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There's a lot that goes into getting a mortgage. Join Jeremy as he interviews Ryan Langley, VP Branch Manager of Ruoff Mortgage in Bloomington, IN, on just how to get there.    Freebie: Get your money right video series Level up: New Home Buyer’s Guide comprehensive ecourse Contributors to this episode include: Host - Jeremy Goodrich  Copy Editing - Talia Chakraborty If you enjoyed this episode, stick around: SUBSCRIBE on Apple Podcasts.  REVIEW the show and SHARE with friends. JOIN the New Home Buyers Guide course to own the home buying process and the home of your dreams. With a 100% money back guarantee, you’ve got nothing to lose and a sweet house to gain. Thanks for listening!  More great stories & information at: YouTube - Podcast - Pinterest Course - Shine Insurance Full Transcript: Jeremy Goodrich: I'll introduce you again and then I'll pick the one I like better. Ryan Langley: Okay. No problem. Jeremy: We'll see how this intro goes. All right. Hey this is Jeremy from Shine Insurance and today I've got a special guest on our channel and his name is Ryan Langley. Ryan is the vice president branch manager of Ruoff Mortgage here in Bloomington, Indiana. He's a mortgage lander, and he has tons of information for us about exactly how to go about getting a mortgage and the processes you should think about. Now, in this video we're not going to talk about kinda the back end of very ends of the process. We're going to talk about maybe the most important part of the mortgage getting process. I don't even know if that's an actual phrase, but we're going to talk about the five steps you need to take before even considering buying a house. So Ryan, thank you so much for being with us today. Ryan: Thanks for having me. Jeremy: Okay. I'm really excited, I've decided I want to buy a house. I'm going to go out, I'm going to get a realtor, I'm going to start looking at houses right away. Is that what I should do? Ryan: No. Jeremy: And so why not? Ryan: Yeah. Getting the realtor is definitely part of the process. Jeremy: Mm-hmm (affirmative). Ryan: You're going to want to kinda keep that part of mind up front. But there's several steps that you should take prior to going out and rushing out and making an offer on a home. For starters, most realtors are going to want to make sure that you've got your ducks in a row and have taken some steps to make sure that you're ready to buy a house before they can even start showing you the home. Jeremy: What do you mean by ready to buy a house? What do I need to be to be ready to buy a house? Ryan: Sure, sure. The first thing that I will always advise anybody that comes into office that's just thinking about it, just at the very early stages, is to take care of those things that you know might be an issue in your credit report. Jeremy: Mm-hmm (affirmative). Ryan: You know that you've got some late pays, or you routinely pay late on the credit cards, due loans, auto loans, you name it, on the type of debts that you may have out there. Make sure you get your house in order regarding your current debt obligations. That doesn't mean pay them off necessarily, but that definitely means make sure that you're current on every single payment and that you have been current on them. If you're habitually late on your payments each month, that's often times viewed as a negative on your credit report and your credit score will reflect that. Jeremy: Mm-hmm (affirmative). Ryan: That would be one of the very first things that you should think about if you're thinking about purchasing a home, is making sure that everything's up to date and you're paying things on time. Jeremy: So figuring out your credit score is really that number one? Ryan: Mm-hmm (affirmative). Jeremy: Being up to date on payments is one way of addressing your credit score. When you see people trying to fix their credit scores, are there some more important things than others? Ryan: Number one thing is, on all debt is make sure that you're current. One of the worst things that you can do is to get late and stay late on it. Jeremy: Mm-hmm (affirmative). Ryan: If it's a... One or two here and there that are over 30 days. Most credit bureaus don't report until you're over 30 days late on a payment. Jeremy: Mm-hmm (affirmative). Ryan: You've got some leeway time in there most often. But you really want to make sure that everything is paid on time. Now paid off necessarily, 'cause some debt's a good thing. But you want to make sure that everything's current. Jeremy: Having your credit in order, and the best way you can do that is by keeping everything current, keeping your debts paid. Not necessarily paid up completely, like paid down. Ryan: Mm-hmm (affirmative). Jeremy: But your debt's up to date. Okay. What's the next thing we should do to get our house in order before buying a house? Ryan: Next thing you should consider is taking a look at your finances and getting a good idea of what you feel you may be able to afford. Jeremy: Mm-hmm (affirmative). Ryan: That may not be necessarily what the lender will tell you later on, but it's always helpful for a lender if we got a general sense of the price range that you're looking in. Jeremy: Mm-hmm (affirmative). Ryan: For a first time home buyers, it obviously depends on your current income situation. Jeremy: