Home Finance Tips When Buying a House Through a Mortgage Loan

Tips When Buying a House Through a Mortgage Loan

8 min read
Tips When Buying a House Through a Mortgage Loan

It is quite reasonable for all to suffer from an economic collapse in life. If you are experiencing that right now, yet you are still thinking of purchasing a property, our advice is to give it a second thought. Just like how a missed check will harm your credit report, a foreclosure will leave a permanent mark on your credit card too. As the Fair Credit Reporting Act says, it will take your conscious effort for at least 5 to 8 years to erase the impact of it, but I am not entirely sure whether it will not leave a scar on your credit card.

Do you know that when you are facing foreclosure, you deal with the seller rather than your banker? The bank where you owe money to will take the money that you owe and give the remaining amount to you. You have to pay tax on delinquent amount even if you have only remotest chance to repay the loan. More than that, your chances of getting loans approved at a lower rate of interest are narrowed down.

Thus, know how to remove a foreclosure from your credit report so that it does not bother you when you want to purchase a home?

  1. Request for a copy of your credit report: Approach Equifax,  Experian and Transfax to give you a copy of your credit report. They can’t turn down your request as the Fair and Accurate Credit Transaction Act empowers you to obtain a copy from these credit reporting companies. Log in to AnnualCreditReport.com and get a free copy for yourself as it allows borrowers such a facility once every year.
  2.  Dispute errors in the report: Check the document thoroughly for mistakes. If any information related to foreclosure is given wrong, like the date of foreclosure or the amount, then you have the right to sue these credit rating agencies. Once you bring it to the attention of these credit bureaus, they will rectify the errors as they are liable to do so.
  3. Request the credit bureaus to erase the entry: If it has been more than seven years since you foreclosed a loan, approach these credit bureaus to rub off the information from your credit report. The FERA act allows as per section 605 to request for erasing foreclosure information after seven years. Submit a written request to these credit rating agencies.
  4. Contact your lender: You can also contact your lender who extended the credit, and request to correct errors. If they find out that you are making a valid claim, they will, sometimes, delete a particular entry.
  5. Seek assistance from Credit repair agency: First thing you have to do is to file a case with a cause. If the credit rating agency or the lending company realizes that you are registering a case without any serious purpose, they will reject your claim. On the contrary, if you hire a lawyer from one of the reputed credit repair agencies, he will appear on behalf of you. Since he knows every minute details of the legal provisions, he will be in a better position to fight for your cause.

Purchasing a home can be nerve-racking, especially when you are a first-time buyer and you are buying with the help of a mortgage. The above tips will help you to avoid common mistakes that have been made by many people when buying a house through a mortgage loan.

Must Read:  First Timers Guide: Steps to Buying a House
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