Category: Real Estate News

My Credit is a Little Rough. What Should I Do? 

Tips for Raising Your Credit Score

good credit scores just ahead

Welcome back to my blog everyone! The topic I want to dig into this week is credit. Why do you need it? Why is it important? Does it really have an impact on getting approved for a loan or not? Want to see what your credit is currently at for that new home loan? Click here!  I did something a little different with this blog post. I co-wrote this blog with my guy Sam Parker. Let me give you a little insight about my boy Sam. He is the Founder and CEO of MyCreditGuy.com and this guy knows the “ins and outs” of credit. He is my go to guy for a reason and the bottom line is that I only work with the best, and I assure you that is what Sam is. Now, let’s dig into this blog!

b24b8f258b7a59e85250f426c6ab5489a72cdc6d4f77abb05d4101ed65cfd2ec Just like anything in life, if you want to get better at it, you have to practice. If you want that promotion at work, then you have to put in the time and effort. If you want to become a better writer, then you have to practice writing. Same goes with your credit score. If you want to have a credit score that is out of this world good, then you have to put in effort to build and maintain it. Improving your credit score can save you hundreds or thousands of dollars on big purchases throughout your life. The best part about it is that it really isn’t that hard to accomplish. You just have to make sure that you are willing to put in the effort. A word to the wise, get to know the credit scoring model. Each person’s credit profile might be a little different, but there are five basic things that you can do for a little “Spring Cleaning” of your credit report.
Be responsible — Pay all your bills on-time each month. Late pays, collections and bankruptcies all have negative effects on your credit. Be smart, be responsible and make sure all your debts are paid on-time.

Check your credit regularly and monitor it for inaccuracies — Don’t let your credit suffer because of inaccurate information. If there is information on the report that is wrong, contact the creditor or original creditor and have them fix it. If you have a hard time with that, get the credit bureaus involved. Use a monitoring service, such as Credit Karma. Is it the most accurate? No, but it gives you some insight on your credit report without having a negative impact on your score.

ct-credit-scores-0602-biz-20150601Don’t over extend yourself — Just because Capital One gave you a $1,000 credit limit doesn’t mean you should go rack that thing up. Keep your credit card balances below 30% of the limit. For example: $1,000 credit limit = Don’t use more than $300

Time is valuable — The length of time that you have credit impacts your scores. So the longer you have a positive reporting account, with no late payments and a responsible balance, the better your score will be.

Stop having everyone and their mother check your credit — Talk about a red flag. Applying for numerous things in a short period of time can be disastrous for your credit. This is a sign to the credit reporting agencies that you may be experiencing financial difficulties. Too many hard inquiries = knockout punch to your credit scores.

Now, I want to let Sam takeover and blow your mind with these credit tips. Here is a video with some tips on what NOT to do when trying to build or maintain a great credit score.

Sam Parker here, great information Ed. It’s tough to beat the tips you’ve already given but I have just a few more and I’ll expand on a few that you’ve already made!

Don’t Pay Off Collections or Other Negative Item – I know, that just doesn’t make sense. However, the credit scoring algorithm is a bit flawed. See, when you pay off an older negative item it will update that account and bring the activity date current. When that happens, the credit scoring algorithm views this collection as new/current because of the date. In turn your scores will drop BECAUSE you paid your bill. So unless either Ed, one of his staff, or one of our staff instruct you to pay a collection, just hang onto your money for now.

No New Purchases – It’s so tempting to start buying the new furniture and electronics that will make your new home complete. However, too many times people will either use their credit cards to make these purchases OR open a new, in-store, credit card. When you use a credit card it impacts your balance to limit ratios which are a huge factor in your credit scores, you don’t want to use credit cards at all during the home loan process and if anything, get them paid down as much as possible. Also, when you open a new account the credit scoring algorithm sees it as a risk. You will most certainly see a drop in your credit scores not only because of the new debt load but because you just introduced a new account to the mix. This should go without saying but do not buy a new vehicle during the mortgage process either.