Mm-hmm (affirmative). Ryan: It depends on if you're single. Depends on if you've got multiple incomes in a household. There's a lot of factors that you would take into consideration yourself and there's all kinds of calculators out there online that you can log on and see to get a general sense of what a payment may look like and what they may look for. And a very good starting spot would be what are you paying in rent each month. Jeremy: Mm-hmm (affirmative). Ryan: Are you struggling to make that payment as it is right now? Or, are you making it easily and you can afford some more payment? A very good starting spot would be to kinda look at where you're at on your rent payments, versus what you might be able to afford on a monthly basis on a mortgage. Jeremy: Okay, cool. If I wanted to look up one of those calculators, what might I choose for my Google search? Ryan: You can go to ruoff.com. Jeremy: Okay. Ryan: We've got calculators on our website that you can use, and that's typically where I would direct you to go and find a good calculator to use. You can also use any numerous websites, bankrate.com. There's a lot of other ones out there- Jeremy: Okay. Ryan: That would be sufficient. Jeremy: Mortgage calculator. Ryan: You can type in "mortgage calculator", and you'll get a 100 different options on finding it. Jeremy: Okay. Ryan: They're all going to be accurate. You put in, for the most part, most first time home buyers are going to be looking for a 30 year fix mortgage, so you type in "mortgage calculator", use the rate that they've got in there just for an example, that doesn't mean that's what rates are currently, but that does give you a general sense of where you would be on a monthly payment. Jeremy: Okay. I'm going to get my credit in order, I'm gonna look at what I might be able to do as far as a payment goes using my rent as a great example of a place to start. Ryan: Mm-hmm (affirmative). Jeremy: Then ruoff.com mortgage calculator would be another wonderful place to kinda figure that out. Okay, that's the first two. What's the next thing I should do? Ryan: Next thing you should do, before reaching out to a lender, which will be step four, but before we get to step four, step three is to start thinking about the preliminary documentation. Yes, it does take a lot of paperwork, or what can feel like a lot of paperwork at times... Jeremy: Mm-hmm (affirmative). Ryan: To get a mortgage, to obtain a mortgage. Jeremy: Mm-hmm (affirmative). Ryan: The base amount of documentation that almost every single mortgage lender will ask you for would be a driver's licence or a passport, your last two years federal tax returns, last two years W2s. If you receive W2s, your most recent pay stub, and your last two months complete bank statements that may show any assets that you have available for down payment. That would be the core group of items that you would need to get. Of course, it will always depend on your situation, depends on if you're self employed, depends on if you've got additional businesses that are attached to that. Those things can change, but that would a very good list of things that you should think about, just getting upfront before even calling the mortgage loan officer. Jeremy: Cool. If you didn't write that down, we put it down in the notes right below this video. You can look at the list of things that you should have ready before you even call a mortgage lender. Okay, so that was step three, get your documentation in order. Ryan: Mm-hmm (affirmative). Jeremy: Step four, you've kind of already alluded to, let's go for it. Ryan: Step four, that's when you're calling the mortgage lender and you set an appointment. Often times, as a first time home buyer, it would be helpful to meet face to face, but anymore in this day of age where we can access anything online, the vast majority of mortgage lenders are going to have that option for you to go out and apply for a mortgage online. Jeremy: Mm-hmm (affirmative). Ryan: Though, anytime a first time home buyer, if you're looking... The mortgage lending process has become so complex and there's so many regulations and so many documents out there, any time that you can get face to face with a lender I would suggest that you do so. Jeremy: Mm-hmm (affirmative). Ryan: So that they can help thoroughly explain the cost and the fees and everything that's associated with the process. More often than not, the mortgage pre-approval process should take anywhere from an hour to an hour and a half. Jeremy: Mm-hmm (affirmative). Ryan: It shouldn't take much more time than that. Jeremy: Mm-hmm (affirmative). Ryan: If it does, you can go back to our previous video and hear what I have to say about the communication piece. Jeremy: Mm-hmm (affirmative), and that is the- Ryan: It all comes back to communication. Jeremy: Yeah, and that video is the three different things to think about when you're choosing a mortgage lender, and you can see that on the Shine Insurance YouTube channel as well. Step four, going ahead and contacting the mortgage broker and getting pre-approved for a loan. Okay, what's step five? Ryan: Well, step five, what I did have is you want to save some down payment. Well, that may not necessarily be true for everybody's scenario. Jeremy: Mm-hmm (affirmative). Ryan: We do have loan programs where you can have zero percent