Real Estate and Mortgage Information

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April 18, 2020

1 Thing to Know About Credit Reporting

What do the Credit Reporting Agencies actually know?  

The answer is:   Not that much.  

Here is what they do know: 

  • When an account was Opened
  • The Limit
  • The Balance
  • The Reported Payment
  • The type of loan
  • Payment History (reminder: payments are only late if they are 30 days late)

They DO NOT know: 

  • How much money you have in the bank
  • If you have a 401k
  • What your salary is
  • How secure your employment is
  • Or if you have a wealthy Uncle who can loan you money 

With such limited information, Credit Agencies make a lot of assumptions.  For this reason, a fico score can easily be manipulated in your favor. 

The 1 thing to know

A credit score reflects the risk to a NEW lender extending credit.  An applicant with money in the bank is a lower risk borrower.  Since credit scores do not reflect your reserves, they consider available credit on your credit cards as cash in the bank. 

Example:

Buyer 1 has a credit limit of $10,000 and the balance is $2,000.  Credit agencies see $8,000 in the bank and reward Buyer 1 with extra points.  These extra points represent a lower risk to a new lender. 

Buyer 2, pays cash for most things, has one credit card with a credit limit of $500 and the limit is $450.  Credit agencies take away points for those with little available credit.  

Credit Scores are a Game and you can win. 

Doing this 1 thing WILL improve your score: 

  • Ask for a higher limit on your existing credit card accounts
  • Apply for more credit cards
  • Pay down your existing cards starting with smaller ones that are close to their limit
  • Consolidate credit card accounts into a personal loan or installment loan.

For those with more difficult credit:

  • Obtain a secured credit card, be sure that the account will report to the credit agencies
  • Then get another one and once you have increased your scores you can request more non-prepaid accounts. 

To see what you might qualify for and see how you can improve your score, even more, click here for an appointment with a Platinum Rated Mortgage & Credit expert.

Good Credit Scores = Having Available Credit and making your payments on time. 

FOR A FREE CREDIT EVALUATION FROM AN REC PREFERRED PARTNER CLICK HERE

Credit evaluations included a free credit simulator and can match you with potential loan options. 

Posted in Credit Reports
April 18, 2020

6 First-Time Home Buyer Loans and Programs

6 First-Time Home Buyer Loans and Programs

The first step to buying a home is determining which loan will work for you.  Here is a quick summary of some of the most widely used programs. 

Summary: First-time Home Buyer Loans & Programs

1.  FHA Loan: The go-to loan program for buyers with less than perfect credit.  FHA requires a down payment of 3.5% of the purchase price.  This program also allows for the seller of the home to pay for ALL of the closing costs.  There are second mortgages and grants to help with the down payment portions for those who qualify.   Learn More

2.  VA Loan: 100% financing available for borrowers with a military connection.  Another benefit is no monthly mortgage insurance, low rates and allows the seller of the home to pay all of the closing costs. Learn More

3.  USDA Loan: 100% financing on rural properties.  You can use the USDA’s property eligibility page to see if the home you want to purchase qualifies. You must also have a credit score of at least 640 points, but exceptions can be made for lower scores.  You must also meet the USDA’s income standards for your area. To see if your income qualifies you for a USDA loan, use the USDA’s income eligibility calculator.  Debt to income ratio limits are much lower on this product compared to others.  Learn More

4.  Fannie and Freddie: These are Conventional loans and both investors offer a 3% down payment option for first-time home-buyers (home buying course required for these loans prior to funding, the typical fee is $75).  These loans are normally for those with better credit scores as those with lower scores benefit from the lower rates and mortgage insurance premiums of an FHA loan.  The seller contribution towards the closing costs is limited to 3 percent of the purchase price of the home.  Learn More          

5.  State/Local First-Time Home Buyer Program: Assistance is typically given in the form of a loan that can be forgivable at some point in the future (typically 7 to 10 years from purchase).  Requirements vary, but typically these programs are for those with household incomes less than 80 percent of the county’s median income limits.  Some of these programs can make it difficult to refinance or sell.  Learn More

6.  Home Renovation Loan: Buy a home that needs some work and remodel it with one loan.  There is typically a down payment portion required and these loans can take longer and come with additional costs and the involvement of a licensed General Contractor.  The FHA 203k loan is an example of a renovation loan. Find out if this loan type of loan would work for you

*Real Estate Connection’s Premier Lender List is a vetted group of industries Top Mortgage Professionals with access to the widest variety of loan options.   

We certainly hope you have found this quick summary useful.  We have personally vetted hundreds of lenders and loan professionals so that you have the widest variety of options and the best possible service.  To have one of them help you explore all of your options are CLICK HERE.

April 8, 2020

Curious About Local Real Estate?

Receive the Latest Local Market Stats

Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

Get Local Market Reports Sent Directly to You

You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates