Tammy Hayes, Realtor
Re/Max Palm Realty
All too many times have buyers gotten pre-approved and then while they shop for a home they go and apply for a car loan or a credit card to start buying things for the house and then when it comes time to lock in, their credit score is down or they dont have enough money for a higher downpayment.
Cash is king post 2009. credit card companies are showing their loyalty to good customers.
save save save and when you have enough, start shopping around because then you will have a great credit score to get a better rate which in return keeps more money in your pocket.
Pay off your credit cards. The one with highest interest first, then the next highest until none are left. (keep cards open, do NOT close them)
Buy only with cash. No green = no purchase. This alone guarantees no more debt is added.
Buy used not new. Good-will and salvation army are examples of you being able to stretch your money on things you need. NEED...not want. You need to eat, you WANT lobster. You can buy cheaper foods, used clothes, used cars, and cut down costs in many categories.
Stop paying for cable. Stop paying for internet. Stop paying for anything you do not need. Realize that the money you save today will be your savings tomorrow. When you make credit card payments add in more than the minimum. Pay them off faster that way. Drink only coffee you brew at home. Get a thermos and take it to work.
Try to find a non-profit credit counseling agency. See what other tricks they can offer you. In the end you have to remember, bad credit can come easily. Good credit takes time to achieve. You have to make very hard choices and stick with a plan to make it happen.
Once you have improved your credit you will find you have a better chance to buy a house. We have up to 7 million foreclosures to come between 2010 and 2012. It will be past 2012 before house prices stop dropping. So there is no hurry today to buy.
Next, assuming that you need some time to improve your credit, find a good Realtor who will help you find a home you like with a Lease option. A lease option will allow some of your rent and deposit to go against a down payment and gives you the right to purchase the home at a later date for a predetermined price. These can be tricky, so make sure the agent you select has experience doing them. I hope it works out well for you.