Tips for #NewHomebuyers

Tips for New Homebuyers:

  1. Saving money for down payment. The least amount needed to buy a home is 3.5% of the purchase price of the home. Keep this in mind when wondering how much is needed for a down payment. The more money you have to put down, the better.
  2. Improve credit. Most lenders will require a middle credit score of at least 640 and each person’s credit is unique. There are many assumptions and myths about credit. Please don’t hesitate to call with questions or come attend one of our free credit classes to better understand how credit works and what you can do to improve your scores.
  3. Get Pre-Approved. It’s extremely important to sit down with a loan originator to go over your credit and documents to figure out what mortgage payment and house value you can afford to buy. Each person’s situation is unique and there are multiple factors that go into qualifying for a loan. Call us today to sit down for a free consultation and better understand what you qualify for.
  4. Create list of wants and needs in a house. What neighborhood you want to move to, how many bedrooms and bathrooms you need, what schools do you need to stay by, do you prefer a garage and/or basement, what’s your minimum requirement for square footage, what monthly mortgage payment would you be comfortable paying, etc.
  5. Interview for an agent. It’s important to make sure you hire a real estate agent that knows the process and works well with not only you, but the loan originator and seller’s realtor. We recommend you call and interview at least 3 agents to make sure you get paired with the right one. I work with some of the top agents in the Denver metro area and can recommend a couple for you to contact.
  6. Understand what type of market you’re in. Denver is currently in a strong seller’s market. This means there’s a lot of competition for houses and you will probably have to make an offer immediately on a house you like, overbid and expect not to get seller concessions to cover some of your closing costs.
  7. Ask questions. The process of buying a home can be frustrating and confusing. There’s a lot of information, fees and new regulations. Don’t hesitate to ask questions and trust your gut. If you’re not getting answers or don’t feel comfortable with the process, look into working with someone else. Buying a house will probably be the largest purchase of your life and you need people that are going to guide you through the process and look out for your best interest.

Let me know if you have any questions, comments or referrals.

Your Lender for Life,

Lauren

How Your #CreditScores are Calculated

We still don’t know how credit is exactly calculated by the 3 bureaus (TransUnion, Experian and Equifax), because they will not release their algorithms. But they have given a percentage of how things are broken down:

– 35% Payment History:   This includes how many times you’ve been late on accounts, when the last late was and how severe you’ve allowed accounts to go delinquent.

– 30% Amounts Owed: Total amounts owed on all accounts as well as the difference between your balances and limits (utilization). People who max out their limits have a greater risk for default. If your accounts are over 50% of your limit, this will negatively affect your credit, and under 50% will start positively affecting your credit. Keep your balances as low as possible.

– 15% Length of Credit History: The bureaus want to see a long history of credit. If you have to close accounts, choose to keep the old ones open so you don’t lose all that history.

– 10% New Credit: New credit isn’t always a bad thing. Although it does affect your length of credit, it’s another account on your credit that can help improve your scores. Do not apply for a lot of new accounts at one time or your scores will be hit hard.

– 10% Types of Credit: The bureaus want to see a healthy mix of accounts. Have a balance of revolving credit like credit cards and installment loans like auto loans and mortgages.

 

Please do not hesitate to let me know if you have any questions, comments or referrals.

Your Lender for Life,

Lauren

5 Misconceptions about Credit Repair

Great advice on improving credit. Let me know how I can help if you have questions about credit.

Legal Advice

If you’re in the process of repairing your credit score, the way ahead can seem murky, confusing, and nearly impossible to navigate by yourself. There are many misconceptions about credit repair that prevent well intentioned individuals from even trying. Don’t lose hope! While it might require quite a bit of patience on your end, if you are armed with the right information and stick to a well-laid out plan, you will see your credit improve over time.

1. The credit reporting bureaus are out to get you.

Actually, they’re just the proverbial “middle men”. Experian, Equifax, and TransUnion are for-profit agencies that work with creditors to reclaim unpaid money, and track your credit habits. The customer service representatives at these agencies only know what is being reported to them by your various original and/or third-party creditors. While it can be a frustrating process, you are wasting your time and energy…

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How Much of a Down Payment do You Actually Need?

