As we continue on the journey of becoming a ‘future matriarch’, there are certain milestones that mark your growth, your vision, and your legacy. One of the most meaningful, and maybe even proudest, of those milestones is homeownership.
This monthly series is all about making the journey to homeownership feel a little less overwhelming and a lot more doable. Now in its second installment, we encourage you to check out the first edition if you haven’t already as it lays a great foundation for what’s ahead. Each edition breaks things down into bite-sized pieces, from quick history spotlights and helpful mortgage terms to smart money tips and step-by-step guidance, so you can build confidence and move closer to owning your home. The insights and advice shared throughout come from Satchel Howard, offering guidance you can trust as you navigate the process.
So, for March we are focusing on… CREDIT & BUYING POWER
Section 1: History
Why Credit Scores became a key factor in lending and how they evolved.
Believe it or not, credit scores were not always a factor in the lending process. Decades ago, lending decisions were considered inconsistent because there wasn’t a standardized way to measure risk.
Leading us to 1989, when the commonly known FICO score was introduced to create a consistent, more objective system. This was helpful because instead of relying on potentially biased opinions, now there was actual data supporting whether or not someone would be able to repay a loan–based on debt levels, payment history, and length of credit.
Today, your credit score is one of the most important factors we weigh as mortgage lenders because it influences:
- Loan Approval
- Interest Rate
- Loan Program Eligibility
- Overall Buying Power
Credit doesn’t just affect whether you’re able to buy, it also impacts how much it costs you to borrow. Understanding this will give you leverage. Especially for us women working towards financial independence, knowing your credit profile helps you step into big financial decisions with clarity and more confidence!
Section 2: Vocab
Let’s break down the mortgage words we all pretend to know
CREDIT SCORE: Your credit score is a three digit number that measures your creditworthiness. This score is calculated with contributing factors such as payment history, amounts owed, length of credit history, what kind of credit you have, and new credit inquiries.
DEBT-TO-INCOME: Commonly referred to as DTI. This is the percentage of your monthly income that goes toward debt repayments. We lenders calculate this by dividing your total monthly debts (car payment, student loans, credit cards, etc.) by your gross monthly income.
Say you earn $6,000 per month and $2,000 of that goes toward monthly payments, your DTI is 33%.
Looking at your DTI helps us determine how much of a mortgage payment you can truly afford.
DOWN PAYMENT: A down payment is the upfront portion of the home’s cost that you pay out of pocket. Many people still believe you need 20% down, which is definitely a myth. There are several loan programs that allow for a much lower down payment, especially for first-time buyers.
Your down payment alone is capable of influencing:
- Your loan amount
- Your monthly payment
- Whether mortgage insurance is required
The key is knowing all of your options–and that is where I come in!
Section 3: A Money Tip
The power of on-time payments
If there is only one thing you take away from this month’s segment, let it be this… PAY EVERY BILL ON TIME!
Your payment history makes up the largest portion of your credit score. Even one late payment can impact your score, no matter how large or small the payment is.
Section 4: A Step toward Homeownership
Step 2: Set up automatic payments
Setting up automatic payments is a game changer when it comes to strong credit. The payment can be the minimum amount allowed, but even this ensures that you are protecting your credit! It will also reduce stress– you will no longer have to worry if you missed anything. Lastly, setting up automatic payments builds financial discipline!
Building strong credit might not feel exciting day-to-day, but it’s one of the most powerful ways to set yourself up for long-term success.
For many women, this is part of stepping into the role of a future matriarch — making intentional financial decisions, creating stability, and building a foundation that can support not just your life, but future generations as well!
Take your time with this— reflect, reach out and ask Satchel questions, or pass the knowledge along. Legacy grows when we learn together.
We’re excited to continue this conversation on the last Thursday of March!
Leave any questions you have in the comments below!
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