More Tips on Credit Ratings

Image result for credit cards

 

While looking through some information regarding credit ratings, I thought you might find this to be interesting. Enjoy!

Bottom line- your credit report is very important when it comes to determining mortgage eligibility. The best thing to do is to learn what is on your report, determine what impact that information has on your credit rating, and work on repairing any damage or correcting any errors that may exist on your report.

There are three main credit bureaus to which most creditors (such as credit card companies, banks and leasing agencies) provide information. Each month, your credit holders report information to the credit bureaus regarding your current balance, minimum payment requirement, and payment history. It is best to make payments regularly and timely!

If you would like more information about credit reports, give me a call and we can discuss this in more detail. Please do not hesitate to contact my office if you need any further assistance at this time.

Four Keys to Buying Your First Home

Are you getting ready to buy a home? Here are four keys to being prepared to make your first offer.

 

 

1. Know what you can afford and how much cash you will need. Knowing what you qualify for before looking at any homes will save you the disappointment that can come from falling in love with a home that’s out of reach. We’ll be happy to “pre-qualify” you now so you’ll know what will work later.

 

2. Know where you want to be. Learn about the neighborhood before you make an offer to buy. Sample the commute. Talk to would be neighbors. See the schools, shops and services before you start negotiating.

 

3. Choose your property type. Consider your range of choices: single family, multi-family, townhome, condo, co-op, new construction, etc. Know the pros and cons of each. Decide which is best for you, and define your search accordingly.

 

4. Obtain a valid pre-approval before you make an offer. This entails document verification, a credit check and automated or actual underwriting. If all is in order, you will receive the equivalent of a loan commitment that’s subject to a contract, appraisal and title work. Your pre-approval gives you and the seller confidence in your ability to close the deal once you find your perfect home.

 

You will probably buy a home only a few times in your life, but we’re laser focused on the process every day. We know how important proper preparation can be to making the process easy and rewarding. Now, so do you.

 

Reach out and we’ll start you down the road to being a well-informed, confident and happy home buyer today.

What should you avoid during the loan process?

 

Here are Mortgage DOs and DON’Ts to follow during your loan process.

 

DO:

Keep All Records in Good Order.

 

  • Availability – Keep your financial records close at hand in case updates are requested.
  • Income – Be aware that underwriters typically verify your income and tax documents through your employer(s), CPA, and/or IRS tax transcripts. Hold onto new paystubs as received.
  • Assets – Continue saving incoming account statements. Keep all numbered pages of each statement. Ex. 8 of 8.
  • Gifts – If you’re receiving any gift money from relatives, they’ll need to sign a gift letter (we’ll provide) and an account statement evidencing the source, which must be “seasoned” funds.
  • Current Residence – If you’re renting, continue paying your rent on time and save proof of payment. If you’re selling your current residence, be prepared to show your HUD-1 Settlement Statement. If you’ll be renting your home, you may need to show sufficient equity, a lease and receipt of the first month’s rent and security deposit.

 

Keep your credit shining. Continue making payments on time. Your credit report may be pulled again, and any negative change to your score could cause you to lose your approval and your home.

 

Understand that things have changed. Underwriters require more documentation than in the past. Even if requests seem silly, intrusive or unnecessary, please remember that if they didn’t need it, they wouldn’t ask.

 

 

DON’T:

Apply for new credit. Changes in credit can cause delays, change the terms of your financing or even prevent closing. If you must open a new account (or even borrow against retirement funds), please consult with me first.

 

Change jobs during the process. Probationary periods, career or even status changes (such as from a salaried to a commissioned position, leave of absence or new bonus structure) can be subject to very strict rules.

 

Make undocumented deposits. Primarily large but sometimes even small deposits must be sourced unless they are identified. Make copies of checks and deposit slips. Keep your deposits separate and small. Avoid depositing cash.

 

Wait to liquidate funds from stock or retirement accounts. If you need to sell investments, do it now and document the transaction. Don’t take the risk that the market could move against you leaving you short of funds to close.

 

Ever be afraid to ask questions. If you’re uncertain about what you need or what you should do, I’m here to help you through the process, even long before you intend to buy.

Four Keys to Buying Your First Home

Are you getting ready to buy a home? Here are four keys to being prepared to make your first offer.

 

 

1. Know what you can afford and how much cash you will need. Knowing what you qualify for before looking at any homes will save you the disappointment that can come from falling in love with a home that’s out of reach. We’ll be happy to “pre-qualify” you now so you’ll know what will work later.