down, loan programs where it only takes three percent or three and a half, and that money may be coming from a relative in the form of a gift. Jeremy: Mm-hmm (affirmative). Ryan: That's definitely something we can add to our list if you're considering receiving a gift there's different loan programs that we will accept it and different loan programs that will not. Jeremy: Receiving a gift as a down payment for a mortgage? Ryan: Sure. Certainly. Jeremy: I see. So, your dad or mom wants to pay the down payment as a gift and some tax benefit potentially happens there. Ryan: Certainly. Jeremy: Some companies will let that happen and some won't. Ryan: Well, most companies will, but it does depend on the mortgage product itself. It depends on whether or not it's FAG or conventional loan, USDA, or a home ready product where it allows for a three percent down. Jeremy: Mm-hmm (affirmative). Ryan: There's a lot of programs that have different rules and regulations, which you really want to make sure that the mortgage lender that you're working with is knowledgeable and understands those rules, and which products can be used... Either that you use a down payment as a gift form and which ones you can not. Jeremy: Right, okay. Ryan: But I would say the fifth and final thing that we should discuss leading up to the mortgage is get a general sense of who you're going to want to work with as a realtor, if you're going to be shopping for homes. Jeremy: Mm-hmm (affirmative). Ryan: And also get a general sense in your home owners insurance, which is a very important piece that's always, or often times, not always, but often times overlooked in the beginning stages of the process is you want to kinda have a general idea of who you may want to work. I would always, always encourage you to use a local insurance company versus going online, just like I would always encourage you to use a local lender verus going online to find a lender. Jeremy: For the same reasons, because the advice is better, the contact is better, the communication is better and then that's true for I think both sides. Okay, so step five was... Ryan: Step five would be to get a general sense of who you're going to use for as a real estate agent and who you would be using for your home owner's insurance. Jeremy: Okay. All right, cool. Well, that sounds really good. All those things, and I think what's so great about talking about this right now is both you and I see, as we see people purchasing homes, that they don't do a lot of this stuff ahead of time. Then it becomes a disappointing scenario. Instead, I really think buying a house should be fun. Ryan: Yeah. Jeremy: But it can very quickly turn into a lot of work, tragedy, disappointment, things of that nature. I think the five steps you've talked to us about today will help folks to avoid that. Ryan: Absolutely. Jeremy: Okay. If folks want to come and find you for a mortgage, how can they do that Ryan? Ryan: The best way to contact me would be to call, phone number here in Bloomington, which is 812-650-3800, and also be found online at www.ruoff.com. That's R-U-O-F-F.com Or send an email directly to Ryan.langley@ruoff.com. Jeremy: All right. Well, thank you so much for taking some time out of your schedule today to help us understand mortgages a little bit better. Ryan: Thank you for having me.

You know credit scores are crucial for any major purchases. But do you know how your score's made? It's from all the little spending moments in your life. For real, every single one, from the good things you do (like paying your bills on time), to the mistakes you made (whoops, you forgot one), to maybe even some errors that are bringing you down. To find out what's going on with your credit report, we'll walk you through how to access it for free from each of the credit bureaus. From there you'll learn what to do if you find any mistakes in your report, and how to fix things that are right but not so great for you. All of this will help you when the day comes for you to purchase your dream home. Listen to learn how to fix yours now. Freebie: Get your money right video series Level up: New Home Buyer’s Guide comprehensive ecourse Contributors to this episode include: Host - Jeremy Goodrich  Copy Editing - Talia Chakraborty If you enjoyed this episode, stick around: SUBSCRIBE on Apple Podcasts.  REVIEW the show and SHARE with friends. JOIN the New Home Buyers Guide course to own the home buying process and the home of your dreams. With a 100% money back guarantee, you’ve got nothing to lose and a sweet house to gain. Thanks for listening!  