Tag: house

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.

Closing Costs? Why Pay Them? Who Pays Them? I Don’t Like It

wasting-moneySome of the most common phrases that I hear when talking with buyers are, “What are closing costs? Who pays them? Why are there closing costs?” A very common misconception is that closing costs are the fees that lenders make on the purchase or refinance of a property. Many clients believe this as fact, that is until I enlighten them and let them know exactly where those costs go to and why they are required. So, what do you know about closing costs? Is this something that you believed as well?

Closing costs are a mixture of different fees associated with closing on a mortgage. These can include, but are not limited to, appraisal, application, underwriting, title, escrow, insurance, and other items within the loan process. The reason that there are fees associated with the loan is because there are costs associated with obtaining a mortgage. These costs are here to help you out. For example; an appraisal is necessary because you and the lender need to know the value of the new home. At the bare minimum, the appraisal should appraise at what you are buying it for, or more. If not, then you have the opportunity to renegotiate the purchase price. Title fees are to make sure that you are buying a home with no liens and you are getting it with a clean title.

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Now, there are lenders out there with some high closing costs, such as origination points, discount points or broker fees. I actually spoke with a client about a month ago, and they knew a lender and planned on going through with them. After speaking with them, I was half percent lower in rate and about $3,000 lower in closing costs. I couldn’t believe how much they were charging for their services. I guess that is the downside of doing business with companies that have astronomical marketing costs, those costs get carried over directly to the consumer and you’ll notice that with the rate and costs associated with the loan. Check out this article from Money Magazine on what closing costs average.

Now there are ways to offset some or all of the closing costs. A simple way to do this is to negotiate the closing costs to be paid for by the seller. Most cases, the sellers will pick up the cost of obtaining the financing. You can also choose to have your costs paid for by the lender, in order for this to happen, you will receive a interest rate that is higher than the current market rate. Basically, you are financing the costs into the loan for however long the term of the loan is.  Another way to do so is to pay them yourself, this is the most ideal if you have the funds to do so. Paying your closing costs upfront is the most simplistic and cost effective way to pay for these. If you pay them upfront, you don’t have to worry about financing them into the loan by taking a higher than market interest rate.

So here is what I recommend. Talk to a pro, such as myself (you like that marketing plug right?) and figure out what is going to be the best path for your financial situation. You want to speak with someone who is going to achieve both your short term and long term goals. I recommend you download my FREE mortgage app for your cell phone and stay up to date on all market trends and interest rate trends. You can do so by clicking here. You can contact me anytime via my website at www.TheRockstarCloser.com or you can always call/text me at 219-973-6644. I will make sure to help you and give you the options that you deserve in order to make the best decision for you and your family.

Please fill out this form below, I’d like to know more about my readers. As always thank you for reading my blog, be on the lookout for next week’s blog post!

-Ed

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Do NOT do this when applying for a home loan…seriously.

Looks like I am going to give you a two for one in blog posts this week. I know I did one yesterday, but since I have fallen behind, I have to make up the difference. So with that said welcome to my blog. I want to inform you about something that can absolutely destroy your chances of getting a loan, even if your loan has already been approved but you  haven’t closed yet. Most people think that once their loan is CTC (mortgage jargon for Clear-to-Close) they are open to do whatever they want. Wrong! Most knowledgable lenders will tell you up front, do not make any purchases, do not apply for any new credit, do not make any late payments and make sure everything that you have disclosed to us remains the same or gets better. Nothing, and I mean nothing will make us give you the Bernie Sanders stink eye faster than seeing a new debt show up on the credit report. Now let me tell you why.

When we take a look at your overall credit profile such as income, assets, credit history, job history, debt ratios, ect. We have to make sure it fits “inside the box,” because let’s face it, this isn’t the mortgage industry of 10+ years ago. We have to make sure that everything is well documented. Now once we do that and we issue a pre-approval or pre-qualification, you are all set to go find your new home. In the meantime, make sure you do the following:

  1. Continue to pay your bills on-time
  2. Do not deposit cash in the bank
  3. Do not charge up your credit cards
  4. Do not apply for new credit or request credit line increases
  5. Do not spend your down payment on anything besides your down payment
  6. If you are unsure about anything, contact your mortgage expert

These may sound like simple rules to follow, but you would be surprised. Doing any of these can seriously impact your loan approval and could prevent you from purchasing your brand new home. The reason being is that it can negatively impact your credit score and can drive up your DTI (mortgage jargon for debt-to-income) ratios which could prevent you from getting the loan. So while you’re out looking at homes and when you get under contract, make sure you have a good talk with your mortgage expert and they can help you a guide you throughout the way. Consistency is the key. Maintain your current credit and financial profile and your loan should get approved with little to no problems.

So you want to stay up to date on all of this information? Want access to interest rate trends, home searches, calculators and a bunch of other useful stuff? Then you need to download my free mortgage app. It is 100% free and you have access to all of my info, including this amazing blog, 24/7. All you have to do is click here and it will direct you to the download link. C’mon, you didn’t think I’d give you an awesome blog and not ask you to do me a solid now did you? As always, thank you for viewing my blog. Check out my app and your life will become 10,000% better (well maybe not, but it’s a free app, so it can’t hurt right?).

