Hello my name is K.B. the Broker and today we're going to talk about credit. What does your credit score need to be for you to get a loan on your first home? Most of the time I run into people and their credit scores are about 550 or 560 and I really wanted to just talk about how much your credit score needs to be in order for you get a loan because that's the number one thing that holds buyers back when it's time to purchase your home. That's the reason why a lot of people would rather rent or try to do rent to own, the main thing I hear most of the time when I talk to people about purchasing it's almost always a problem with their credit score.
So you make good money on your job, you're making about $1200 to $1,500 every two weeks. Why are you renting? That's always my main question. At the end of this blog I'm going to tell you a story about renting and a disaster that I ran into. The average credit score needed to get a home loan is 580, in some cases your credit score can be as low as 520 and you may be able to qualify for a loan and I have the guys that can make it happen. Two of my partners own loan companies and they are both very good at what they do. They have a really good loan program where you only have to come up with one percent of what the purchase price is, what does that mean? The home you're looking to purchase is $150,000, you have to come up with $1,500 at the closing.
Glen Marino, that's one of the guys that I work with, if you will have a $200,000 loan, your closing cost would to around $2,000. That's a whole lot less than what you would pay for first months rent and security at $3,000 to $4,000 that you paid for that apartment that you live in isn't it? Well my credit score is low and I don't think I can qualify you say? Don't worry about that. The reason why I say that is because not only do I have 2 loan companies that I work with, I also have a person who is a professional credit repair specialist that has been in business for over 20 years on my team. He's guaranteeing you within three to four months you're credit score would be at least 100 to a 150 points higher than it was when you started with him. So if your credit score is a 450 my person could have you at a 650 in a short amount of time. His fee is $600 and he doesn't do payment plans when you contact me just express to me that you need his services and I will put you in direct contact with him.
So credit is not that good. Don't worry about it. I have that covered. We have a credit repair company on standby ready to work for you as well, we have someone that, this is all he does, he doesn't do credit. And then he worked at Walmart on the weekends. All he do is credit repair. He also does business credit. What does that mean? Well, business credit means. Say for instance, if you decide down the line that you want to go into a business and you want a loan, he can get you a loan for that business for like 100,000 to $150,000 and he can show you how to get business credit also. That's going to be another fee that he charges.
So let's talk about the horror story. I like to tell stories because I'm a storyteller and this is can be very educational for those who renters reading this. So I lived in a townhouse on 46th and King Drive and If you live here in Chicago, you know where that is. It was a townhouse that set right on the corner. I don't want to give an address, but it's a set of town houses right on the corner of 46th that are like four or five levels high. The home was a five bedroom four bathroom house. I stayed there for eight years after the sixth year that we were there, the landlord became a slum Lord and I'm pretty sure that plenty of you renters can relate because this has probably happened to you as well.
But after six years of living there the landlord became a slum Lord and I was paying about $2750 a month. I remember moving in and paying 2 months rent and 1 month security for a grand total of $8,250. I almost gave that person $10,000 when I first moved in and I remember telling my self well it's a great home with plenty of space so it's well worth it, I was sadly mistaken. The plan was to stay there until I was ready to purchase my main home, and me and my family would simply leave the townhome and move into our main home in the suburbs.
So here's how it all started, the heat in the house during the winter time seemed like it would always start breaking down during the winter months. It's five floors in the house, on the first floor there was an office and a little bathroom along with an attached garage. And on the second floor, that's where the living room and the dining room & the kitchen was located. On the 3rd and 4th floor is where the bedrooms and two more bathrooms were located. So basically the heat wouldn't be working on the first and the second floor and we would have to stay in our bedrooms to stay warm, the landlord would always call the cheapest heating guys that he could find and they would never get the job done correctly and we would go for weeks without heat.
Dealing with this was starting to become very, very stressful. I was trying not to be a nitpicker and trying to keep the peace but when you have children and on top of that you're paying $2750 a month your patience can wear thin very quickly. He would finally get that fixed, but it was still be other little things that he wouldn't fix like the foundation in the house was cracking and every time it would rain really bad, water would be leaking inside the guest bedroom and our bedroom, it was just a lot of problems with his house.
So the last straw was on Christmas night and the kids had already opened their gifts and my wife had made dinner and everyone was fast asleep. It was late at night and I was sitting in the living room talking on the phone with my sister and I smelled something burning. So I go into the kitchen and I'm thinking maybe my wife left the stove on or something but I quickly realized that was not the case. After looking around in the kitchen I noticed smoke coming from the back of the refrigerator and I heard a weird crackling noise. The smell was the smell of electrical wires burning and ready to ignite, so I quickly unplugged the fridge and ran up the stairs to awake my wife to let her know the problem that was in the kitchen.
My kids were upstairs asleep. It's probably about 12:00 at night, Everybody in the house is sleep and all I could think of is what if I was sleep with the rest of my family and not on the phone talking to my sister. I think it's safe to say that our home would have caught fire on Christmas Night with my children bedrooms directly above the kitchen. After I called the slumlord and told him about the refrigerator almost catching fire he shrugged it off and refused to buy another one, being cheap he felt he could just get the one that almost caught fire repaired. This guy is actually a preacher and hey, I don't want to talk about pastors but this guy was one and he really was a slumlord.
Here's the thing about slum lords, they don't want to fix anything, but guess what? Come first of the month they're there to pick up that rent money. I'm not going to fix anything, but I want my money, and if you don't happen we're going to have problems. That's a slum lord and that's how they operate. I was really upset that night because I normally go to sleep around 10:30 or 11:30 at night and it was like 12:00. I just so happened to be on the phone with my sister, the only thing that kept coming to my mind was what if I was in the bed? Sleep, what if I was asleep and the house caught on fire and I'm here, my wife & kids are here and this house is on fire.
This was 2017. My house definitely would've caught fire that night and I'm in a burning house with my kids trying to figure out how we're gonna get out this five level house and we would have probably been jumping from 3rd and 4th floor windows trying to survive.
I basically called the slumlord and told him that I was going to be moving and that I wasn't paying the rent for the next two months, I would keep those two months that I originally paid when I first moved in and I would use that money to move into my new home. And that's what I did, I'm not going to pay the rent, I'm not paying the rent. I'm going to take this money that I'm going to pay you and I'm going to move into another home. But the moral of the story is this, when I first moved into my new house and got settled in I was sitting on the couch one evening and added up all the payments I ha made over those 8 years. It went something like this, I lived there for 8 years, I paid $2750na month, $2750 X 12 = $33,000....$33,000 X 8 = $264,000. I wasted $264,000 on paying rent and I didn't have anything to show for it .
That's the reason why you should not be renting. You should really be looking to getting a mortgage. Everything was fine for six years, but then the last two years he turned into a slum lord and I had to move. I could have had a home that was paid for with the money I wasted, I could be living mortgage free, but I was one of those people probably just like you reading this blog. You're probably saying I'm just going to stay here for a few years. In those few years you get comfortable, then before you know it you've been living there for 4 or 5 years and you've wasted $150,000. So I say that to say this, STOP RENTING!!!Stop throwing your money away. Stop flushing money down the toilet.
Take a moment and add up the money you've wasted on renting on your current place of residence.....That money could have been going towards your mortgage and your home could be almost paid off by now. Don't make the mistake that I made stop renting and purchase a home, give me a call at 773 808 4321. Don't worry about your credit we have that covered, don't worry about getting a loan we have that covered as well.
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