Preparing Your Credit Score for Homeownership
By Marcus McCue, Executive Vice President & Chief Business Development Officer, Guardian Mortgage Company, Inc.
Sure, saving for a down payment is important, but too many home buyers get caught up in the “save, save, save” mindset, only to find themselves with a bad deal and a huge mortgage payment down the road.
Why? Because they neglected their credit along the way.
You see, your credit plays a huge role in the type of mortgage loan (and the mortgage rate) you can get when buying a home. While putting away a thousand a month could certainly help you put a chunk of change down up front, you might actually be better served by putting those funds toward your credit card debt, student loans, car payments or other outstanding lines of credit you have open.
The truth is, the best use of one’s money varies from person to person. The important thing is you take a long hard look at your credit score – and credit history – long before you consider buying a home. You need to:
- Run your credit report. Get your free annual credit report from Experian or Equifax, and pay the small extra fee to get access to your credit score. The minimum you’ll need to secure a mortgage loan is a score of 580, but keep in mind, the lower your score is on the spectrum, the higher mortgage rate you can expect – and that means more interest (and more money spent) in the long run.
- Look at your credit history. You should also look at the credit history on your report. How long have you had lines of credit open? What has your payment history been like? Lenders look for borrowers who have proven their ability to make payments reliably over time. The more you’ve paid your bills on time, the better borrower you make.
- Find room for improvement. If you only have one or two lines of credit, have had a spotty payment history or your credit score is low, you definitely have some room for improvement. Instead of getting yourself deeper into debt with a mortgage loan now, consider how you can make your current credit report look even better. If you have a low score, work on paying down your outstanding debts and making payments on time, every time. If you’re short on lines of credit, open up a new credit card and use it for daily purchases. Then, every week, pay it off in full from your debit account. It’s a great way to boost your score and give yourself better credit history at the same time.
- Avoid making big purchases. The fastest way to make a bad credit situation look even worse is to make a big purchase right before you apply for a mortgage. This sends up an immediate red flag to your lender, signaling that you might be more than a little irresponsible with your money. Steer clear of any big purchases if you’re preparing to buy a home, and save big-ticket items for later, once you’re settled in at your new place.
- Run your credit again. Once you’ve done some work, run your credit report again (keep in mind, you will have to pay if it’s within a one-year period). Check to see how your score has improved and what your credit history looks like after putting in the time. If you’ve seen a boost in either, you’re probably safe to apply for pre-qualification, which will give you an idea of what sort of mortgage loan and rate you could currently secure.
Preparing your credit for homeownership is crucial – especially if you want a great rate with a great lender. Want to know what your current credit would garner you? Contact a loan officer and apply for pre-qualification today. We’re here to help.
Credit score when buying a home, Preparing Your Credit Score for Homeownership
By Shannon Biszantz on December 11, 2015
in Biszantz Connection, Coldwell Banker, Economic Real Estate News, In My Opinion Only, Rancho Santa Fe, real estate, Real Estate News, San Diego, San Diego Homes, San Diego Real Estate, Shannon Biszantz
I wanted to share this article I found at realtytimes.com. I am sharing this as a way for us to be informed and updated with the real estate industry. After all, real estate is an investment and we are doing our best to keep you in the loop.
When dealing with real estate matters, the law is clear: everything has to be in writing. Thus, you will need a sales contract, which will spell out all of the terms, conditions and special requirements you may (or will) need in order to conclude the transaction and go to closing (settlement) on the house.
If there is no real estate agent involved, your attorney should be able to assist you in preparing the contract offer. If there is a real estate agent, you can get a form sales contract from the agent. In fact, the agent should be able to assist you in preparing the document for presentation to the seller, although your attorney should review it before you sign.
Typically, the buyer makes a written offer to the seller. The seller has three alternatives:
1. The contract can be accepted;
2. The contract can be rejected in its entirety, or
3. The contract offer will be countered, with different terms.
It is rare that the seller will opt for alternatives one or two; in most cases, the potential buyer will receive a counter-offer. Then, the buyer has the same three alternatives.
There are certain things which must be included in any sales contract.
- The property must be clearly identified, preferably by street address.
- The contract must be contingent upon your obtaining financing. You should allow yourself some time — usually 30-45 days — in which to make an application from a mortgage lender and get a written commitment that you have been approved for the loan. Under the new Consumer Financial Protection Bureau (CFPB), it will take more time, so you may want to give yourself up to 60 days in which to finalize the deal.
- Unless you are an experienced contractor, it is advisable that you make the contract contingent on your obtaining a satisfactory home inspection. You should give yourself 5-7 days after the contract is signed to have the property inspected. If you are not satisfied for any reason after you receive a written report from the inspector, you should have the right to terminate the contract, and get back your earnest money deposit.
- How much earnest money should you put up when you sign the sales contract? There is no magic formula and no law dictating a certain percentage of the purchase price. When you sign a contract, in order to make it a valid, legal document, the buyer should put up some money as a good faith earnest money deposit. These funds will be held by the real estate broker or the settlement attorney until settlement takes or until either the buyer is entitled to a return of the deposit (because the contingencies cannot be met) or the buyer is in breach of the contract, in which case the money would go to the seller.
