the harsh winter climates either seasonally (snowbirds as we like to call them) or as year-round residents.

In a recent Investopedia article, Ryan Fuhrman, sited Phoenix as one of 5 sunny cities to watch in 2011, stating;

Given that they were among the hardest hit, they could see quicker recoveries that also build steam in the next couple of years. They share some positive characteristics, including sunny locales that retirees find popular, and all were benefiting from a general population migration to warmer climates from colder ones in the northern parts of the country.

Whether your a snowbird, year-round resident, retiree, Midwest transplant, investor or an Arizona native the Phoenix-Metro real estate housing market has a lot of low-cost housing opportunities to take advantage of now and to come in 2011.

Click here for Phoenix-Metro real estate foreclosures by city

Alamosa Estates, Chandler Homes For Sale–Featured Community

Alamosa Estates, Chandler is an upscale community in South ChandlerAlamosa Estates, Chandler Foreclosure Homes For Sale.

Alamosa Estates, Chandler is located in 85249 zip code just East of S. McQueen Road, South of Ocotillo and North of Chandler Heights. Great location close to shopping, restaurants, entertainment venues, schools and the 202 & 101 freeways for easy access to/from the Phoenix-Metro area.

Alamosa Estates, Chandler offers basement homes with upgraded lot sizes in 85249.

Basement homes in Arizona are rare compared to other parts of the US. In Arizona you only have to dig about 18 inches to place pipes when building a home whereas in other parts of the Country you have to dig about 4-5 feet to place pipes below the freezing line. Therefore, the expense to build and finish a basement in other parts of the Country where the whether is colder is not great. In Arizona, adding a basement increase the cost by $20 – $25/sq.ft. according to Scott McDonald, founder of the Wall Company which means it is less expensive to build a second level than it is to build a basement home in Arizona.

Search below all homes for sale in Alamosa Estates, Chandler.

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The Fine Art of Negotiating Your Phoenix Foreclosure Real Estate Transaction

Negotiating your Phoenix Foreclosure Real Estate Transaction is something mastered by experienced Realtors.

Phoenix foreclosure real estate transactionLike with anything, experience builds confidence and confidence builds excellence. Negotiating a Phoenix foreclosure real estate transaction is no different.  Most Realtors in today’s Phoenix real estate market have negotiated some foreclosure transactions if they have done business the last three years or so. That is not to say they are excellent at it.

Proper representation is important in a Phoenix foreclosure real estate transaction.

Proper representation is important in a a regular or short sale real estate transaction as well. This is just to point out that ‘proper’ representation in a Phoenix foreclosure real estate transaction is more times than not with a Realtor that has extensive experience in negotiating Phoenix foreclosure transactions.  The main difference in negotiating with the Seller of a bank owned foreclosure property is that there is a chain of command that must approve and/or sign documents and each bank follows their own line of protocol and time frames. This translates overall to deadlines being strict, terms being firm and stakes being high.

Keep your emotions out of your Phoenix foreclosure real estate transaction.

Don’t take it personal that the bank wants to charge per diem fees if you don’t close on time or that they don’t want to replace the out-dated fixtures.  A Phoenix foreclosure real estate transaction will state the homes are sold ‘as-is’ and there are other certain characteristics of a Phoenix foreclosure real estate transaction that are pretty much universal, such as;

  • Earnest money needs to be in the form of a cashiers check
  • Sellers will not provide Seller Property Disclosure Statements (SPDS)
  • Sellers will not provide insurance claim history (aka CLUE)
  • Home is being sold in as-is condition
  • Per diem charges will apply if Buyer does not close on time through no fault of Sellers
  • Buyer is required to re-key the home after closing
  • There is no chance or pre-possession

Keep your eye on the prize and employ an experienced foreclosure Realtor to represent you and the process will go smoothly and stress free. Click here to contact us directly or complete the short form below if you are looking for Buyer representation in the Phoenix-Metro area. Our foreclosure team services Phoenix Valley Wide and has several experienced and knowledgeable Realtors dedicated to helping you with your Phoenix foreclosure real estate transaction.