Ep. 56 – The Advanced Hack to Raise Your Credit Score and Get Extra Cash for Your Down Payment 

 October 19, 2021

HBH 56 | Credit Score

You may be in doubt to push through your plan of buying your first home. But you just have to research and realize that the rent you’re paying is already slowing things down for you. Take action now and listen to David Sidoni and his guest, lender extraordinaire Dino Katsiametis, to learn how to balance debt and savings! This can be a HUGE help for some first-time home buyers. It’s a more advanced financial formula that helps them raise their credit scores quickly and get more money for their down payment. It’s a simple tactic taking advantage of the personal loan market to help buyers purchase now. If you realize that you are years away from doing it on your own and you’d be spending tens of thousands of dollars in rent while you try to reduce your debt and save for a down payment, this hack may be your answer.

The Advanced Hack to Raise Your Credit Score and Get Extra Cash for Your Down Payment

First Time Home Buyers Can Improve Their Credit Score By Over 100 Points And Get Cash For Closing

Warning. This episode teaches you a hack that can increase your credit score by 100 points or more in 45 days, and you get you extra money for your down payment. In the example that we are going to look at in this episode, it’s an extra $20,000. If you think that sounds like a scam, good. That means that you’re smart. Nothing in the financial world can be that simple or that easy without some trade-offs. If you’re paying high rents, the math on this trade-off might work for you. Time for an advanced finance episode of How to Buy a Home.