IMPORTANT CLAUSES IN YOUR REAL ESTATE CONTRACT
By Shannon Biszantz on April 15, 2015
in Biszantz Connection, Coldwell Banker, Economic Real Estate News, Educational for Buyers, Home Price Indices, Real Estate News Of Interest, San Diego, San Diego Real Estate, Shannon Biszantz, The San Diego Real Estate News, Tips for Sellers and Buyers
San Diego home prices in June rose 19% from a year ago.
Home price gains in San Diego outpace U.S.
San Diego home prices in June rose 19% from a year ago.
The pace of U.S. home-price increases began to slow by mid-year but not in San Diego County, where values took their largest annual jump in more than eight years, the S&P/Case-Shiller Home Price Index showed on Tuesday.
San Diego home prices in June rose 19 percent from a year ago, which marks its largest year-over-year hike since March 2005. The latest data also shows San Diego is outpacing national home-price growth, which was 12 percent when tallying all 20 areas in the index.
This is often the storyline for supply-constrained counties like San Diego: A limited amount of land means a limited number of homes can be built, which tends to drive up prices, said Michael Lea, a real estate professor at San Diego State University.
“We have more land constraints than most other cities,” Lea added. Similar areas include Los Angeles and San Francisco.
All 20 major metros in the Case-Shiller report showed price gains in June’s report, but fewer cities saw faster growth this month than last month. In this report, six fit that bill. In the previous report, it was 10. Also, more than half of the areas in the index showed weaker month-to-month gains.
For more information on this article from Lily Leung at the Union Tribune:
http://www.utsandiego.com/news/2013/aug/27/san-diego-home-prices-real-estate-values-gains/
California, Coldwell Banker, Economic Real Estate News, San Diego, San Diego Real Estate, Shannon Biszantz
By Shannon Biszantz on December 18, 2014
in Biszantz Connection, California Housing Economy, Coldwell Banker, Economic Real Estate News, Educational for Buyers, Home Price Indices, House Hunting in San Diego, San Diego, San Diego Homes, San Diego Real Estate, Shannon Biszantz, The San Diego Real Estate News, Tips for Sellers and Buyers
San Diego Home Prices Gain and Outpaces U.S. Real Estate Sales.
San Diego Real Estate Sales prices surge and reach higher than United Sates Real Estate Sales.
San Diego Home Prices Outpace U.S.
The pace of U.S. home-price increases began to slow by mid-year but not in San Diego County, where values took their largest annual jump in more than eight years, the S&P/Case-Shiller Home Price Index showed on Tuesday.
San Diego home prices in June rose 19 percent from a year ago, which marks its largest year-over-year hike since March 2005. The latest data also shows San Diego is outpacing national home-price growth, which was 12 percent when tallying all 20 areas in the index.
All 20 major metros in the Case-Shiller report showed price gains in June’s report, but fewer cities saw faster growth this month than last month. In this report, six fit that bill. In the previous report, it was 10. Also, more than half of the areas in the index showed weaker month-to-month gains.
The sudden uptick may have pushed some on-the-fence buyers into the market but also may have priced out others.
“Home buyers may be discouraged and sharp increases may be dampened,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices, in this month’s analysis.
The significant drop in local foreclosure resales also may explain why the county outpaced the nation in home-price growth. Foreclosure resales, which tend to carry discounts, made up 7 percent of home sales in June, down from 20 percent the previous year.
Home prices are rising in part because an increasing number of real estate investors are putting their investments on the market, typically refurbished and going at a higher price, said Lea, with San Diego State University.
San Diego County’s median continues to hover at a 5-1/2 year high.
If you would like to see any property throughout San Diego Area, one of us at The Biszantz Connection at Coldwell Banker would be pleased to show you the area!
858-755-0075- Coldwell Banker
Biszantz Connection Direct Line: 619-417-4655
California, Coldwell Banker, Economic Real Estate News, Rancho Santa Fe, San Diego, San Diego Real Estate, Shannon Biszantz
Fixed Rate Mortgages Continue to Decline.
Fixed Rate Mortgages averaged below 4% .
Fixed Rate Mortgage rate levels at its lowest level since the week of June 20th.
the average fixed mortgage rates hitting new lows for the year as. At 3.97 percent the average 30-year fixed rate is at its lowest level since the week of June 20, 2013 when it averaged 3.93 percent. This was also the last time the 30-year fixed averaged below 4 percent in the PMMS until this week.
30-year fixed-rate mortgage (FRM) averaged 3.97 percent with an average 0.5 point for the week ending October 16, 2014, down from last week when it averaged 4.12 percent. A year ago at this time, the 30-year FRM averaged 4.28 percent.
15-year Fixed Rate Mortgage this week averaged 3.18 percent with an average 0.5 point, down from last week when it averaged 3.30 percent. A year ago at this time, the 15-year FRM averaged 3.33
In my humble opinion, I keep wondering how long is this going to last where it is so cheap to borrow money? If you are sitting on the fence as to whether to buy a home, these low Fixed Rate Mortgages make an undeniable argument to get off the fence and start investing in your future through buying rentals, first homes, investment income….Call Shannon Biszantz at The Biszantz Connection and we can sit down and discuss what your needs are and how best to raise your personal investment portfolio. 619-417-4655 or Shannon@ShannonBiszantz.com
– See more at: http://www.worldpropertyjournal.com
California, Economic Real Estate News, Shannon Biszantz
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