More great stories & information at: YouTube - Blog - Podcast Insta - Pinterest - Course Full Transcript: McKenzie Goodrich: This is the New Home Buyer's Guide Podcast brought to you by the New Home Buyer's Guide, a comprehensive online course that lays out the nine steps to finding and buying your dream home. Get it now at NewHomeBuyersGuide.net. Jeremy Goodrich: Hey, new home buyers, Jeremy here. This is episode seven of the New Home Buyer's Guide Podcast. Where hopefully we are changing you from confused to excited, from wondering what the heck this whole home buying process is about to owning the process and owning the home of your dreams that's the right investment for you, and the right home for you to spend some time in. Maybe it's five years, maybe it's 30 years, maybe your grandkids show up at this house and talk about all the stories over the course of the last 60 years. Who knows, but we're going to make a smart investment right now. Episode seven is the second episode in our credit series, understand your credit. So, episode six we really dug into how to find your credit, and I talked about a way, kind of a workaround, to go out and find your credit score for free, and get at least two of the three different credit scores that are out there, your Experian, Equifax, and TransUnion scores, which make up kind of the trifecta of your credit score scenario. And to go out and get at least two of those in a free way. Now, you can go out and get your credit score in a way that costs money, but this was a free way so you could get a sense of your credit score. Then, I dug into exactly what that meant. And really, if you have 740 or higher, you're going to get the best loans, with the best interest rates. If you have a below that, depending on where you're at, you can have different types of scenarios, and I really broke that out. So, this episode is about how to address your credit if it is problematic. If you have less than a 740 score, then we can really dig into your credit score, and figure out if there are ways to fix it. So, let's do it, let's dig in right now, and let's make your credit score better. All right, here we go. Okay, before we get too deep, I wanted to let you know that there is an infographic for this episode as well. On episode six we had an infographic to walk you through how to find your credit, and if you go to the show notes at newhomebuyersguide.net/episode7, you will find an infographic there as well, this time for how to fix your credit. So, everything we talk about in this episode is laid out in a step-by-step way. So I might go and get that right now and then listen to the rest of this episode, so it all makes sense. So, what we need to do first is we need to get our credit report. Not our credit score, our credit report. Your credit score gives you a number that's easy for you to understand, and know where you stand when it comes to credit. Your credit report breaks down all the details of why your credit score is the way it is. All your credit cards, all your loans, your auto loan, your mortgage, all that kind of stuff, the details of what you have when it comes to your financial situation is going to be a part of your credit report. What we're going to do right now is we're going to go to a federal site called AnnualCreditReport.com and we're going to get our credit report. Now, you can only do this once every 12 months for free. I'm going to go to AnnualCreditReport.com, and it is authorized by the federal government. It's required by law that they let you once per year get an annual credit report. So again, this is a podcast, I'm not going to show you how to go on the site, but if you go to AnnualCreditReport.com, you're going to walk through a process, you're going to enter your information, you're going to take the steps that they ask you to take. Then, when you're finished, you will get a file that is your credit report. That file will look crazy. It'll have all the details, all the information, like I already said about your mortgages, your auto loans, your credit card loans, all those details. So go ahead and go through that process right now. Go ahead and pause this episode, and go through the process, do everything you need to do until you have that annual credit report up on the screen. When you've got it done, start this episode again and we'll go from there. All right, so you got your credit report, and you're looking at it, and it's like, "Oh my gosh, these people know so much about me." It's probably 20 years of mortgages, and auto loans, and credit cards, and even credit cards you closed are probably on there, and information, old names if you changed your name, all kinds of information on that credit report. Tons of things about you. It's a little scary how much they know about you. But you have it there, and now you can go to analyzing your credit report and trying to figure out how we can increase your credit, how we can fix it. Let's talk about that. Step one, step two on this infographic, but really the first step in fixing your credit is disputing errors. This is the single quickest way to fix your credit. There are three credit reports that you should have in front of you. One is from Equifax, the other from Experian, and the third from TransUnion. Each of those are the three different reporting agency, and that information comes together to create really your ultimate credit score that will affect your mortgage or your pre-approval for a mortgage. If you go through either any of those, and you see issues, you see things that are on there that shouldn't be in there, maybe someone else used your identity, that's a common problem with people's credit score, an issue that comes up on credit reports. Maybe there's something that you never really had. Maybe there's something on your report that was actually an old boyfriend, or girlfriend, or something like that. If there's anything wrong with your credit, then we're going to fix that, we're going to go through the process of fixing that right now. It's not exactly easy, but it's definitely worth it. So if you have the infographic right in