HOW TO GET CREDIT SCORES FOR THE BEST MORTGAGE RATES

When you are seeking the best possible rate for your mortgage, your credit score takes on an added level of importance. Your credit score and your credit report are the two main tools that are used to decide your mortgage rate and failure to remain up to date can lead to serious issues later.

A lower mortgage rates equals a lower mortgage payment. It also means lower interest payments during the course of the loan you receive. By improving your credit scores before you apply for an FHA loan, a VA loan or any other mortgage, you can save yourself untold amounts of money, as well as hassle. Read on to learn more about how to obtain credit scores for the best mortgage rates.

Find Out Your Score

It is impossible to determine the effect of your credit score on your mortgage rate, unless you have a strong idea of where you stand. Creating a baseline is the first step towards improvement. The law allows you to obtain a free credit report once year, from one of three different providers: Experian, TransUnion and Equifax. CreditKarma.com also provides free credit scores for those who are in need. View your credit score as an annual obligation and be sure to remain up to date at all times.

Know How The Score Works

While it is all well and good to be aware of your credit score, you must also learn about how it works. When making a final lending decision, 90 percent of all lenders will use the score as a crucial factor during the process. There are five categories that a mortgage applicant must be aware of. The types of credit used and new credit each account for 10 percent of your total score. The length of your credit history makes up 15 percent, while the amounts that you owe make up 30 percent. At 35 percent, your payment history is the most crucial factor of all.

Work On Your Errors

A credit report is not infallible and may contain a series of errors. If you do not correct these errors, they are considered fact by your potential lenders. This is why it is so important to remain up to date on your credit score at all times, so that you can find potential errors and fix them as quickly as possible. When you find an error on your credit report, it is your responsibility to contact the bureau that is responsible for the mistake and rectify it immediately. Fixing one error could allow your credit score to rise by as much as 30 to 40 points.

Get Rid Of All Disputed Accounts

Should you locate any errors on your credit report, these are also known as disputed accounts. All of these disputed accounts must be removed from your credit score as quickly as possible, so that you can receive the best mortgage rate available to you. In order to remove disputed accounts from your report, simply contact the bureaus in question and ask them to either resolve the disputes or remove them entirely.

Pay Debts Down

As you now know, payments owed are the most pivotal aspect of your credit score. As such, it behooves you to pay your debts down as soon as possible. When your balances are kept low, this has an extremely positive impact on your credit score and allows lenders to provide you with a much lower mortgage rate. If you have outstanding credit card balances, it is in your best interests to pay them down to within at least of your total overall limit. Doing so is an easy way to bump up your credit score prior to the mortgage application process.

Don’t Pay Bills Late

This should go without saying, but late payment of bills leaves a severe blemish on your credit report, especially when these late payments are not addressed in a timely manner. After a delinquent payment has been added to your credit score, a potential mortgage applicant has precious little recourse. If you are looking to improve your past payment history, annually review your credit report and report errors. It is also important to remember that late payments can cause a credit score that is satisfactory to drop very quickly.

Use Your Credit Wisely

In addition to paying your bills on time, you also want to keep the outstanding balances on your credit cards low. The key to using credit wisely? Only apply for credit when you truly need it. Before applying for credit, ask yourself if the item is a need or a want. Applying for credit in order to obtain an item you want, as opposed to one that you need, is how people end up overextending themselves financially. Keeping a number of revolving credit card accounts serves as a colossal red flag to mortgage lenders and should also be avoided.

Be Careful About Closing Accounts

This one can be a tad tricky, as a mortgage lender is not going to want to see a bevy of open accounts on your credit report. But it is also important to remember that there is a certain ratio that lenders like to see, when it comes to the applicant’s credit used versus their open credit. Closing accounts just before applying for a mortgage can adversely affect a client’s score and when balances on remaining credit cards continue to remain the same, this also causes a much lower overall credit score.
The answer to the question “How To Obtain Credit Scores For The Best Mortgage Rates” is much easier than financial institutions have led you to believe. By remaining vigilant when it comes to checking your scores, correcting any errors as soon as possible, carefully managing your money and paying bills on time, you can obtain a mortgage rate that fits your financial needs. Simply find out your score and then take the necessary measures to make the improvements needed, so that you make your dream of owning your own home into a reality.

