How to Spot a Fraudulent Credit Repair Service – Education

If you are working toward a home purchase, it’s important to get your credit into the best possible shape. Credit repair companies can help, but, you need to pick one that will do the work that you want. There are, unfortunately, many unscrupulous agencies making promises that make oversized promises or ones that charge far more than they should. Here are some warning signs to look for when looking for a company to help you fix your credit:
  • They promise they can erase a bankruptcy. No company can erase a legitimate negative issue with your credit. If you encounter a company that promises that they can make a bankruptcy go away, they are not telling you the truth. Only time and responsible credit management can remove a bankruptcy from your credit history.
  • They say they can eliminate debt. No company can erase a debt that you legitimately owe. It is legal and possible to get erroneous accounts removed and to negotiate settlements. However, there is no magic wand that will simply make legitimate debts disappear.
  • They promise a new credit identity. If someone promises you a clean, new credit identity, they are breaking the law. When a company promises this, what they give you is a number that looks like a Social Security number. However, it is in reality an Employer Identification Number that has specific legal uses. It cannot be legally substituted for a personal Social Security number, and anyone who says that it can is putting you in danger of breaking the law.
  • They tell you to lie on credit applications. This is something that can leave you with expensive fines or worse and no honest company would do that. If you encounter a company that encourages you to be dishonest when applying for a home loan, do not do business with them.
  • They fail to explain your legal rights. When dealing with credit repair agencies, you have a few specific rights under the Credit Repair Organization Act (CROA). For instance, you have the right to cancel the service within three days without being charged. You have the right to know, in detail, what services they are offering. You are entitled to know how long the process will take. Any company that refuses to supply this sort of information is in violation of federal law.
  • They try to charge you before they’ve done anything to help. The CROA also forbids charging for credit repair before services have been rendered. If a company is looking for money in advance, this is a good sign that their service is a scam.

If you encounter any of the red flags above, walk the other way. These are clear signs of an expensive and ineffective credit repair scam. When it comes time to fix your credit so that you can move forward with home ownership dreams, entrust your financial future to a company that is reliable, trustworthy and has your best interests at heart.

For more information on legitimate credit repair services click here to request a free consultation.

What is an FHA Loan? – Tips

When you start shopping for a mortgage, the number of types available can almost be overwhelming. If you have gone through a bankruptcy or foreclosure or if you don’t have a lot saved for a down payment, one option to explore is an FHA loan.

What Is an FHA Loan?

FHA loans are backed by the Federal Housing Authority. The program was established in the 1930s in response to the massive number of foreclosures that occurred during the Depression. The guaranteed loans meant that lending was less risky for banks and mortgages more accessible. Since the loans are backed by the federal government, they are less risky for lenders. These loans can be a good match for people who have recently gone through credit repair. They require lower down payments and even people who have had serious credit issues such and bankruptcies and foreclosures can be approved.

What Are the Benefits of an FHA Loan?

An FHA loan requires only a 3.5% down payment. The money for the down payment can be a gift from a friend or relative, which can be a boon to young first-time buyers. FHA loans are often available even to people who have had bankruptcies or other credit issues.

Another interesting benefit of an FHA loan is that it is an assumable loan. What that means is that, when selling a house, the next owner can simply pick up payments where the last owner left off. This can make the house more desirable to buyers if you ever choose to sell.

Are There Drawbacks to an FHA Loan?

While FHA loans have a lot of qualities that make them an attractive home purchase option, there is also one big potential drawback to this sort of loan. Because an FHA loan has more lax requirements, it comes with hefty insurance payments.

To get an FHA loan, you’ll need two types of insurance. The first is an upfront mortgage insurance premium (MIP) that is equal to 1.75% of the mortgage. This is either paid at closing or can be added to the loan amount. The second is an annual mortgage insurance premium which is paid monthly. The cost of this insurance varies depending on the term of the loan and how much you are borrowing.

Do You Qualify for FHA?

FHA borrowers have to meet a number of requirements. Some are very rigid, but others can be worked around if the lender has justification. A few key qualifiers:

  • You must be over the legal age to sign a mortgage in your state and have a valid Social Security card.
  • You must be steadily employed. For the FHA, this usually means that you have been with the same employer for two years or more or that there are no gaps in your work history.
  • To qualify for the 3.5% down payment, you need to have a credit score of 580 or better.
  • You need to be two years out of bankruptcy and three years out of foreclosure.

FHA loans make home ownership a much more attainable dream. When looking for a loan, check all your options to find the one that works best for you.

For more information on FHA loans feel free to contact our office at 617-265-7900 or feel free to request a free consultation you can click here.

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Secured Credit Cards – Resources

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One of the most important factors that drives credit score improvement is ACTIVE, POSITIVE trade-lines. When someone has a score below 680 credit card companies are not as wiling to lend as they used to be. Because of this we are constantly advising our clients to look into secured credit cards. These credit card companies are much more likely to approve someone because they are able to take a security deposit from the borrower to over look the lack of credit score. Quite a few offers can be found directly on our site under the KeyCreditCards tab. If you would like some additional information regarding our Secured Credit Cards program. Feel free to visit us online at www.keycreditrepair.com.

For additional information on how to repair your credit, please contact our office at 617-265-7900 or request a free consultation below.

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