front of you, you can just click on the click here to learn how in the second section. If you don't have that in front of you, then you can go to www.consumer, C-O-N-S-U-M-E-R, .ftc, Frank, Tom, Charlie, .gov. That is www.consumer.ftc.gov, and it's going to take you to the Federal Trade Commission site, that is how to dispute errors on your credit report. It's pretty old school how you're going to have to go about this. Essentially, you're going to have to create a letter. You're going to send a letter to one of the three credit reporting agencies depending on which one has the problem. If all three of them have a problem, then you're going to wan to send the same letter to all three credit reporting agencies. If you want to just call them and kind of get information about where you send this, there's a phone number you can totally do that at. But basically, if you want to do this, you're going to need to come to this page, and then you're going to click the our sample dispute letter, then I would just copy this information into a Word document or whatever. You're going to dear sir, or madame, blah, blah, blah. Then you're going to explain the item that is in your credit that is incorrect. You're going to describe that in the letter. And if there are any things that you've enclosed, documentation, payment records, court documents that support your position, you definitely want to put those in there. You want to do everything you can to convince them that this is incorrect and it should be removed from your credit. Then you're going to ask them to please delete or correct the dispute item as soon as possible. And you're going to send them out to them. Or send these letters out to them. Now, it takes a little while to get the letters to these places, but hopefully when they get this, they'll see that there are inaccuracies in your credit score, and they will fix those. When they fix them, those inaccuracies will not be affecting your credit anymore, and can very quickly increase your credit score. So that was step two in the process is to dispute errors. Step three is, you know, these next steps are pretty straightforward. This is just getting your financial situation right. So, if you see red flags in your credit report, maybe these are credit cards that you have bills due and haven't made payments, or maybe you didn't even realize that they were behind and they are. Maybe you've not been current on the monthly payments on your auto loan, or your mortgage, or something like that. So you're going to see what is behind, and you need to get that current, however you can, you need to get those bills current, and then stay current. So that may mean setting up reminders, or automatic withdrawal for all your monthly bills. If you get current and stay current for six months, and even a year, you're going to see your credit score increase dramatically. So that's number three, is get those bills current if they are behind, and you can see that in your credit report. Finally, if you can reduce your debt to income. I know, easier said than done. I realize that. But it will increase your credit score substantially. It doesn't mean you have to close credit cards. In fact, many financial advisors would say you don't want to close credit cards. Part of your credit score is how much open credit you have, and then how much debt you're carrying in that. So if you have $10,000 of open credit cards, maybe one is a $2,000 credit card, the other is a $5,000 credit card, another is $3,000 credit card. And that you're not maxing those cards out, then your credit score can really be based on the difference between how much open credit you have and how much debt you're carrying on that. So if you have $10,000 of open credit, but you're only carrying $1,000 of debt inside of that $10,000 of open credit, then that's a good thing. It shows a ratio of only 10% of what you have available used. So having open credit is okay, but carrying a balance in those credit cards is what can really hurt you. So if you can pay off some of the debt on those credit cards, I would not suggest closing the credit card, but paying it off is totally cool, and a great thing to do. Then, if you can increase your income, obviously, that is changing jobs, or something like that, finding a second job, having more income that you can show as a part of your credit report is going to raise your credit score. So three things you can do to fix your credit after you've gotten your annual credit report from all three reporters, TransUnion, Experian and Equifax, is to dispute any errors simply by sending a letter to the reporter that has the error in it. If all three of them have an error in it, then you want to send that letter to all three. Get your bills current, if you have anything behind you want to get those bills current and keep them current for a period of time, six months is the minimum, a year is even better. You'll see your credit score increase dramatically. Finally, reduce your debt to income. That could include lowering your debt amount by paying down your carried balance on your credit card, or it could include increasing your income, getting a second job, or a higher paying job so that the ratio of carried debt to income is farther apart. All right, that was episode seven, we dug into how to fix your credit. I hope you're feel