Many of you know me as the man with the plan for you to buy a home and to date, that plan is key. If you ask most realtors and lenders, “I want to buy a home. How do I do that?” They’re going to instantly say to you, “Let’s get you pre-approved, we’ll get your number, we’ll go out there and we’ll get you a home.” That’s it. That means that you are literally a number to them. Once again, I’d like to emphasize it for all of you out there. That is the correct way to use the term, literally.
For the love of God, stop saying you literally died, you literally could eat a horse or you literally would have sexual relations with your dessert, unless you really would. If that’s the case, no judgments here. You do you. Just don’t film it and put it on TikTok. Nobody wants to see that. I don’t know. Maybe they do. Only fans? What the hell just happened? This was supposed to be the advanced episode for people looking for high-level content and I went on that rant. I’ve just proven that in order to get this advanced level of content, we obviously have to bring somebody else in. It’s not going to be me tonight.
Let’s listen to the expert. A man who for the past four years, when he figured out how to make this work, he’s been finding in using this financial loophole to help want to be first-time homebuyers who are in debt and with low credit scores, make some enormous changes to help them be in a position to buy a home much faster than if they paid off their debt in the traditional way while raising your credit scores over a hundred points. In the example, adding an extra $20,000 for the down payment. You got to read this thing straight through and read to the end.
Doing that is not free, there is a trade-off. It’s not going to cost you any money upfront. It’s going to lower your monthly debt payments by huge amounts. For many of you, by taking on this new smart debt, this equation may benefit you in the long run for years. The other side of the coin would be that you’re still paying the balance of your debt while you’re trying to save money, while you’re still trying to pay your rent. All those things don’t jive together. The task seems impossible and the math is stacked against you. Let’s hear from the man, the myth, Mr. Dino Katsiametis, my Greek brother from another mother. As promised, he’s the lender extraordinaire. We’re very excited to have Dino back. Thank you so much for joining us.
I’m so glad to be here.
As many of you know, if you’ve read the blog, Dino’s one of my Southern California major, big-time colleagues. We’ve been working together for a long time and we’re always talking about what’s going on. We’re always trying to help strategize for these first-time homebuyers. One of the things that we’re finding is it can get pretty complicated but if you’ve read the blog and you understand doing potentially lower down payments, you realize when you make those lower down payments, one of the variables in your new equation is going to involve PMI. Dino explain to us how the difference is if you are doing PMI? What your credit score is going to do to how much you pay?
It’s a huge factor in determining how much your PMI is going to be. Credit scores work in twenty-point increments. Let’s call it 680, 700, 720, 740, 760. Every twenty points, your PMI will drop. Maybe not all banks are like this, but the good ones are and the majority that I work with are. Obviously, the higher your credit score, the cheaper your PMI. To give you an example. If you had a 680 credit score as opposed to a 760, you could see a half reduction. If the PMI was, $200 a month, I bet you it’d be $100 a month with a 760 credit score. The credit score is ultra-important. Not to mention you get a better rate on top of it.
[bctt tweet=”There are so many different varieties you need to consider when you want to purchase a home.” username=””]
We dove right in there. We went right into the advanced level. We skipped 101 and we went to credit senior year. There’s a reason for that. It is because what we’re talking about is something a little bit different. Everybody knows and understands that credit scores are important. Let’s go back to the basics. If you’re applying for a home and you’ve got a 680-credit score or even a 640-credit score, you can still get a home loan, correct?
Absolutely. There are many different varieties. It’s like a buffet when you’re getting along. The question is, are you at the cheap buffet or the expensive buffet? The expensive buffet has the better crab legs. The kind that you don’t have to break open twenty them to get a little bit of meat. What I mean by that is your credit score needs to be good. It doesn’t have to be, but it should be. The reason why it should be is because you’re going to get a much better loan.
You’re going to have way more options. It’s like being at the better buffet. We have certain techniques. It’s silly that when a lender runs your credit and they say, this is your credit score and this is how you move forward from that day on. Instead, how about taking a step back? Everything you preached is about getting prepared to buy a home. It doesn’t have to be right this second. You just need to get moving on it and get prepared. You do that by working with the right people and the right team. The unicorns are what you call them. Preparing and taking a step back can save you thousands of dollars and make the entire experience that much better.
You and I have talked about this, so I know where we’re going with this. To continue your buffet metaphor, what Dino and I’ve talked about and something that he’s been doing with some of his buyers are basically going to the cheap crab leg buffet, realizing you’re at the cheap crab leg and the $4 prime rib, which scares the heck out of me. I know they want you to gamble, but no way.
What we’ve done is Dino told me, “I know how you can go in the back door of the kitchen and talk to the chef. He is my buddy. He’ll just give you lobster for free.” It’s another trick for your credit score. Something that we talk about in episode 3 and episode 8, but this is a huge trick for your credit score. This is the big reveal. Dino, tell us about what you’ve been doing.
I’ve been doing it now for a few years. We couldn’t necessarily do it in the old days because it didn’t exist. It wasn’t is as readily available, but now there’s this entire market out there for personal loans. We got LendingClub, SoFi and all these different places. You can go online, apply for a personal loan and within minutes, you can have an answer if you qualify or not. It’s unsecured. It’s typically a little bit of a higher interest rate. It’s going to be based on your credit score. It’s called an installment loan. It’s a personal loan and an installment loan on your credit report, as opposed to revolving debt on your credit report.
For everyone out there, what’s a revolving? What would everyone normally assume as revolving debt?
There are two different kinds of debt. Revolving is your credit card debt versus installment that’s like a car loan, a student loan and a personal loan. An installment loan is going to have a definitive ending date. Maybe it’s a five-year loan. It’s going to have a fixed interest rate, usually. It’s going to have a fixed monthly payment from the first date to the end date. You know when you’re going to have your loan paid off. Revolving debt is like a credit card that is never-ending. It’s got that minimum monthly payment, but yet somehow, it’s going to cost you thousands of dollars because you let it keep going.

HBH 56 | Credit Score
Credit Score: Your credit score needs to be good to get a much better loan.