Source: Realty Times/R. Abbe/October 29, 2015

Picking a Real Estate Agent through Facebook

According to a joint study released by Google and the National Association of Realtors, 2 of 3 people searching for a prospective real estate professional research them“extensively online prior to working with them". And, that number is probably increasing every day. Are social media channels such as Facebook really a good place to gather information about an agent before using them? If so, what should you look for? There is a plethora of information on any subject available on social media sites such as Facebook. A recent study by the Pew Research Center revealed that 63% of Americans now even get their news from Facebook (up from 47% in 2013). It is no different for both buyers and sellers of real estate. Yes, Facebook is a good place to gather information about the housing market and “checkout” an agent you are considering hiring to help buy or sell a home.

What should you be looking for in an agent’s Facebook presence?

You want an agent that cares more about you and your family than they care about bragging about themselves. One way to determine this is to look at what they post on their Facebook page. Are they more interested in ‘hawking’ a listing or bragging about their accomplishments or are they trying to post insightful information that will help you make the best decision for you and your family? At a recent real estate conference, Guy Kawasaki, an executive fellow at the Haas School of Business at U.C. Berkeley, gave the following advice to the Realtors in attendance:

“Value comes in the form of information and assistance. You want to establish a position where people see - through your social media efforts - that you know what you’re doing and are helpful…The point is to make yourself useful and valuable. To build credibility; to build trust…”

You should look for an agent that follows that advice!

 

Source: The KCM Crew/Keeping Current Matters/10292015

Why You Should Hire A Professional When Buying A Home!

Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if you are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift out the homes that do not fit within the parameters of your “dream home”. A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes. Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

Source: Keeping Current Matters/The KCM Crew/October 27, 2015

Buying A Home Can Be SCARY… Until You Know The FACTS!

Some Highlights:

• 36% of Americans think they need a 20% down payment to buy a home. 44% of Millennials who purchased a home this year have put down less than 10%.
• 71% of loan applications were approved last month
• The average credit score of approved loans was 723 in September (the lowest recorded score since Ellie Mae began tracking in August 2011).

Source: Keeping Current Matters/The KCM Crew/10-23-2015

YOU DON'T NEED YOUR OLD DEED

Question: We recently read about a possible scam operation, whereby a company advises homeowners that to protect themselves -- and their valuable home -- they have to spend a lot of money to get a certified copy of their deed. We own our house and obviously want to protect this large investment. How do we determine which company is legitimate and which is not. Answer: The simple answer is that you do not need a certified copy of your deed. In fact, once the deed to your houseis recorded into your names, you really do not even need the deed at all.

Typically, when a consumer buys a house, he/she goes to a settlement attorney or title company. The settlement officer has the responsibility of gathering in all of the sales proceeds, making sure that the buyer signs the loan papers and the settlement statement(called a HUD-1). (Note: as of October 3rd, the HUD-1 and the final Truth in Lending statement have been replaced by a new document known simply as "closing disclosure"). The seller provides the settlement company with the names and loan numbers of all existing loans, and signs the deed and other related documents which are required in order to record the deed into the buyer's name. When settlement has been completed, the deed and the loan papers are sent to the recorder of deeds in the jurisdiction where the property is located. These documents are recorded, and then sent back to the settlement attorney. The recorded loan documents are then returned to the mortgage lender and the deed and the title insurance policy is sent to the buyer. It is a good idea to keep all of your settlement documents, especially the HUD-1 settlement statement. When you go to sell the property, and if you have made more than the $250,000/500,000 exclusion of gain currently allowed under the tax laws, the settlement statement will come in handy to justify various settlement expenses so as to reduce your overall profit. You should also get a copy of the deed of trust (the mortgage document) and the promissory note which you signed at settlement. Hopefully, you will never need these documents, but should the lender send you a letter stating you are in default on your loan obligations, it is always a good idea to refer back to these documents. They spell out what the lender can and cannot do, and the process by which you can be determined to be in default.