Don’t Close Accounts – As many people are getting their financial house in order they think it’s time to pay off and close out as many accounts as possible. While we advocate paying accounts down, closing them will be eliminate ALL of the pay history that you’ve accumulated and you’ll definitely see a drop in credit scores.

 

I appreciate everyone checking out the new blog, and Sam I appreciate you taking the time to co-write this with me. As always if you have any questions feel free to reach out to me. I am also including Sam’s contact information below. If you have any credit questions, he is the guy to contact. Thanks again and don’t forget to SHARE this with your friends and family, give us some FACEBOOK love!!!

Hustle. Succeed. Repeat.

-Ed Stojancevich

screen-shot-2016-10-06-at-5-46-03-pm  Download Ed’s Mortgage App, Click Here!

-Sam Parker

MyCreditGuy  Download Sam’s FREE Credit App, Click Here

This information is for educational purposes only and does not constitute legal or financial advice. You should always seek the advice of a legal or financial professional before making any legal or financial decisions.

I am going home shopping without getting pre-qualified or pre-approved.

Hey what’s going on everyone! Welcome back to my blog and boy do I have some good stuff for you. Now let’s dive in!batman

If you haven’t caught the sarcasm in my headline, let me start by saying I am being EXTREMELY sarcastic. Going to look for a home before getting qualified is a horrible thing to do. It makes as much sense as trying to keep a popsicle cold with a blow dryer, IT JUST DOESN’T WORK! Now let me tell you why, let me give you the 411 on why this is frowned upon.

In more markets, the consensus is that there are more buyers than available homes for sale. This means there is more competition out there when looking for your “perfect home.” Sellers won’t even entertain your offer unless you are pre-qualified to buy. If you get into a bidding war with another buyer and your competition has already done the footwork to make sure they qualify, you can bet your bottom dollar you are going to lose the bidding war. Check out this link by Freddie Mac on why getting pre-qualified/pre-approved is important if you’re a serious home buyer. Also, when going through this process, make sure you are using a local professional. I know this may not seem important right now, but ask any Realtor in the area and they will tell you nightmares about using out-of-state lenders or those on-line lenders, if you think getting a mortgage is as simple as pushing a button, you’re wrong. Many of these “television or on-line lenders” are making it seem like it is that easy. Don’t let them fool you. If you are prepared and know what you and your family are looking for, the process can be very simple if you’re working with the right lender.first-time_mortgage_header

Another big thing is knowing your budget. I talk to hundreds of people every month and one of the most common things that I hear is, “I need to know how much I qualify for.” This is one of the biggest mistakes you can make as a buyer. You need to figure out what is going to be a comfortable monthly payment and what a comfortable down payment will be. As a well-respected lender in my area, I make sure to ask those two questions. The last thing that I want to do is qualify someone for a $300k home if they’re only comfortable spending $200k. I put people in loan programs that are going to be advantageous to their entire family. The last thing I ever want is a family to struggle to make their mortgage payment. There is no need to “Keep Up with the Joneses,” maintain a good family budget and make sure you save for any unexpected expenses.

screen-shot-2017-01-17-at-12-50-28-pmGetting pre-qualified to buy a home is important, we’ve established that. I want to show you what lenders look at when you give them your information. As Freddie Mac explains, there are 4 C’s in the mortgage process.

  1. Capacity: This looks at your ability to repay the loan. A lender will look at your ability and future ability to pay your debt payments and pay them on-time.
  2. Capital/Cash Reserves: This looks at the amount of verifiable money that you have saved in the bank or investments that can be sold for cash.
  3. Collateral: This refers to the property that you are buying.
  4. Credit: This looks at your credit history, score and the history of paying your bills on-time.

When a lender looks at these 4 things, this will help them determine if they can lend you the money to purchase the home. In many cases, you will only know 3 of these before you start your home search because the collateral hasn’t been identified yet. Capacity, Capital and Credit are enough for a lender to decide if you qualify. Click here to see a list of items a lender will typically require to see if you qualify.

screen-shot-2017-01-17-at-12-51-10-pmIf the down payment is an issue, there are different ways we can address that. You can get gifts from immediate family members and you could also see if you qualify for down payment grants or 100% financing programs. Click here to see what you qualify for. If you are ever unsure about credit score, down payment or anything else related to buying a home, contact your local pro and have them guide you through the process, click here. They do this every day and know exactly how to help you get into the home of your dreams.

Always remember, you want to look amazing to your sellers. You want to make sure you are FULLY prepared and ready to write a good aggressive offer on the home you want. In some cases, you may not get a second chance or the opportunity to make a counter offer.

funny-real-estateI want to leave you with one last thing. Make sure you are being represented by a Realtor when buying a home. This does NOT cost you anything. The best parts about buying a home with a Realtor is that they are working for you, they negotiate the best possible terms when buying a home, they get PAID FOR BY THE SELLERS and they are a great resource for local market conditions if/when you ever decide to sell your home in the future. Click here and I can get you setup with the areas TOP REALTORS if you need a good recommendation.

Thanks for reading, please share this with your family, friends, enemies, the neighbor across the street or the person you bumped into at the grocery store. Anyone will be able to benefit from this article.

Download my FREE Smartphone app by clicking here or text FREEAPP to 44222 and get a link sent to your phone.

See you all the next time!

-Ed

www.TheRockstarCloser.com

You are not a real estate expert just because you watch HGTV.

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Welcome back everyone to my blog. This week I want to talk about something important, especially with the growing popularity of HGTV and those trendy shows like “Property Brothers,” “Flip or Flop,” or “Fixer Upper.” These shows are great to see the process of where a home is and what it can be after a bunch of remodeling and renovation. The downside of these programs is the fact that they make the whole process seem easy. Another thing to remember is that they are cramming anywhere from 8-12 weeks’ worth of work into a 30-minute episode. Don’t be naive and think that this process is easy. Remember, this is ENTERTAINMENT not real-life. Check out this article from Fox News about the stars of “Flip or Flop.” It looks like they’re catching some heat for offering classes that making the home flipping process easy. You can check out the article here.

flip-or-flopI had a few clients this year that told their realtor, “I watch those shows on television, so I know how the negotiation process works.” This is such a huge mistake. First, let me just tell you that when you are buying a home and you hire a realtor, you do not pay that realtor. The best part about it is that they work for you but get paid by the seller. It is literally a win/win situation. They’re negotiating the best possible deal for you and get paid by the seller. This is literally having your cake and eating it too. Another misconception is that people can buy a $50k house and put in $50k worth of renovation and then have a home that is worth $500k. These shows are often filmed in different areas of the country which have a higher cost of living, therefore the prices of these homes are a lot higher than the local market.

If you are looking at buying a home that needs a lot of work, this is what I recommend. Make sure that the home is in decent shape. What I mean by that, is make sure there are no major defects in the home. When obtaining a mortgage, a home must be appraised. Even if you are putting down a substantial down payment, the home still needs to be in acceptable condition. At the end of the day, the home is the collateral for the loan, so the home must be in acceptable condition to the lender. Another thing to remember is that you need to have the renovation money saved up. Not all lenders offer renovation loans, and if they do, the work and renovations must be completed by an approved contractor. Most people don’t realize this and they think that they can do the work themselves and build some “sweat equity.”fixer-upper

Here is what you should do when looking to buy a “fixer-upper.” Do your research and make sure you hire the right realtor to help you find a property that fits your need. (If you need help with this click here and I can put you in contact with some of the area’s best realtors.) Make sure that you have enough money saved up, not only for down payment, but for the renovations as well. Having a realtor with experience in this will help you as well because they can give you advice on roughly how much of a renovation budget you should have. Make sure you are in contact with the right lender so they can give you advice on properties that you are looking at as well. Remember, the realtor and lender are on YOUR team, we want to make sure that this goes as smooth as possible for you.

As always thanks for viewing my blog. Download my free Smartphone app. Text “FreeApp” to 44222 and get a direct link to your phone.