Having revolving debt will affect your credit score greatly. It’s not uncommon. I see it all the time for people to have five different credit cards with debt on them. Number one, managing five different debts is a lot of work. It’s not easy. Interest rates on revolving credit cards are usually much higher. Oftentimes they’re disguised with 0% interest for the first six months. It’s 1.99% or something. If you look closely the vast majority of them are 28%. It’s never-ending, which means you’re never going to get out of debt. Our number one goal, that secret sauce that you were talking about is to get people out of the revolving debt and into installment debt.
If you can go to mom and dad or a rich uncle and say, “I need $10,000 to pay off my credit cards.” Great, do it. If that doesn’t exist, if you’re not one of those very blessed people in life that you can go to somebody and ask for money, then you have to get a little more creative. Here’s an example. This is a real-life example of one of my clients. He had $10,000 give or take, worth of credit card debt.
He had $10,000 saved up in savings because he wanted to buy a house. It was his number one goal. I looked at it and said, “You got, $10,000 in credit card debt that’s drowning you. How about paying that off?” He was like, “No way. I want to buy a house. I don’t care.” I said, “Okay.” He had a 660-credit score because he was maxed out on all his cards and he had $10,000 in savings and he wanted to buy a house.
The 660 for the folks out there is, you’re talking about this 20-point tiers. Six sixty is about the third or fourth tier on the bottom. He needed to go 680, 700, 720 or 740. He needed to jump up a few tiers.
Don’t get me wrong. You can still get a loan.
Yes, absolutely.
Listen to what happens now, when you do this the right way. I said, “$10,000 is not enough to buy a house in Southern California as a down payment. You need more money. Do you have anybody you can go to?” He said, “No.” I said, “Here’s what I want you to do. I want you to go to any one of these online personal loan banks.”
This is a new phenomenon.
This is the new thing. It’s super easy to get. They’ve been going on ever since the 2008 crash. It came around and now, it flourishes. There’s a whole bunch of them.
For those of you whose wheels are spinning out there, this is not a credit card consolidation loan. That is totally different. A consolidation loan closes all your accounts then you lose your history. That’s a huge part of the credit. With this, you keep those cards, you keep them open. You’re going to get the loan and then pay them off.
Here’s what we did in this particular case, I told the guy, go get as much money as you can. Don’t even worry about the interest rate.
Don’t stress about the interest rate.
He had $1,200 a month in credit card payments.
In five different little cards.
[bctt tweet=”The higher your credit score, the cheaper your PMI. ” username=””]
He went and got himself a $20,000 loan. He paid off all five of those credit cards, $10,000 worth. He had $10,000 leftover that he now used as savings. Keep in mind, he had $10,000 before, now he’s got $20,000 in savings. He’s got zero credit card debt. He’s got one installment loan for $20,000, which is a lot more than what he owed before but somehow miraculously, he dropped his payment to $600. He added $10,000 to his savings account and he saved $600 a month by doing it.
I would recap it.
The story just keeps getting better.
To make sure we understand, from $1200 to $600, and now he’s got $20,000 in the bank and only $600 payment, but I want to touch on this. That payment difference is huge. For those of you guys who don’t understand. The way they break you down is how much money do you have each month. If you’re paying out $500 on a car that could be almost $100,000 less that you’re going to be able to buy in a house because you owe the car people $500. Dino and I will work with people all the time and try to figure out how do we get rid of all these monthly payments? By doing this, that person got $10,000 more and was reduced by $600. That increases their loan approval by $100,000. Now, give me the big finish.
Those are spectacular numbers. Keep in mind though, I said, “Don’t worry about your interest rate,” which sounds not right for me to say, but our goal wasn’t to reduce this payment. Our goal was to pay off all the revolving debt and get his credit score up and add to his savings account. We added $10,000 to his savings accounts. He now has $20,000 ready to go for a down payment. In less than 45 days, by paying off those five revolving credit card debts, his credit score shot up to 740.
Is it the same amount of debt?
It’s more by $10,000.
It is looked at so much more favorably when you’re in an installment versus revolving that it shoots your score up 100 points.
This is what’s interesting when you have five different credit cards that are maxed out, even if you’ve never been late, your credit score is going to take a major hit because it looks like you can’t manage your credit. If you have five credit cards that are totally paid off and you have one installment note or loan, then it looks like you’re managing credit just fine even though you owe more money. It’s the weirdest thing but that’s how it goes.
That’s the algorithm. Now, you have now large available credit because you gave yourself ten times available credit. As you said, that installment is looked at so much different because it has an end date.
He said, “I did everything you said. My score is better.” I rerun it on my end and confirmed it’s better. I said, “Listen, you’re ready to go. You can buy a house, but you can do better. Here’s the last step to the whole thing. Even though you’ve only had this for a month and a half, I want you to go back. I want you to go and reapply for another personal loan, but I want you to go to one of the better places.”
HBH 56 | Credit Score
Credit Score: Everything you preach is about getting prepared to buy a home. It doesn’t have to be right this second. You just need to get moving on it and get prepared. You do that by working with the right people, right team, and unicorns.