 

2. Know where you want to be. Learn about the neighborhood before you make an offer to buy. Sample the commute. Talk to would be neighbors. See the schools, shops and services before you start negotiating.

 

3. Choose your property type. Consider your range of choices: single family, multi-family, townhome, condo, co-op, new construction, etc. Know the pros and cons of each. Decide which is best for you, and define your search accordingly.

 

4. Obtain a valid pre-approval before you make an offer. This entails document verification, a credit check and automated or actual underwriting. If all is in order, you will receive the equivalent of a loan commitment that’s subject to a contract, appraisal and title work. Your pre-approval gives you and the seller confidence in your ability to close the deal once you find your perfect home.

 

You will probably buy a home only a few times in your life, but we’re laser focused on the process every day. We know how important proper preparation can be to making the process easy and rewarding. Now, so do you.

Tips on Title Insurance

It is my pleasure to have the opportunity to work with you on your home loan. I thought you might find the following information on title insurance helpful.

Title insurance is a policy provided by the title company or attorney’s office that guarantees the accuracy of the research done on the title of your home at the time of purchase.

Negotiating Your Way to Your Dream Home!

Image result for negotiate home price

 

Most people are prepared to negotiate when they go car shopping. But, what about when buying a home? Savvy homebuyers understand that everything is negotiable!

It’s a good idea to sharpen your negotiating skills, or work with a talented real estate professional that can help you negotiate the best deal. Here are some areas that have room for negotiation.

•    The purchase price
•    When you can move in
•    Painting: Part of the home or the whole thing
•    Repairs: Roof, plumbing, windows, etc.
•    Yard: Landscaping, removal of unwanted trees or bushes, etc.
•    Fixtures: Which lights, fans and appliances stay or go
•    Furniture: Whether the seller will leave certain pieces

I recommend working with an experienced professional who knows the market and is ready to negotiate on your behalf. Please let me know if you need a referral to one of the preferred real estate agents in my network.

My team and I are ready to help you secure the best loan program to meet your needs. Please contact me to schedule a consultation. Our goal is to provide you with such great service, that you will gladly refer your family and friends to us for assistance with their mortgage planning.

Credit Score Tip – Will Rate Shopping Damage My Credit Score?

I hope you’re doing well! When you’re in the market for a mortgage loan and looking for the best rates, you may be wondering if multiple credit inquiries will affect your credit score.

New credit ‒ including credit inquiries ‒ accounts for 10 percent of your total credit score. Any time you give written authorization to a lender to pull your credit report, it’s called a “hard inquiry.” This pertains to any application for a mortgage loan, auto loan, student loan, new credit cards, or bank loans. Each hard inquiry can cost you anywhere from 1 to 5 points.

So, if you were to apply for all these different types of loans within a short period of time, you can expect your credit score to drop, based on too many credit inquiries.

Likewise, if you apply for multiple credit cards at the same time, that legitimately adds multiple inquiries to your credit report and increases your risk factor. Revolving debt is considered a higher risk, because each credit line has its own spending limit. You could potentially max out every card and decrease your ability to honor other financial obligations.

The good news is, most credit scoring systems understand that if you’re shopping for a car or interested in buying a home, that’s a big investment and you’re going to want the best deal you can possibly get.

If you apply for multiple mortgage loans within a 14-day period of time, most credit scoring systems will lump all of those requests into one inquiry. They recognize that you are shopping for the best rates. (You could have up to 45 days, depending on which credit scoring system and software version each lender uses. 14 days is considered the “safe zone”.) This gives you some leeway to shop around without hurting your credit score.

I’m not trying to encourage you to shop around for your mortgage loan, because I want to earn your business and be your mortgage consultant for many years to come.

Based on my honesty, I hope that you will come to me for all your mortgage needs. My team and I are ready to invest our time and commitment to get you the best mortgage loan we possibly can, and help you achieve your long-term financial goals.

How to Get a Perfect Credit Score

Your credit score is a number between 300 – 850, and the higher your credit score is, the better you look to lenders! Whether you want to buy a car, get a mortgage loan, or make payments on any large purchase, your credit score helps the lender evaluate your creditworthiness. Simply put, the lender wants to know what risk is involved in lending you money.

There are three main credit reporting companies (CRCs) that compile credit scores; Equifax, Experian and TransUnion.  Each of these agencies generate a FICO® Score, VantageScore®, or another type of score; based on what scoring system the lender uses.*

The resulting scores from the three CRCs are usually not exactly the same, and the lender typically recognizes the mid-range score.

