The Gustan Cho Team Helps Borrowers With Bad Credit Repair Chicago

Bad Credit Repair Chicago: Prepping For Home Purchase

Chicago, Illinois is one of the hottest markets for real estate transactions.

  • Chicago also has a large percentage of real estate parcels that are apartments and apartment complexes. 
  • All of those who rent can potentially be home buyers and many renters do not even know that they qualify for a home loan. 
  • Many renters do not realize that you can qualify for a mortgage loan with credit scores as low as 580 FICO with only a 3.5% down payment and do not have to worry about closing costs because closing costs can be paid by a sellers concession or a lenders credit. 
  • In Chicago, all property taxes are paid in arrears, which means that the seller needs to give the home buyer a property tax proration. 
  • The home buyer is due one year’s property taxes from the home seller and this property tax can be used towards the down payment. 
  • For example, say a renter with a 580 FICO credit score want to make an offer to purchase a $100,000 home through a FHA insured mortgage loan. 
  • Lets assume that the closing costs is $3,000 which includes escrows, one year homeowners insurance, title charges, recording charges, attorneys fees, and other closing cost fees. 
  • The home buyer does not need to worry about closing costs because the seller contributed towards all of the home buyers closing costs. 
  • Now, the home buyer will need to show 3.5% of the purchase price which is $3,500. 
  • The down payment needs to be verified and sourced or the down payment can be gifted by a family member. 
  • Lets say that the home buyer gets a property tax proration of $4,000. 
  • The home buyer can use the $4,000 towards the $3,500 down payment required for his or her home purchase so the on this case scenario, the home buyer will walk away with the keys to the home and receive a $500 check from the title company back at closing. 
  • On this case scenario, the home buyer walked out with no money out of pocket and got money back and is a homeowner.  Not all cases are like this example we used but cases like this happen often. 
  • Bad credit repair Chicago may be necessary for those home buyers who have very low credit, no credit, or recent late payments.  Reputable bad credit repair Chicago can help those who have credit scores under 580 FICO boost their credit scores over 580 FICO so they can qualify for a home loan. 
  • One thing about credit scores is that it fluctuates from month to month and can easily be boosted up by using some tricks of the trade.

Tips On Fixing Bad Credit Chicago

If you are intending on purchasing a home, one of the first things you need to do is contact a mortgage loan originator and have the loan officer qualify you and run your credit.  You can go over your credit report, credit history, and credit scores with the loan officer and see if credit repair or a credit boost is required.  You can get a FHA loan with bad credit but if you want a FHA loan with only a 3.5% down payment on your home purchase, you need a minimum credit score of 580 FICO.  If your credit scores are below 580 FICO, there may be a reason for the low score that you can easily boost it up.  Having no credit tradelines will yield a low credit score, having recent late payments will yield a low score, having too many inquiries will yield a low credit score, having high credit balances will yield a low credit score. You can go to Chicago fraud credit and read more about Chicago city credit repair fraud.

  1. No credit: If you have no credit, the chances are that you will have a lower credit score.  To correct this issue and have your credit scores boosted up right away is to add your name as an authorized user on a family member’s credit card and get two to three secured credit cards.  Each secured credit card can boost your credit scores by at least 20 or more points depending on how low your credit scores are.
  2. Recent late payments: One recent late payment can plummet your credit score by 50 or more FICO points.  If you just have been late on one credit payment, contact your creditor and ask if they can delete the late payment off your credit report as a one time courtesy.  Most creditors will remove a one time late payment as a courtesy to their valued customers.  If the representative does not budge on the request, ask to speak to a supervisor.  Your credit scores will eventually improve over time with a late payment but if you need to improve it faster, you should add positive credit to offset the credit score drop from the recent late payment.  This is done by getting a few secured credit cards.
  3. High credit card balances:  If you have high credit card balances or balances that is maxed out to your credit card limit, this will definitely drop your credit scores.  If you pay down your credit card balances to 5% of your credit card limit, your credit scores will skyrocket.
  4. Credit inquiries:  Do not apply for new credit unless you absolutely have to.  Each hard credit inquiry will drop your credit scores by 5 plus points.

Renters In Chicago Can Own For The Same Amount Paying Rent

There are many cases where home buyers who buy a home, their mortgage payments are either the same or lower than the amount they pay for rent.  Housing rentals in Chicago is extremely expensive and many first time home buyers who are currently renting do not realize that the amount they are paying for rent, they can actually own a home and enjoy the many benefits of home ownership such as building equity and writing off their mortgage interest.  If you need a free analysis of your housing payment and see if you qualify, please contact me us at 262-878-1965 or email us at gcho@gustancho.com.

Check out our threads on forum related to bad credit repair Chicago and Illinois.

Related> FCRA: Fair Credit Reporting Act