Hey you Real Estate Boys: There’s a lot going on my/our lives in the coming months.  First and most importantly we will be getting married right after we both graduate in May, from Stanislaus with our respective degrees.  We both have good jobs in this area and are looking forward to becoming old and boring and raising a family.  “She is so brilliant.”   So, being the conservative future couple we’d like to make sure we start our lives on the correct foot/feet.  And that, sirs, is our question.  How does a young couple start a life and then make sure when the time is correct they can go out and buy their first home? Please be as blunt as you feel it’s needed, we are tough. 

Jenny and Preppy

“Where do I begin, to tell a story of how great a life can be?  A sweet story that is older than the sea.  The simple truth about how life should be.  Where do I start?”   What a great life you both have to look forward to.  The Boys are so happy and honestly, proud of you both.  It shows by your question that you have learned something very valuable at Stanislaus, values and ethics.  We are proud to respond to your question.  But where do we begin?

Well Preppy, Jenny too, the most important step is paying your bills on time.  Larry, being the owner of Landlord’s Property Management in Turlock, finds many of the applicants, young and old, have trouble paying bills on time.  It amazes us to read a credit report that is many pages long that reads collections, past due or sent to collections or written off.  You’d think that these words might be preceded by a mortgage or car payments but no.  These comments are on cellphone accounts, cable TV services or from a local doctor or dentist office.   The sad part is that more often than not the total amount due is $55.00 or $75.00.  When we confront the potential tenant they often say “I don’t understand, I paid them what was owed.”  Sorry Preppy, just paying your debts won’t get you a clean credit report.  When your cell phone bill comes in read on the front page when the amount is due and pay it before that due date.  If it says due by May 2, don’t send it on the 3rd.  Send it on April 22.  Keeping your credit clean is first, biggest and most important.  Now, pay your bills on time!

Next up is for Jenny.  We have the feeling you may be the prudent one in the family and know that you and Preppy need to establish some credit.  Apply for a few credit cards with moderate credit lines that you can and of course will pay off each and every month.  Credit cards are the root of all evil but a necessary evil in today’s society.  Other ways of establishing credit have already been mentioned.  Your cell phone account is credit, cable TV, your electric and gas company are credit also.  Treat them as you would want to be treated. Pay them on time and in full every month.  Believe it or not, having no credit is worse on you than having bad credit.  Oh and one last credit is your student loans if you have them.  As I recall you’ll need to start paying them back about 6 months after graduation.  Student loans are just like your credit cards; pay them on time all the time.  You need to understand and appreciate credit, Jenny.

Back to you Preppy, or is it Oliver?  Your names jar a long lost memory.  I just can’t put my finger on it yet.  The next bit of advice from the Boys is to use your head with credit and credit cards.  It is so easy to say “Oh wow look at that” or “That is so cool.”  But we don’t have the $50.00 in our pocket.  “Oh wow Jenny, we have the credit card.”  Credit cards are not free money, Preppy.  You have to pay off the card eventually. 

You both have lived the last few years on a small budget or we at least assume you haven’t been in the money while you were both in college.  You stated you both have good jobs to look forward to after graduation day.  Begin you married life with a plan.  You and Preppy sit down and say ok, this is what we will be bringing home each month.  Our rent is “?”.  We need to eat and it costs us “?” to eat every month.  Then we have our cell phones, cable, credit card, and student loans to pay each month.  Then after everything is paid off you have something left over we hope to save.   Start saving bucks as soon as the first monthly pay checks come in.  Basically you both sit down and do a budget.  Don’t go over the amount you budget for each month.  If you got through school eating Hamburger Helper, cheap dates and going out to dinner meant a double-double at In & Out, don’t stop now.  Keep it up. 

Ok, you both have been thrifty and wise for the last few years and you have a tidy sum sitting in your savings account.  You both agree it may be time to look for your first home to purchase.  It’s time to find a local lender for you to meet with and get pre-approved for a home loan.  You want the pre-approval so you know what price range you two qualify for.  There is no good to come out of looking at homes you can’t afford, it only breeds heart ache.   You are going to find from your lender that the last few years of being prudent, love that word, has paid off in your FICO score.  Your lender is going to smile when he or she looks up to you both and say “Oh my” you two a have a good score, it’s in the high 700s .  For our readers you’ll need at the very least a FICO score from 620 to 640 get any loans to purchase a home.  The highest FICO I believe is 839.  Then, Jenny and Preppy can look at each other and say, yes, “Love is never having to say you’re sorry.”  Thanks Oliver Barrett IV and Jenny Calvalleri for your question.  We hope to hear from you again.  Maybe Oliver’s Story next time.