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Frequently Asked Questions

Lighthouse Community Development

1) I am interested in buying a home for the first time, what should I do?
  1. We would recommend that you first attend a home buyer’s seminar hosted by Lighthouse Community Development (LCD). It will explain a great deal about what you need to know about becoming a first time home buyer.
  2. You need to obtain a complete credit report to see if there are any issues or errors that should be corrected.
  3. You should establish a budget to determine how much you can realistically afford to pay monthly.
  4. If you have no credit issues and you know what you can afford, you should talk with a lender about what you can get approved for. Be careful that you go to a lender with a good reputation who will serve your best interests.
  5. Since this is the first time you are purchasing a home and you don’t have experience doing this, it would be good to discuss your loan with a HUD approved housing counselor (such as LCD) to make certain you received the best possible loan product. Contact LCD for an appointment at 248.920.6200.
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2) I have some collections on my credit report? How do I clear them up?
  1. First of all, make certain there are no errors on your credit report. That would include wrong balances, accounts misrepresented and someone else’s information.
  2. If there is incorrect information, file a letter of dispute with the three credit bureaus in writing briefly explaining what is wrong and why it is wrong. If the account had been paid but it is not showing that it was paid, send them proof of the payment – cancelled check or letter confirming payment. Before you contact the credit bureaus, call the creditor and make sure they have received payment and the balance is zero.
  3. To pay off unpaid collection accounts, start with the smaller non-medical accounts first. These are the ones that most often will have to be paid off. Start with the smaller ones because that will encourage you as you pay them off.
  4. Call the account holder on the credit report, not the original creditor, prior to making a payment a determine the exact amount you owe. See if they will take a settlement.
  5. Send the amount owed or the settled amount to the current account holder.
  6. Wait about two weeks and call the creditor and verify they received the payment and the balance is zero. Request they send you a letter of confirmation.
  7. Once you know the balance is zero, send a brief letter to the three credit bureaus informing them that this particular account was paid and that you want them to show that on the credit report. Also request they send you an updated copy if the report.
  8. Follow this procedure until everything is paid off.
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3) I want to improve my credit score, what do I do?
  1. Start by paying off outstanding credit issues or correcting wrong issues on your credit report.
  2. Establish several good items on your credit report. This could include: establishing a credit rebuilding savings account that is offered at several area lenders. This is reported as an installment account on your report.
  3. Open a secured credit card but only use it for $15 to $20 per month in purchases and pay it off on time every month.
  4. Pay all your bills on time.
  5. Reduce the amount of credit card debt you have outstanding. You shouldn’t have more than 40% of your credit limit in active debt.
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4) What service does LCD provide regarding home ownership and credit counseling? 1. Monthly home buyer seminars.
  • Six week financial classes that meet two hours per class.
  • One-on-one private financial management counseling.
  • Review of home purchase documents prior to closing on a home purchase.
  • Assistance in helping you develop a budget, get on track with bill payments, and credit repair.
  • Help you determine what you can afford to pay on a mortgage.
  • Help you find down payment assistance.
  • Provide you with options for mortgage products.
  • Contact LCD to make an appointment (248.920.6200).
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      5) If I am currently in foreclosure, what should I do?
      1. Identify the hardship that caused you to fall behind. Decide whether or not you have overcome this hardship. Put this information in a letter and send a copy to your mortgage servicer.
      2. Create an emergency budget by eliminating all unnecessary expenses. Making your house payments needs to become your first priority.
      3. Contact your lender. Make sure you ask to speak with someone in the loss mitigation department. Explain your situation to the respresentative and ask if there are any programs available to help you bring your mortgage current.
      4. Contact LCD at 248-920-6200 to schedule an appointment. LCD is a HUD-approved housing counseling agency.
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      6) What mortgage foreclosure prevention services does LCD provide?

      As part of its general housing counseling program, LCD counsels homeowners who are in default of their mortgage payments on the importance of budgeting and prudent money management and negotiates with their mortgage servicers for more agreeable loan terms. LCD also works with a network of local social service agencies to help provide direct emergency monetary assistance to qualified applicants. Those homeowners who are interested in this service should contact LCD at 248.920.6200 to schedule an appointment.
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