-Ed

NAHB Releases New Home Building Employment Estimates by State and Congressional District — Eye On Housing

The new NAHB study presents the most recent and comprehensive estimates of home building employment, including self-employed workers, by state and congressional district. NAHB Economics estimates that out of 9.6 million people working in construction in 2015, close to 3.8 million people worked in residential construction, accounting for 2.5% of the US employed civilian labor…

via NAHB Releases New Home Building Employment Estimates by State and Congressional District — Eye On Housing

The Real Problem With the Wrong Price — Dream Blue Blog

They say that buying a house may be the largest investment you will ever make. Therefore selling your house can also be the biggest reward. The key is making sure the house isn’t priced wrong. The National Association of Realtors stated that median home prices are expected to increase 4.1% from 2015 levels. What this means is that your…

via The Real Problem With the Wrong Price — Dream Blue Blog

I can afford the home, but I can’t afford the entire down payment. What should I do?

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Little down payment does not mean they are an unqualified buyer

Welcome back everyone! This week I want to discuss something that comes up quite frequently in my line of work. I hear it constantly from 1st time home buyers. They have a good job, they pay their bills on time, but with the cost of living it is becoming hard for them to save up money for the down payment on a home. Another huge misconception is that buyers think that they need to put down 20% for a down payment, this is far from true. Most programs require anywhere from a 3%-5% down payment in order to obtain a home, but what if you don’t have that? I have some solutions for that very problem, there are options available to assist you with down payment. Some  people I talk to have some money saved up, but not the full amount needed for the down payment. Now, this doesn’t mean you cannot get financed for a mortgage. There are some options that can help you out with down payment, let’s go over a few of those below.

VA Financing (Current & Active U.S. Military)

This program is strictly for United States military, both current and former, and surviving spouses of US veterans. This programs allows the veteran to finance up to 100% of the purchase price of the home. This is a program that veterans have earned, yet many veterans are unaware of this program. This is a great program for them and a great program for the sellers. Veterans are able to take advantage of low-interest rates and avoid mortgage insurance on their new mortgage. Click here to see if you qualify for a VA Home Loan.

 

IHCDA (This is for Indiana only)

HELPING TO OWN (H2O)

  • First-time homebuyers only, unless purchasing in a Targeted area
  • FHA 30-Year fixed loans only
  • 100% financing
  • Down Payment Assistance (DPA) grant of 3.5%, does not have to be re-paid
  • Program Income limits Apply (Click here to see if you qualify)
  • Minimum credit score of 660
  • Reservation fee $100

MORTGAGE CREDIT CERTIFICATE (MCC)

  • First time home buyer unless purchasing in a targeted area (see Program Guide for targeted areas)
  • Income and Acquisition limits apply
  • 30 year fixed rate (lender sets rate)
  • Federal Tax benefit
  • FHA, Conv, VA or USDA Rural Housing financing eligible
  • Reservation fee $500

NEXT HOME (NH)

  • Does not have to be a first time home buyer
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score of 660 for FHA or minimum of 680 for Conv
  • FHA or Conv financing eligible
  • 2 year affordability period
  • DPA – 3.5% of purchase price or appraised value, whichever is less for FHA or 3% of purchase price or appraised value, whichever is less for Conventional
  • No cash back at closing except for what the Mortgagor paid into the loan
  • Reservation fee $100

NEXT HOME WITH MORTGAGE CREDIT CERTIFICATE (NH/MCC)

  • First time home buyer unless purchasing in a targeted area (see Program Guide for targeted areas)
  • Income and Acquisition limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score of 660 for FHA or minimum of 680 for Conventional
  • Federal Tax benefit
  • FHA or Conventional financing eligible
  • 2 year affordability period
  • DPA – 3.5% of purchase price or appraised value, whichever is less for FHA or 3% of purchase price or appraised value, whichever is less for Conv
  • No cash back at closing except for what the Mortgagor paid into the loan
  • Reservation fee $100