empowered, I hope you feel like you understand even if your credit is in the dumps, or just kind of not the best, I hope you understand maybe how you can fix it. Now, you have your credit report in hand, you can see the problems, maybe if you're lucky, there are actual issues, you know, that you can write in and have them just fixed and sort of magically make your credit go up. But more than likely you've got some work to do on your debt to income ratio, and you can do that. You just have to take the time, you have to budget, you have to think about what you're spending money on, and put those things together so you can get your credit back in order. Okay, so we've really kind of nailed all this stuff that has to happen beforehand. So in episode eight, I'm super pumped, because we are going to dig in with a great mortgages lender who's going to talk about the five things you need to do to get a loan, right. So this is the next step in the process. You got your credit right, you've got your down payment that you're working on, you're kind of getting the process down, but we've got to get pre-approved. We can't go looking for houses, we can't hire that realtor, even though realtors don't cost any money, as we found out in the former episode, but we can't connect with those people until we have a pre-approval letter, so important, and we'll hear about that in episode eight. Okay, now some action steps. So first, head over to Instagram and follow us @NewHomeBuyersGuide, we put lots of stuff up there, great posts, great information, just trying to kind of create a community in that space. If you want to go to the posts with the red house on the hill, that's our podcast logo, and you can share your questions, your comments, give us some love, give us some hate, whatever, do that in the comments section, we want to hear from you, we want to know what you learned, and maybe what you want to learn in the future that we didn't hit on today. Okay, one more thing, home buying is tricky. The process has clear winners and losers, you know that because I was a loser the first time I bought a home. And home buyer's remorse is real. Sometimes you just truly get it wrong. So you need to know if you've got your financial ducks in a row, and to understand the timeline that you're going to go through to anticipate the hidden costs, and all the steps along the way. How are you supposed to do that when you've never done this before? We totally get it. Well, easy, you're going to go to the NewHomeBuyersGuide.net, that is NewHomeBuyersGuide.net, and sign up for our e-course. You'll get walked through the process step by step. Think timelines, checklists, videos, expert interviews and more. It's like this podcast, but totally beefed up and ready to walk you step by step through the process. Remember, you're about to make one of the biggest purchases of your life, do yourself a favor that'll last maybe the next 30 years, and head over to NewHomeBuyersGuide.net. All right, until the next time, happy home buying.

Credit scores play such an important part in the home buying process. It determines what you prequalify for, what kinds of loans you can get, and how much house you can afford. Listen to learn how to find yours for free. Freebie: Get your money right video series Level up: New Home Buyer’s Guide comprehensive ecourse Contributors to this episode include: Host - Jeremy Goodrich  Copy Editing - Talia Chakraborty If you enjoyed this episode, stick around: SUBSCRIBE on Apple Podcasts.  REVIEW the show and SHARE with friends. JOIN the New Home Buyers Guide course to own the home buying process and the home of your dreams. With a 100% money back guarantee, you’ve got nothing to lose and a sweet house to gain. Thanks for listening!  More great stories & information at: YouTube - Blog - Podcast Insta - Pinterest - Course Full Transcript: McKenzie Goodrich: This is The New Home Buyer's Guide podcast, brought to you by The New Home Buyer's Guide, a comprehensive online course that lays out the nine steps to finding and buying your dream home. Get it now at NewHomeBuyersGuide.net.   Jeremy Goodrich: Hey there, home buyers, it's Jeremy, that guy that bought his first home with no information, nothing done right, but you are not going to be that person. You are going to be better because you're listening to this podcast. You're downloading maybe some of the checklists and different resources we've created. You're hiring the right realtors. You're finding the right lenders. You're making sure that your down payment is starting to be saved for. On this episode, we're really going to dig into the other thing you need to do before you start the process of buying a home, and that is addressing your credit score. Your credit score is one of the key players in this process. Really the first thing you need to get right before doing anything else. It's like building a house. When you build a house, you set the foundation. The thing that everything else sits on, and if you don't have the foundation right, then the rest of the house obviously is not going to be doing good things when it's sitting on top of a bad foundation. The foundation of the home buying process is your credit score. The financial score that is based on your financial behavior over the course of like, I don't know forever basically, and we'll dig into it. So, this