Home Buying, A Geek Odyssey Part 2: Building Credit
When I first immigrated to the United States from Australia in 2006, the last thing on my mind was my credit score. I was a newlywed in a strange country, and had an American husband with everything established in his name. My sole preoccupation was finding a job and acclimating to my new surrounds.
Fast forward to 2014. I discover, while researching what I would need to qualify for a home loan, that I have 0 credit. This despite my diligence in paying off our credit card (in my husband's name), canceling out the (significant) costs incurred from an international move, and my (misguided) pride in the complete absence of any plastic in my wallet. I was a very responsible, cautious adult with the best intentions...but when it came to buying a house, I had no credit history to show a lender that I could responsibly pay off debt. It was a bit of a shock to discover that by not having plastic, I'm more of a credit risk than if I'd had a few cards to sling around over the years. Since discovering this, I've also come to the realization that I'm not alone. In America, credit score is something people lose serious sleep over, and it can dramatically restrict your options when applying for a home loan.
Before becoming an Urban Nest employee, a friend recommended that I speak with David Bunker of Director's Mortgage. He had a reputation as being accommodating to the financing newbie, and 100% on-the-ball when it came to client advocacy. I won't bore you with too many accolades, but teaming up with both this particular brokerage, and this particular lender, was serendipitous in that Very Portland Way.
Agents often pledge loyalty to a 'preferred lender', and this stems from how in-sync they are during a transaction, and how well that lender serves the client - of utmost importance to a responsible Realtor who wants to do everything they can to help their buyers purchase a home. David is Urban Nest's preferred lender, and for good reason. He gets the job done, fast, and is willing to take the time to work with someone like me. I have felt from the beginning that he has our best interests in mind.
Wade and I met with David well before we were ready to make the first step - and we're lucky that we did. Everyone's home buying journey is unique, as is everyone's financial situation. We are fortunate in that we have a little money saved for a down payment, but paired with my 0 credit score, we are also restricted - and my lack of credit could even negatively impact Wade's excellent credit. David outlined the best and fastest methods for me to build credit from scratch, in ways I wouldn't have otherwise considered. Like simply asking Wade's Credit Union to add my name to his credit card history, allowing me to claim some responsibility for how dutifully we'd both paid it off over the years. He also encouraged me to overcome my reticence for plastic in my own name, detailing the safe limits, and how to best go about repayments to illustrate reliability to a bank. Small steps that make a big difference in how I'm viewed - as a prospective risk, or an asset. And as mentioned above, there is no Too Soon for this stage in your process. Sooner is often the very best time to get started building (or repairing!) credit, working the system to your benefit, and preparing yourself for the next, nerve-wracking step of applying for that loan.
Lenders like David Bunker are the Carl Weathers to your Sylvester Stallone - massaging your shoulders, coaching you with words of encouragement, advising you on how to duck and weave, and working to build you up for when you finally get in the ring.
And in this current real estate market, you could well expect a few black eyes. My advice to you? Speak with a prospective, trusted lender now, so you'll have plenty of fight in you when and where it counts.
Catt (& Wade)