One of the best parts of working at 4 Step Credit is helping people overcome bad credit to get qualified for home loans.
You don’t often hear about people overcoming bad credit. No one wants to admit they have it!
Our client was referred to us by a friend. After a brief meeting with the 4 Step Credit Team, they went from certain disaster to homeowner in 90 days.
This story is typical. We see this happen over and over.
Our client was led to believe they could have good enough credit for a home loan with a few changes to their credit report. He and his wife both had around 600 for a credit score. The mortgage company ran their credit simulator and gave our client a plan to fix a few things.
The plan, before the 4 Step Credit membership information, was to pay down a few credit cards, purchase a home inspection, and an appraisal.
Here is the problem. Our client knew it couldn’t be that easy, so on inquiring, he was referred to 4 Step Credit.
Here is what the mortgage company missed. Our client had an open judgment against them. The judgment did not show a balance on the credit report. The judgment was unpaid but the way their computer read the report, it showed as if it was. Even though the credit scores worked out for financing; the loan would not have made it out of underwriting. You can’t close a loan with an undealt with judgment.
That means, our client would have lost their earnest money, home inspection money, and their appraisal money, and not had anything to show for it.
Our client works a job, goes to school full-time, and his wife works part-time and raises their children, despite many health problems. Also they have a van with over 350,000 miles that needs replacing.
Here is what we did. We got rid of that mortgage company. We helped our client settle his judgment. Notice we didn’t say pay it off. We had the judgment reduced to 40% of its value and a $58 monthly payment plan put in place.
We then took him to a mortgage company that could guarantee his loan application before he ever found his house. That Mortgage company then found him a grant for a down payment; 100% financing.
Their monthly housing cost went from $750 to $644. $644 includes principle, interest, taxes, homeowners insurance, mortgage insurance, and a home warranty. They live in a bigger, nicer house and saved over $100/mo just by purchasing their home.
Their credit score went from 600 to 680. The old van with 350k miles will be replaced with a newer vehicle with factory warranty still available and single digit interest on the car loan.
Our client is typical of many of the people we help. Often, the solution to a better credit score is not more money. It’s about having better information. Better information means effective decision making. No guesswork or taking bad advice from well-intended people. If you knew better, you would do better.
It is about understanding how the credit scoring software works and talking to the right person the right way.
Everyone’s credit situation is different, but everyone has to play by the same rules.
Feel free to ask us any questions you might have about your situation, or better yet, just signup for one of our memberships and let’s get started on your credit situation TODAY!