episode deals with how to find your credit score. I want you to know that in the show notes page, and you can find the show notes page by going to NewHomeBuyersGuide.net-episode6. In the show notes page, we have an infographic that we refer to throughout this conversation, and that infographic is really going to help you find your credit score. Just to give you a little forward thought, our next episode is going to be how to fix your credit score. So, after you found your credit score, let's say it's not very good, or you have a problem. Then there are ways that you can fix your credit score, and the next episode is going to go into that. So this episode is all about how to find your credit score. The next episode is all about how to fix your credit score. When we're done, hopefully you'll know that you have an awesome credit score that's going to make the whole rest of the process that much more smooth, and if you don't, it's totally okay. You'll know how to address it and how to fix it, so that can make the process even better. All right. Let's do it. (music) Credit is a key factor in the home buying process, really the first factor. So whether you're just thinking about buying a home, and you may not even want to make any moves for the next year or so, this is still something that's incredibly important for you right now, to understand your consumer credit. That credit score that you get based on your financial behavior in the world and how it can affect your borrowing process, the mortgage process, and ultimately getting the home of your dreams. And it all really starts right here with figuring out what your credit is. I laid out a couple of infographics. As I mentioned, you can get that infographic at NewHomeBuyersGuide.net/episode6, and it really just shows you two different steps you're going to need to do. The first one is to get your score. The second one is to understand what that score means. Now, you can go out on the web and get your credit score in all sorts of different ways, but here's the important thing to understand. Your credit score is based on an annual credit report. We'll get into the credit report a little bit more when we talk about fixing your credit score, but it's based on an annual credit report that uses money you borrow, if you're behind on any payments, any of that kind of stuff. It creates a score for you, a financial score of how you handle your finances. We can go out and get that by paying money from the three different sources, the Equifax, Experian, and TransUnion. There's lots of places online where you can pay money or pay a subscription and they'll tell you your score updated every month even. They send you an email and just tell you what your scores are, so you can really really keep track. And if you want to do that, that's great, but it costs money, and there is a way to do this. It's not the perfect way, but there's a way to do this without paying any money at all. So, I found two sites, FreeCreditScore.com and then CreditSesame.com. Each of these draws for free one of your three scores. Free Credit Score draws from Experian, and Credit Sesame draws from TransUnion. So, you can go ahead and get those credit scores for free. Now they want you to sign up for their monthly. They're going to try and sell you stuff in there, and try and sign you up for their newsletter, and all that kind of stuff, but you can work around that. So, let's start with FreeCreditScore.com. I'm actually going to log into FreeCreditScore.com right now and I'm going to visually go through the process and describe that to you. Obviously this is a podcast, so you won't be seeing that, but if you do jump into that space and walk through it, you should see basically the same process that I'm going through. So, let's dig into it. I'm at FreeCreditScore.com and we're going to go in here and get your Experian credit report completely free. So, it's not giving you all three of your credit numbers, but it will give you one of them. You go through the process. Now I'm not going to go through it in detail, but you're going to put your name in, your last name, your email address. I would suggest un-clicking send me all this credit information. This is just trying to sign you up for special offers and things of that nature. So, un-click that. Put your current street address, all that kind of information asking why you're checking your credit, and submit and continue. After this screen, they're going to ask you your social security number. They're going to ask you some other identifying pieces of information. That's going to ultimately get you to a screen that pops up a number. It'll give you that number, the single Experian, in this case, credit score, and while it isn't perfect, it isn't all three of your credit scores which combine to make your whole credit outlook, one score is going to give you really a pretty decent sense of what your credit situation is. So, going to FreeCreditScore.com and filling out your information, getting that one Experian credit score is step one. The CreditSesame.com, again basically the same process you're going to go through here. They're going to want your email address, some of your information. You're going to create a little password. If you have check boxes to not get their newsletter, go ahead and do that. While they're trying to sell you