AFFORDABLE HOME (AH)

  • First time home buyer unless purchasing in a targeted area (see Program Guide for targeted areas)
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score 660
  • FHA financing eligible
  • Reservation fee $100

MY HOME (MH)

  • Does not have to be a first time home buyer
  • Income limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score 660 for loans having LTVs equal to or less than 95%. LTVs greater than 95% the credit score that is required may vary 
  • Conv financing eligible
  • Master Servicer must underwrite all loans having LTVs greater than 95%
  • Reservation fee $100

MY HOME WITH MORTGAGE CREDIT CERTIFICATE (MH/MCC)

  • First time home buyer unless purchasing in a targeted area (see Program Guide for targeted areas)
  • Income and Acquisition limits apply
  • 30 year fixed rate (set by IHCDA)
  • Minimum credit score 660 for loans having LTVs equal to or less than 95%. LTVs greater than 95% the credit score that is required may vary 
  • Federal Tax benefit
  • Conv financing eligible
  • Master Servicer must underwrite all loans having LTVs greater than 95%
  • Reservation fee $100

These programs do have income limitations, click here to see if you qualify for these programs.

IHDA (This is Illinois only)

1ST HOME ILLINOIS

  • If you are interested in buying a home in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will or Winnebago counties, 1ST Home Illinois is the product for you.  It combines a 30-year fixed rate mortgage with a $7,500 down payment assistance grant. 1ST Home Illinois  is tailored for first-time homebuyers, veterans, or anyone who hasn’t owned a home in the last three years.

@HOMEILLINOIS FIRST-TIME BUYER

The @HomeIllinois mortgage is a safe, 30-year, fixed rate mortgage. That means your interest rate will never change. Are you concerned about saving for the down payment? With @HomeIllinois, the buyer contribution is $1,000 or 1 percent of the purchase price, whichever is greater. So for as little as $1,000 out-of-pocket, you can get into your first home. @HomeIllinois is a 30-year fixed rate mortgage with a variety of options to choose from. The options you choose will determine the interest rate for your loan.

Options:

  • $5,000 down payment or closing cost assistance
  • Federal tax credit certificate
  • Lender paid mortgage insurance
  • Choice of FHA, VA, USDA or Conventional loan type

Requirements:

  • Contribute $1,000 or 1 percent of the purchase price, whichever is greater
  • Meet the income and purchase price limits
  • Meet the credit requirements
  • Live in the home as your primary residence
  • Complete homeownership counseling (online and in-person options available)

@HOMEILLINOIS REPEAT BUYER

Are you looking to upgrade, downsize or simply change zip codes? The @HomeIllinois mortgage is the mortgage for you. For the first time ever, IHDA is offering $5,000 in down payment or closing cost assistance to repeat buyers. With interest rates at historical lows, there’s no better time to buy your next home than now.The @HomeIllinois mortgage is a safe, 30-year, fixed rate mortgage. That means your interest rate will never change. Are you concerned about saving for the down payment? With @HomeIllinois, the buyer contribution is $1,000 or 1 percent of the purchase price, whichever is greater. So for as little as $1,000 out-of-pocket, you can get into your next home.

@HomeIllinois is a 30-year fixed rate mortgage with a variety of options to choose from. The options you choose will determine the interest rate for your loan.

Options:

  • $5,000 down payment or closing cost assistance
  • Lender paid mortgage insurance
  • Choice of FHA, VA, USDA or Conventional loan type

Requirements:

  • Contribute $1,000 or 1 percent of the purchase price, whichever is greater
  • Meet the income and purchase price limits
  • Meet the credit requirements
  • Live in the home as your primary residence
  • Complete homeownership counseling (online and in-person options available)

USDA Financing

USDA Mortgages are a great option for people who are looking to buy in rural areas. Buyers need to be able to meet certain income qualification and they also need to meet certain credit score qualifications as well. USDA is an option which allows for 100% financing on a property. Properties also have to be in eligible USDA areas in order to obtain a USDA mortgage. Click here to see if you or a property qualifies for USDA financing.