Bear in mind, there are other things the mortgage lender will look at. But, your credit scores play a significant role in your ability to obtain a home loan. Here are the five factors that make up your credit score, based on the FICO scoring model.

•    Payment History = 35% of your score
This portion of your score tracks whether or not you make payments on time. This includes information reported from credit card accounts, retail store accounts, installment loans, loans from finance companies and mortgage loans. Late payments, collection accounts and bankruptcies have a negative effect in this area.

•    Amounts owed = 30% of your score
This portion of the score looks at the total amount of money you owe. In regard to credit cards, this tracks the ratio of the amount of credit used in comparison to the amount of credit available. It also tracks installment loans (such as car loans), and how much is currently owed in comparison to the amount of the original loan.

•    Length of Credit History = 15% of your score
This portion of your score takes into consideration how long you’ve had specific credit accounts, and the total average of all of those accounts. So, you don’t necessarily want to  get rid of your old credit cards. That history could help you in this area.

•    Types of Credit in Use = 10% of your score
This part of your score looks at the mix of credit you’re using and how you manage all of those credit lines together. If you’re just trying to establish credit, start by opening one credit account and make your payments on time before you add more credit lines into the mix.

•    New Credit = 10% of your score
This percentage of your score looks at how many credit lines are new, and the number of inquiries that have been placed. For example, when you apply for a new credit card, student loan, auto loan or a mortgage, that’s considered to be a “hard inquiry”. Too many hard inquiries in a short period of time will lower your credit score. However, if you apply for a job and the employer does a background check, that’s a “soft inquiry”, which doesn’t affect your credit score. Also, if you check your own credit score, it does not lower your score.

There are many companies that advertise credit repair services and free credit reports. AnnualCreditReport.com was created by Experian, Equifax and TransUnion and is recommended by the Federal Trade Commission (FTC). This service entitles you to get a free credit report once every 12 months from each CRC.

It’s best to order all three credit reports at the same time ‒ six months before you apply for a home loan ‒ and examine them carefully. Remember, the higher your credit score is, the better it is for you when it comes time to apply for a mortgage.

Survival Guide to a Real Estate Closing

As your mortgage consultant, my team and I provide you with more than just a loan. We want to do everything we can to make your loan closing as easy as possible for you!

When the time comes to close the deal on your new home, a lot of things are happening all at once. You can expect the real estate transaction and the financial transaction to close on the same day! With that in mind, I wanted to share some tips to help you prepare for this exciting day.

Important Tips for a Smooth Real Estate Closing

You’ll be reviewing many legal documents that will require your full attention, so make sure your calendar is clear of any other appointments.

  • Review Loan Documents in Advance– We will touch base in advance to prepare you for your loan closing. There should be no surprises at this point, providing we have locked in the interest rate for your loan to coordinate with the timing of your real estate purchase.

At the final closing, you will need to review every legally binding document carefully and make sure there are no typos or errors, and the loan terms are listed as we have discussed. Any typos or errors must be corrected prior to closing. We will go over each document with you, so you have a clear understanding of your financial commitment.

  • Be Prepared for Closing Costs– Prior to closing, you should know exactly what your closing costs are. It’s best to have a cashier’s check ready to pay your closing costs. (An electronic funds transfer could delay the process, depending on what time the transfer posts.) This includes any fees, taxes, charges and your down payment. Again, we will review this with you, so you have a full understanding of your closing costs. Don’t be afraid to ask questions! We’re here to help.
  • Make Sure Your New Home is Ready to Live In– When you do your final walk-through of the property, make sure all repairs have been made that were agreed upon and the home is ready to occupy. Otherwise, your Buying Agent can make additional negotiations with the Selling Agent to resolve any outstanding issues. Your final walk-through should be done before the final real estate closing documents are signed. Allow for at least 30 minutes to do your final walk-through.

I hope you find these tips helpful. If you have any questions, please don’t hesitate to give me a call.

Tips on Financial Planners

Here are a few tips on selecting a financial advisor and creating a financial plan, which you may find helpful.

•    Deal only with a licensed financial advisor.
•    Ask questions until you completely understand.
•    Make sure your financial plan fits your individual needs and personality.
•    If you feel uncomfortable, it’s OK to walk away.
•    Keep all of your paperwork in a safe place.
•    When you have a good plan put together, stick to it!

If you currently have a great relationship with a financial planner, then congratulations! If not, I would be happy to introduce you to an advisor that I work with and fully trust. Please give me a call if there’s anything I can do to help.