They had to begin saving money for the closing as well, which required additional sacrifices. To bring in more money, Kimberly began tutoring math and James began teaching adult education classes. In fact, Kimberly, who is pursuing a master’s degree in administration supervision, postponed taking classes last summer to tutor children in math so she and James could have more money available for a down payment. By the time they closed on their house, they had saved more than $8,000.
TACKLING CREDIT REPORTS
While James and Kimberly tracked their expenses, they also monitored their credit reports. “We both pulled our credit reports and looked at what debt we had and what we needed to pay off,” says James. Kimberly had run up a few credit cards in college and had a car loan for more than $21,000. James had several outstanding personal loans, including more than $20,000 in student loan debt.
Some of their smaller debt they paid off immediately. Then Kimberly scoured their credit reports for possible errors. “I wrote letters to each lender if I thought there were some errors on our credit report,” she explains. “I sent letters to Equifax and Transunion. I found a lot of errors on our credit reports, and fixing them really helped our scores go up.” Kimberly says that when they began working with Winchester, both their credit scores were in the 550 range, but when they applied for a mortgage in 2005, James had a 615 credit score and she had a score of 601. While scores of 650 to 750 result in the best interest rates, the Papillions were still able to qualify for 100% financing with Celtic Financial.
RESEARCH AND PLAN FOR YOUR GOAL
Initially, the Papillions were looking to purchase an existing home, but as they began cleaning up their credit profiles, they aske
d Winchester about the cost of newly constructed homes.
“I researched, I went online, I read magazines. I went to the library and got books on how to build my credit and how financing works,” says Kimberly.
By the summer of 2005, Winchester says, “based on what we had accomplished in helping to get their credit back on track, increasing their credit scores, and their diligence in putting aside some money to help pay closing costs and a down payment, I was positive that they could build a new home.”
The couple put down a $1,000 deposit, signed a purchase agreement with a contractor to secure their building, and selected the lot they wanted in July. Since their financing had been approved, they were only months away from stepping into their new home.
It was also in July when Kimberly, who was attending a youth conference at her church, happened to pick up the August 2005 issue of BE and read about the Own Your First Home Contest. After reading the rules, Kimberly determined that because they had actually signed a purchase agreement with an expected closing date before Jan. 1, 2006, they were qualified to enter the contest. “That night I went