He went to his credit union, but he did it with a 740-credit score. They gave him $30,000. Another $10,000 more but instead of that 28% interest rate that he had on the first one, now he’s at 8.99%. His overall monthly payment stayed around the same as the $20,000 loan but $10,000 more. He still walked away saving over $600 a month in overall debt but now he’s got $30,000 in the bank and is able to go buy a real house.
The net on this deal is he paid off $10,000 in credit card debt. Now, he has $10,000 of available credit for his score. He got $20,000 in loans. These two loans to add to whatever his base was. In this case, it was $10,000 and reduced his payment by 50%.
I’m not going to sugarcoat this part. He’s now in debt $30,000, that he wasn’t before. However, prices went up like crazy but his house is worth $150,000 more than what he paid for it. We just finished doing a refinance for him. We got all of the PMI removed, dropped his payment there even more. This gets a little tricky, but on the refinance, I can get a little more creative. We skipped a couple of payments and got a little bit of money out. He paid off most of the personal loan and put a plan in place that in six months, it was all going to be paid off.
Now, he’s actually debt-free. On the refinance, his credit score was over 760. He got the best of the best after that with no PMI. He got lucky because the value of homes skyrocketed. Even if it was a normal escalation in equity, we could’ve still done a refinance. We spoke about how every twenty points, the PMI gets a little bit better. Every 5% equity, the PMI also gets a lot better. He shot up and we got rid of the PMI, but let’s say it went up by 5%. Your PMI is going to drop in half again. The better credit score will get your PMI to drop in half, another 5% in equity a year later, we’ll get the PMI to drop in half again.
Even if the interest rates don’t change very much, if they stay around the same, we can do a refinance to lower the PMI and hopefully lower your interest rate. Even if your interest rate doesn’t get lowered, the fact that your PMI drops in half again saves you money. This is interesting because I don’t know how many people know this. It also resets your cost basis of the PMI. Meaning, if you bought a house at let’s just say, $500,000 and then a year later, it appraises for $550,000 and you still have PMI, it’s okay.
As soon as you buy down the loan enough, you make enough payments, the principal balance is paid down, the PMI will eventually fall off. If you work off of your original purchase price and you put 5% down, for example, you have to pay off 15%. Let’s say down the road, you refinance and appraise for more money. Now, you have 10% equity. You still have to pay it down, but you only have to pay it down by 10% now not 15%. Your PMI will fall off even faster because you’ve reset your cost basis.
We’re not sugarcoating anything, but the whole thing that I’ve tried to preach on the podcast to everybody is to let you know. If you have a rich uncle or you’re in a position to be able to save 20% in a year, then you can avoid these options or you don’t have to use these options. For most people, someone like your example, who has got $10,000 in debt and $10,000 in the bank, which let’s call that 30% of what he needed. He took on the big debt at the end of it but how many years of rent payments would that have been to try to not only save another $20,000 but reduce $10,000 in revolving debt?
Something just popped into my mind when you’re saying all that. We’re going to always have different people that vary a little bit as to what the right thing to do is. How conservative are you? I can tell you that DR, who is extremely conservative, would absolutely tell you to use that $10,000 to pay off all your debt and wait another ten years and save up 20% to put it down on your house before you spend any money on a house. It’s like, “In the meantime, you spent how many thousands on rent.” By the way, that same house is now worth $700,000. It’s gone up to $200,000.
[bctt tweet=”You’re going to have way more options when buying a home. It’s like being at a better buffet. ” username=””]
Somewhere in this laptop is an entire podcast where I’m going to take Mr. Ramsey on in a positive way because he’s wonderful. I’ve talked to the guys from How to Money, their podcast. I talked to him about it because he’s a twenty-percenter, too. I love the idea of getting out of debt. I also love the idea of not paying these skyrocketing rents.
If you do the math and you look at the algorithm, sometimes it’s worse for you to continue. It’s a vicious cycle. You’re paying rent and you’re paying higher rent. You’re trying to reduce the balance of all your debt. If you could just get into this appreciating asset, then you’re going to put yourself in a better position. I’m going to wrap this up without Dino.
We went through a lot of heavy-duty stuff, but the deal is your credit score can be the difference between you getting into a house or you trying to sit back and wait it out and think that there’s no one out there to help you. This is something I want you to read and reread over and over again. Dino, I’m in awe of the things that you bring to the table.
I’m going to put you on the spot here. Any other advice for our first-time homebuyers, for folks that are out there that are renting and thinking, “I only want to sign one more lease.” What’s the best advice you can give someone if they’re twelve months out because the balance between debt and savings is always such a weird cycle?
The best thing I could possibly tell you is to seek proper counsel. Don’t think you know everything and don’t think you got it all under control. I’ll be the first to say that you could get a lot of bad counsel from people that are out there. All your research that you do should be enough to get you educated, but then you spend more time trying to figure out who you’re going to use and who’s going to be on your team. Whoever’s on your team will set you up properly and we’ll take care of you properly. We’ll be working in your best interest. Not theirs.
It’s episode 53. Have you read Madison’s story yet? She talked about the unicorn bubble.
I did.
That’s the whole thing. She was the one who said that she went to DR’s mortgage people and then she came running back to her unicorn bubble. If you’re in Southern California, great. Give Dino and me a call. The point of this show is this type of creativity and relationship first, there are people out there. It’s not everybody, but you’re talking even twelve months ahead of time. You’re saying you want someone who’s going to be the proper counsel.
The proper counsel because you can start now and you can set milestones and you can achieve them by making all the right moves. It’s not about a dash to the end at the very end. It’s not about having to run a full marathon. There’s something in between. You can shorten up that marathon in half if you’re talking to the right people that can show you how to get there. An example is this guy that I was talking about when we had $10,000, he was a year away. Instead, in three months, he bought a house. That’s what proper counsel can do for you.
Lastly, I’m going to throw this out. I’ve spent a lot of time talking and recruiting loan officers and talking to various real estate agents. I work with so many different people in this industry. I can tell you a couple of things and it’s tough. I struggle with this one because the majority of real estate agents will do two deals a year if they’re lucky. They’re always hoping their relatives will have more babies just because they need more business. That’s how they get their business from relatives.
They are forced to move into something bigger.
HBH 56 | Credit Score
Credit Score: You just let it keep going. Having revolving debt will affect your credit score greatly. And it’s not uncommon.