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The title insurance policy is also a very important document. In the event someone suddenly raises an issue against or about your property, you may be able to file a claim with the title insurance company that issued the policy. For example, an old mortgage was never released from land records, and shows up when you go to sell your house. There usually are specific time limitations spelled out in the title policy which require you to file the claim within a certain number of days after you learn about the problem. The policy will also explain what is covered and what issues are not insured. Another document you should get at settlement is the survey. This is known as a house location survey, and will give you a general picture of where your property lines are. If, for example, your neighbor's fence encroaches on your property, -- or vice versa -- the survey should depict this and you should be advised of this issue when you are at the settlement table. There is a concept known as "adverse possession". Many states provide that if you are on someone else's property for a period of time, and this encroachment is "open, notorious and hostile", you will ultimately own the property if you seek court approval. One Judge defined adverse possession as follows:

"the person claiming the property by adverse possession must unfurl his flag on the land and keep it flying so that the owner may see, if he wishes, that an enemy has invaded his domain and planted the flag of conquest."

State laws differ, and you should consult your own attorney for more details should you be involved in such a situation. For example, in the District of Columbia and in the Commonwealth of Virginia, the statutory limit is 15 years. In Maryland. 20 years are required before you can claim title by adverse possession. But what about the deed to your property? Once it has been recorded, you should never need it again. When you go to sell the property (or refinance your current mortgage) the settlement attorney (or escrow company) will conduct a title search which should show you own the property. You do not have to give the deed to anyone. If you are concerned about ownership, here are two suggestions: first, go to the office of the recorder of deeds in the jurisdiction where your property is located, and ask to confirm you own the property. A helpful clerk may even be able to provide you with a copy. In fact, many jurisdictions (such as the District of Columbia) have web sites whereby you can search all transactions going back a number of years, and for a nominal charge, print up a copy. Alternatively, you can ask your attorney to run a title search just to confirm that you are, in fact, the lawful owner of your property. Under no circumstances, however, should you waste your money with any company that offers you a certified true copy of your deed. It is absolutely unnecessary.

Source: RealtyTimes/Benny L. Kass/06 October 2015

Do You Really Think Your Landlord Pays for Repairs?

A recent article that appeared on Nasdaq.com addressed the issue of whether it is best to buy or rent in today’s real estate environment. The article was very fair in discussing both options. However, there was one portion of the article that we questioned. One of the experts was quoted as saying:

“For some people, the choice is very clear: Buying a home can be more costly, given the cost of the purchase itself, plus taxes and insurance, plus maintenance and repairs.”

This argument is often made in defense of renting. However, we don’t believe it makes logical sense. They claim that, as a renter, you won’t have the expenses of “taxes and insurance, plus maintenance and repairs”. Do they really believe that the landlord pays all those expenses for their tenants? The vast majority of landlords own rentable real estate as a form of investment. As any other investor would, they expect to make a return on that investment (ROI) - otherwise known as profit. In order to make a profit, the landlord needs to include EVERY expense they incur into the rent…AND THEN ADD A PROFIT MARGIN!! We think it is incorrect to advise a prospective renter that they won’t have the same expenses that a homeowner would have. They just pay those expenses to a landlord with a “premium” built in.

Source: Keeping Current Matters/The KCM Crew/10-15-2015

4 Reasons to Buy BEFORE Winter Hits

It's that time of year; the seasons are changing and with them bring thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don't have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 10.5% (most pessimistic) and 25.5% (most optimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year. An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.