HUD (U.S. Department of Housing & Urban Development) Homes

When someone who has an FHA Mortgage on their property and they foreclose on that property, it then becomes a HUD Home. You can get a solid deal on these homes when  they are available, but be aware sometimes they will need some work. The benefit of buying a HUD Home is that you can typically get a great deal on your home and you can buy the home with as little as $100 down. That’s right, $100 down payment. The great thing about HUD Homes is that they give people who plan to buy this as their primary residence first dibs at bidding on them. This means that investors have to wait until primary residence homebuyers get an opportunity to make an offer on the property. Good deals get picked up quick, so if you find a nice HUD Home, make an offer quickly. Click here and I can put you in contact with someone who is experienced in HUD Homes.

Local County and City Down Payment Programs

There are local counties and cities across the state that offer incentives for buyers to move to their areas. Typically there are offered through their economic development departments. These grants can help you with down payment assistance and also help you with closing costs. There are entirely too many to list, so to see if you qualify for any of these programs, click here. 

I put some extra useful information into this week’s post. This will help you and possibly save you some money while buying your home. Don’t forget to subscribe to my blog, and I also left you with something that is absolutely FREE. It will help you with your home buying process and answer all of the initial questions that you have. All you have to do is click the image below, it’s that simple. You’ll get immediate access to my free home buyer’s guide.

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Thanks again everyone!

-Ed

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Why should I refinance? Is it really worth it?

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Welcome back to my blog. This week we’re going to talk about refinancing. This has been a HUGE topic here lately, especially with the current rate drops caused by Brexit. Surprisingly, there are millions of homeowners that still have not taken advantage of lower interest rates and are still paying too much on their home. CNBC even wrote an article about this. So why would someone want to refinance? There are a quite a few reasons you would want to do so, now let’s talk about them.

  1. o-SAVE-MONEY-facebookRefinance to pay down your credit card or other debt. People typically look into doing this because of the variable and high interest rates that credit cards carry on them. Most people only pay the minimum balances on their credit cards, if you read the fine print it will tell you how many years it would take to pay it off. By doing a cash-out refinance, you can lower your over all monthly debt obligation and free up money every month. You could also use the savings to pay the mortgage off faster.
  2. lower-interest-rate-on-credit-cardsLowering your interest rate. When you bought your home, interest rates may have been higher than what they currently are. With that being said, homeowners will look into lowering their interest rate because lowering their rate can mean savings on your monthly mortgage payment.
  3. Cutting your mortgage term and payiMortgage_Payoff_Tipsng it off sooner. This is good way to cut the length of time you have a mortgage and could also lower your interest rate. You could refinance from a 30-year loan down to a 15-year loan and have your mortgage paid off in half the time. Paying off your mortgage in half the time could put you in line with any future plans that you have such as retirement or even saving for your children’s education costs.
  4. Refinancing to change from an adjustable rate mortgage (ARM) to a more featured-image12secure fixed rate mortgage. If you opted for an ARM when you purchased your home and now want a fixed rate, then refinancing is something you should do. Luckily, with rates as low as they are, you can secure a low-interest rate on a fixed rate mortgage.
  5. Refinancing to do some home improvements around the house. 6-top-home-improvement-projectsHomeowners may want to access some of their equity in their home in order to do some home improvements. Certain home improvements can be quite expensive and accessing the equity in your home would the perfect opportunity to be able to complete your home makeover.

These are just a few reasons that homeowners refinance, each situation is different and you may have a different reason to refinance. So this what I recommend, get together with your mortgage professional (Click here for the best one in the business) and let them know exactly what you want to accomplish with your refinance. Make a list of goals that you have and share that with them. The more information you provide, the more helpful we can be. Once this is done, make sure you get locked in to a low rate and make sure you get them what they need in order to complete the refinance.

Stay up to date on all my new blogs and up to date real estate info by subscribing here.

Download my FREE mobile app for your phone, just click here!

Thanks again and have an amazing week!

-Ed