something on the back end, they will give you a free credit score without having to buy anything at all. With Credit Sesame, it's the TransUnion credit score. So by getting both of those, you're going to have a sense of what your credit score is. What does that mean? Well, you know what you can do is look at the bottom of the infographic at NewHomeBuyersGuide.net/episode6, and I created a little layout. Again, it's very basic information, but something to get you started about exactly what your credit score means associated with getting a mortgage. Again, what's our goal here? Our goal is to get pre-approved for a mortgage that ultimately will help us to purchase a home. If we're not pre-approved for a mortgage, we cannot purchase a home, and unless you've got hundreds of thousands of dollars sitting around, you've got to get the mortgage. And to get the mortgage, your credit score is going to be involved. So, let's look at the options. We've got a 740 or above. In general, if you have a higher than a 740 credit score, you're going to get the best mortgage options at the best interest rates. If you're 740 or above, hooray. You are in good shape. You've got great credit and you're ready to get pre-approved for a mortgage. If you're 640 to 739, this isn't terrible. That's okay. A lot of people are there. What that means basically is that if you go to apply for a mortgage right now, you may not get the best rates out there. Mortgages, different kinds of mortgage products or different kinds of loans use your credit to decide whether you qualify for those loans. If you have under 740, you may not qualify for some of the best ones. But at 640 to 739, you're still going to qualify for solid standard loans with decent interest rates. Again, you'll need to talk to mortgage lenders to find out more details about that, but you should be okay. You know, at 640 to 739, if you're not in a rush, you still may want to try and fix your credit, and you certainly want to at least listen to the next episode of this podcast where we talk about how to fix your credit, because I give you some information over there that could fix your credit really quickly. If you're at 710 and you go to fix your credit and you find some things to fix and end up with 750, well that's awesome. Now you've crossed the line of 740 and you're in the best category. So, 640 to 739, not too much to worry about, but you may not get the best options. Finally, 639 or below, this is the credit place where, can you get a mortgage? Yeah, you may be able to get a mortgage and you may be able to find the right mortgage for you. It may work out perfectly. There's plenty of people with lower credit scores who still go out and find mortgages and purchase new homes. So, don't take away that it's impossible, but definitely take away from this video that your credit is something to look at, is something to analyze, is something to potentially fix, spend a little time making better, so that you end up in a better financial position when you go to get pre-approved for a loan. So, 639 or below, definitely want to see how you can potentially fix your credit maybe quickly or maybe over the course of six months to a year, and put yourself in a better financial position for when you actually do go out and get pre-approved for a mortgage. All right, so there it is. Episode six, how to find your credit score. It's a workaround, the free way. You can certainly pay to find your credit score in ways that maybe are a little bit easier, but certainly aren't free, so we showed you a free way to do that. In episode seven, we will talk about how to fix your credit. So, if you found your credit is under that 740 mark, it's definitely a good idea to check out episode seven. Now some action steps. First, head over the Instagram and follow us at New Home Buyers Guide. We put lots of stuff up there, great posts, great information. Just trying to create a community in that space. If you want to go to the posts with the red house on the hill, that's our logo, and you can share your questions, your comments, give us some love, give us some hate, whatever. Do that in the comments section. We want to hear from you. We want to know what you learned and maybe what you want to learn in the future that we didn't hit on today. One more thing, home buying is tricky. The process has clear winners and losers. You know that because I was a loser the first time I bought a home. Home buyers remorse is real. Sometimes you just truly get it wrong. So, you need to know if you've got your financial ducks in a row and to understand the timeline that you're going to go through to anticipate the hidden costs and all the steps along the way. How are you supposed to do that when you've never done this before? We totally get it. Well, easy. You're going to go to the NewHomeBuyersGuide.net. That is NewHomeBuyersGuide.net, and sign up for our e-course. You'll get walked through the process step-by-step. Think timelines, checklists, videos, expert interviews, and more. It's like this podcast, but totally beefed up and ready to walk you step-by-step through the process. Remember, you're about to make one of the biggest purchases of your life. Do yourself a favor that'll last maybe the next 30 years and head over to NewHomeBuyersGuide.net. All right. Until the next time, happy home buying. (music)