They don’t understand all of the details and that’s scary to me because if you can’t even trust that person to go out and negotiate the best car deal for you, why would you trust them to negotiate a home loan or a home. Several hundreds of thousands of dollars to realtors. I’m going to switch it over to lenders, which is what I do for a living. The majority of them don’t even understand the process themselves. To convey it properly to the clients and to make the process easy for them is a struggle for them because they don’t even understand it themselves.
The majority of them don’t do very many deals. The moral of the story is if somebody needs the money more than you, they’re probably going to be self-serving in their advice as opposed to serving you. I say serving because to me, that’s what it’s like. It’s serving people. Even if they’re not my clients, if I get a chance and I can serve them, I want to. It’s gratifying and I know I’m helping somebody.
That’s the big thing. For those of you out there reading in the other 49 states and to the things they call states up there in Canada, all you people, every place else in North America, Dino doesn’t make a dollar if you go to your mortgage broker and your lending team and throw them this proposition. He’s doing it because he’s part of the How to Buy a Home family. He understands that the more that we help educate you people, the more that we’re going to have you out there starting the revolution and us changing and getting you to be educated and get the absolute best for yourself.
He’s right on it. There are wonderful people that can give you all kinds of time and there’s a reason they have all kinds of time because they don’t have any other clients. They’re brand new and they’re reading the same Google article that you did. Make sure that you’ve got experienced people and you’ve got to get creative when you’re twelve months out. I talk about it all the time. It’s like driving from LA to Nashville. You can do it without a map and you’ll still get there if you just follow the signs that say, “East,” but by having a pro to talk to you twelve months ahead of time, you’d be amazed.
We’ve got readers who came to us and said, “I didn’t even think I could do it. I heard your podcast and I thought, ‘Maybe I can do it in a couple of years.’” Two months later, they’re closed. It’s because of understanding these kinds of creative things, but I’m going to let you go back and reread all that. Improve your credit score quickly. This is an incredible, powerful tool that you can use. Dino, thanks so much. I’ll see you in the next one.
Thanks, buddy. I appreciate it. Good luck everybody.