Good information here. You can put down as little as 3.5% as a down payment on a house for a FHA loan and 5% for a conventional loan when buying a house.

the HILTON HEAD LIFE

How Much of a Down Payment do You Actually Need?
Ric Hollifield | 16.July.2014

A recent survey by Zelman & Associates revealed that 38% of those between the ages of 25-29 years old and 42% of those between the ages of 30-34 years old believe that a minimum of 15% is required as a down payment to purchase a home. A recent questionnaire administered by Freddie Mac showed that over 50% of all respondents thought 20% was required as a down payment.

In actuality, a purchaser may be able to put down far less.

Freddie Mac, in a recent blog post addressing the issue, confirmed that there is misinformation regarding the amount necessary when determining the down payment for a home purchase:

“Did you know 40 percent of today’s homebuyers using mortgage financing are making down payments that are less than 10 percent? And how about this: since 2010, the…

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Opting Out of Credit Card Correspondence

I’ve seen opting out of prescreens improve a score from 2 to 20 points. Worth taking a look and opting out for the next 5 years.

Find Your Balance

iStock_000004015725XSmallHave you ever gone through your mail and chucked an unwanted credit card application in the trash? If so, you may have inadvertently created an opportunity for a thief to take over your financial identity. What may seem like a harmless disposal of junk mail could have a wide-ranging and very damaging impact. The good news is that there are some easy steps you can take to give yourself much greater information security.

Why is it so important?
Historically, credit card companies have sent out loads of unsolicited offers via mail with pitches like, “You’ve already been approved!” If you’re an adult with decent credit, chances are you’ve gotten a few of these pieces of correspondence. You may have even taken advantage of one of these offers. That’s not necessarily the problem.

The trouble can arise when someone else is trying to take advantage of these offers on your behalf…

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10 Documents you must have on hand to buy or Sell a home

Good quick guide to what documents you should collect before meeting with your lender.

Homesbyjim Real Estate

10 Documents You Must Round Up to Buy (or Sell) a Home
Home buyers and sellers alike often bristle with anticipatory irritation at the mere thought of all the paperwork they expect they’ll have to come up with to do their transaction, above and beyond the basic loan application, contract, disclosures and closing docs. And these worries start way in advance; it’s as though, before they even start visiting open houses, buyers begin to visualize – and dread – spending hours upon hours in the dank catacombs of the Vatican (à la Da Vinci Code) combing through ancient files, seeking some rare and precious artifact documenting their childhood dental history or genealogy.

In some respects, this vision of the experience of obtaining a home loan might not be far off – there are oodles of hoops through which to jump and, occasionally, the loan underwriter requests something sort of bizarre…

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#Mistakes to Avoid When #SellingHome

Mistakes to Avoid When Selling Home

We all know it ‘s good to be a seller in today’s market, but there’s still mistakes you want to avoid to keep the process smooth. The following are the top 5 most commonly seen mistakes sellers make when putting their house on the market:

  1. Hiring any real estate agent that you come across. The process of selling a home can be a frustrating process. If you don’t have a realtor that knows what they’re doing, stays on top of the process and stays in good communication with you, you’re going to wind up being extremely frustrated and possibly extending your closing date. It’s important that you find people who are going to take care of you and get you through the process as smoothly as possible.
  2. Pricing a home incorrectly. Most people are attached to their home because of the history and memories they’ve created there. But you must look at the home objectively, and understand that what matters most is square footage, # of bedrooms and bathrooms, lot size and condition of house. Your real estate agent should help determine the value of the property by looking at recent sales in your area with similar characteristics. Remember that they are an expert in the field and do this for a living.
  3. Underestimating cleaning up – Buyers cannot see themselves in spaces that are untidy and overcrowded with your personal items. Oversimplify each room and put away everything you can. When there are too many items or pieces of furniture in a room, it appears smaller than it really is and hurts the look of your home. Also make sure to take down all personal photos so the new buyers can see themselves in the home and not just you and your family.
  4. Lingering during showings – Not only do you put extra stress and pressure on your agent, but the possible buyers seeing your home. Buyers are less likely to see themselves in your house if you’re present. If you’re worried about items going missing, lock them up.
  5. Skipping over a home inspection beforehand. Depending on the age of the house, it might be a good idea to get the house inspected before putting it on the market to save time, money and a lot of aggravation. Knowing the age and condition of your house can give you time to fix anything needed instead of allowing the buyer to find these problems and having to re-negotiating the price.

Don’t hesitate to let me know if you have any questions, comments or referrals.

Your Lender for Life,

Lauren