That was some serious stuff. We are getting way into financial wizardry to make these things happen. I’m going to say it again though, “Warning. This might not be for everyone.” In this example, this client figured out how to buy a house, but he accumulated an extra $20,000 in debt from when he started to be able to make this happen. If you’re out there and you’re a little skeptical and you’re thinking, “This guy says it’s a hack. That’s no hack. It’s robbing Peter to pay Paul.”
You’re right. It is. Maybe, in this case, the guy who robs from Peter so he could pay Paul figured out that when he compared the rent that he was going to have to pay for 5, 7 or 10 years, they decided that the debt acquired is actually less in the long run than paying rent and throwing it away for a large amount of time.
[bctt tweet=”Preparing and taking a step back can save you thousands of dollars and make the entire experience that much better.  ” username=””]
This gives you the opportunity to put money into a historically appreciating asset. As long as you’re aware of the current market levels and the potential forecast projections, then you don’t have to worry about Peter and Paul coming in and breaking your kneecaps. Here are a few of the basics to understand if you’re trying to put together everything that Dino said. First of all, credit works in twenty-point tiers, twenty-point increments, as low as 580 to buy a house. You’re not going to get the greatest rate in the world, but you can do it and all the way up to 760.
Those of you out there with 800 credit scores freaking out, remember, anything above 760 is gravy when it comes to your home loan requirements. If that’s A-plus, you can’t get any higher. This hack, what it’s going to do is anywhere between 580 and 760, you’re going to be able to jump several of those twenty-point tears saving you money on each jump. Next, a little basic you need to understand is everything when it comes to your loan approval is based on monthly payments.
All of your outstanding debt is looked at how much you have to pay on it each month, not the grand total. It’s hugely important, especially for those of you guys freaking out about student loans. If you make $10,000 a month, the bank likes all your monthly payments to your debt to be around $3,300. That’s for the best rate. For some loans like those low down payment FHA loans, you can go up to 42% or 43%. That’s $4,200, $4,300. You might not get the best rate, but you still aren’t going to be someone who qualifies for a home. Add them all up, your monthly payments, not those total amounts owed.
I told you guys to reread this, but I’ll try to give you the Cliff Notes version. Dino calls this hack the secret sauce. Getting out a revolving debt and into installment debt. Somebody out there, if you’re blessed or lucky or both, perhaps the bank of mom and dad or the bank of the rich uncle or your crazy grandma, they’re going to help you out and that option is always better.
I had an awesome reader. I wish I could remember his name, but he sent me this graph. It was a chart that he made for his parents with multicolored graphs, showing them how the investment of him buying a house and using the money that he borrowed from them would save tons of money in the long run versus 5, 10 years of renting.
I’ve always said that this is great to do. I call it the pre-inheritance. “Mom and Dad, instead of giving that money to me when you guys’ croak, how about giving it to me or loaning it to me now so that I don’t spend the next ten years wasting money on rent and I can build a financial foundation?” What do you think? Is it a good idea? Maybe it’ll work. Maybe it won’t.
If you’re not that lucky and you don’t have that option, here’s a great hack for you. Read closely the example on this hack. As I said, you might have to read it back a few times to comprehend it all, but all the numbers are unreal. They’re staggering. When you realize these numbers, people are trying to get their credit points up by little bits points and we’re talking a hundred points.

HBH 56 | Credit Score
Credit Score: Seek proper counsel. Don’t think you know everything and got it all under control.

It’s cool. It’s sick. It’s every other adjective you can think of. Here’s the quick review, the Cliff Notes. For your credit score, an installment loan is good, revolving credit is bad. Installment loans are loans like student loans. Did you hear that? Student loans may not be the death of all Millennials trying to buy a home like everyone says it is. Also, car loans and personal loans. Those are installment loans.
If you’re trying to figure out what one is, it’s pretty simple. These loans are looked at more favorably because they’ve got these three factors. A definitive ending date. You know when the loan is going to be paid off. Most of your car loans and personal loans are usually on a five-year if you are stretching it out. They have a fixed rate usually and they have a fixed monthly payment. Revolving debt is bad for credit. These are credit cards, never-ending payments and changed monthly, depending on what you owe. If you pay the minimum off, all you’re doing is keeping debt forever and keeping the credit card guys in their houses in the Bahamas. You are not reducing if you’re paying the minimum.
Finally, the creditors, the gods and the goddesses of the almighty FICO. They look unfavorably on these revolving debts because they can be used in abused at your leisure. Anytime you want to rack them up a rack them down, you can do that. The last thing on these guys is they always tend to have those higher rates. Even the zero teasers eventually are going to jump up to 22%, 23%, 28%.
The hat came about due to the increase in the personal loans available over the last 3 or 4 years. That was the trick. These are all the good kind. They’re installment loans, personal loans, student loans and car loans. Now that they’re out there, we’ve got our guy. Dino didn’t mention him, so I’m going to call him Steve. He was $10,000 in debt on revolving credit cards. He pays $1,200 a month on the credit cards and is not reducing the debt because he’s probably paying close to minimums.
Steve has $10,000 saved and a 640 credit score. He wants to buy a house. He pays off all the credit cards. Now, he has zero money saved. His credit score only goes up a little bit and now he has to save $30,000 to match the money that he gets if he follows the hack. Also, while trying to save for years, that 30,000, he still pays rent that does literally, once again, used correctly, nothing for him. Not correctly. He got a roof. That’s all. Steve calls Dino and he gets a personal loan. That’s an installment loan. The good kind. Steve gets a loan for $20,000 at a high rate.
The crazy thing is Steve’s payment dropped 50% from $1,200 to $600. Steve’s got a $20,000 loan. He takes $10,000, pays off the credit card debt and now he puts $10,000 in the bank. Now he’s sitting there with $10,000 added to the $10,000 he already had. In less than 45 days, Steve’s credit score went from 640 to 740. It’s 100 points and now Steve has $20,000 in the bank. Skeptics, I hear you. Yes, he still has $20,000 in debt, but his payment is half.
Now, let’s get to the next thing. Forty-five days later, the credit score is up 100 points. Steve can go get a better pitch and loan. Go to someplace that’s going to give you a favorable rate. Someplace like a credit union, which can pay off or which will allow him to get another loan, even a bigger loan, because he’s got that dope new credit score, 100 points higher. Steve looks great on paper. Not to mention the fact that Steve has shown that, “I’ve got this loan for $20,000, which I’m paying on time. I’ve got these $10,000 in debt.” He’s showing that he’s responsible with his credit. Steve gets a $30,000 loan to pay off the $20,000.
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That new $30,000 loan is at 8.99%. Steve still has the same $600 a month payment. He’s paid off the $20,000 and added another $10,000 to his savings account. That’s the total of $30,000 in the bank and a $30,000 loan and the payment of $600 instead of $1,200. You’ve taken on a debt, but now you have the opportunity to buy an asset and not pay into nothing, which is also known as your rent. Dino mentioned Dave Ramsey and how he says not to do this. A lot of other people say not to do this, but it’s up to you and if you can handle it. I’ll be taking Dave Ramsey on next.
The big finish for this one was to seek proper counsel. Dino said three things. He said, “Seek proper counsel. Don’t think you know everything. Don’t think you have it all under control.” That metaphor he gave talking about it’s, it’s not a dash. You would be shocked at how many people come to us. They get to the end of their lease and about ten months in, they go, “I’m ready to buy a house,” and then they got to rush.
It’s not a dash for you to do everything at the end, but also, it’s not a marathon where you have to change your life and change your diet and start running 20 miles a day so you can figure out how to run a marathon. You don’t have to do a cycle budget. It’s somewhere in between. It’s somewhere between doing it last minute and going psycho and not having any fun for the next three years of your life. You can expedite your timeframe by having the proper counsel that’s going to give you the steps to turn your marathon into one of those Margarita 5K fun walks for charity.
That was definitely a deep fun episode. I will once again, say, “Warning. This is not for everyone. Seek proper counsel before you do this.” For those of you out there who are always saying, “I’m sick of the basic, Sidoni. Give me something I can really work with.” How about this? A hundred points and $20,000 in the bank.
Do you think you want to buy a house? If you can take on that extra debt, this could be the way you do it. Taking on that extra debt, a lot of times is going to be way less than paying rent forever. If you want some local help, you guys know what to do. David Sidoni on Instagram, on Facebook at How to Buy a Home. HowToBuyAHome.com is where you can always find me.
I’ve got unicorns coming out of my ears. People are calling me all the time trying to hook up with a unicorn. I’ve hooked up five people with unicorns who reached out to me and got two new unicorns on the map. If you want someone local, reach out to me. DM me on Instagram. Thank you so much for listening. I’m excited for you to be able to get the basics here and then get some of this crazy deep stuff that can help make you make this happen because prices are going through the roof. Rents are skyrocketing. This is not your mom and dad’s first-time buyer, first-time house. Everything’s different and you need a hack and a trick. Most importantly, a good unicorn guide. Until next time. You can do this.

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This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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You Might Also Be Interested In:

Ep. 234 – Interview With Yadi and Victor – Dreamed Of Homeownership And Found A Way
Ep. 230 – NAR Lawsuit – The New Rules For Real Estate And How To Buy A Home – PART 1
Ep 229 – What Is A Unicorn Real Estate Team?
Ep 228 – Interview With Andrew And Melissa Who Did NOT Need 20% Down To Buy And Bought Their First Home In A Matter Of Weeks!