Be on the lookout next week for some new info and a new blog. Leave me your feedback below if there is anything else you want me to focus on for future blogs.

Ed S.

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Housing Shortage Causing Bidding Wars and Spike in New Construction.

BIDDING WAR

If there is one downside to a booming housing market, it’s that there are not enough homes on the market to satisfy the amount of buyers. You can refer to this as a seller’s market. Not enough homes on the market can mean buyers paying more for a home. This is not a bad thing, and in fact, can help home values. As a seller, take advantage of it. Quit listening to the “water cooler talk” at work when everyone thinks that they’re an expert at everything. There is a reason they are doing the job that they are doing and not selling homes, because they don’t have the slightest clue of what they are talking about! Check out this article from Realtor.com that gives you advice on how to win a bidding war.

So let’s get back at it. In the real estate market you will see peaks and valleys. It is the nature of the business. If you are considering selling your home, now is the time to get your home on the market. Demand is high and supply is low, this is bare basic economics and it doesn’t take rocket science to figure out that you will profit more than you would in  a buyer’s market. Well what happens if you are a buyer? You want a great deal, right? You want that amazing home that your family fell in love with, right? Then make an offer. Hire one of the areas Realtors (I can refer you to one if you don’t have one) and let them negotiate a great deal. In this business time is of the essence, so if you find something and you like it, then make an offer on the home. One of the common things that I hear buyers say often is that “I’m going to sleep on it and make an offer tomorrow.” Here’s the catch to that, someone else is thinking the same thing and by the time you are ready to submit an offer, the house is S-O-L-D and then they have regrets for not submitting an offer earlier.

Home builders are more than happy right now. What happens when people can’t find their perfect home? They build it. I was driving through Northwest Indiana the past few weeks and I have noticed a TON of new homes being constructed. It’s a good thing, but with the improved housing market comes higher price per square foot. You’ll be paying more for that home as well. Now, don’t get me wrong, building a new home isn’t a bad thing. You just have to be prepared to wait while it is being constructed. I have seen homes go up in as little as 90 days, then I have seen homes take a year. It all depends on what you are getting done, what kind of upgrades you’re getting and also the weather has to cooperate as well.

Why am I telling you this? I know what you’re thinking, “he is just trying to get us to buy a home quicker, or wants the quick sale.” That couldn’t be further from the truth. I have a list of buyers right now waiting to find their next home. Unfortunately, some of them have already made these same mistakes that I mentioned above and have missed out on homes that they fell in love with. I don’t want this to happen to you. Learn from the mistakes of others. So here is what I recommend:

  1. Get your ducks in a row (get pre-approved and get all of your financial documents together) Check out my blog about this here.
  2. Work with a Realtor and figure out where you want to buy and what is a comfortable price range.
  3. Once you find a home that you love, DON’T WAIT! Talk with your Realtor and submit a fair offer on the home.
  4. Get your offer accepted
  5. Work with the best mortgage guy in the business (me, of course!) and let’s turn that homeownership dream into a reality.

So now that you have some great tips about this market. I am going to ask you a favor. I need you to subscribe to my blog. I know I said I was going to do these weekly, but work has been SLAMMED. I owe it to you all to make this blog happen weekly, so my commitment to you is to have a new blog up by Wednesday of every week. In the mean time, go and download my mobile app. It has a link to my blog, a home search, mortgage calculators and so much more. You can get it by clicking here. I designed this app for my business partners and for my clients. Any feedback that you have, leave it below. Have any blog suggestions? Leave me a comment below. I will give you content overload, just let me know if you want me to touch on anything specific.

Thanks for reading and  the lookout next week!

-Ed. S

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Changes in Mortgage Guidelines

Indiana Home Loans

Indiana Home Loans

So if you are in the market to either purchase a home or refinance your current home, you need to be aware of some of the new changes that will be rolling out come January 10th 2014. The CFPB (Consumer Finance Protection Bureau) put together new regulations regarding mortgage lending. Home mortgages will have to pass a series of tests in order to ensure they are a qualified home loan. Loans can not exceed 30 year term, the APR cannot exceed 1.5% more than the annual prime offer rate, there cannot be negative amortization, and points and fees cannot exceed 3% of the loan balance in order for these to fall within the qualified mortgage guidelines and will fall under safe harbor which prevents the borrower from suing the mortgage company because they can not pay the loan back.

Lenders will also have to  perform a series of verification for ATR (Ability to Repay). The ability to repay consists of a series of requirements that have to be met by the borrower and verified by the lender, including but not limited to income and debt levels. There are 8 different factors that Lenders must look at before issuing a mortgage.

  1. Current or reasonably expected income or assets (other than the value of the property that secures the loan) that the consumer will rely on to repay the loan
  2. Current employment status (if you rely on employment income when assessing the consumer’s ability to repay)
  3. Monthly mortgage payment for this loan. You calculate this using the introductory or fully indexed rate, whichever is higher, and monthly, fully amortizing payments that are substantially equal
  4. Monthly payment on any simultaneous loans secured by the same property
  5. Monthly payments for property taxes and insurance that you require the consumer to buy, and certain other costs related to the property such as homeowners association fees or ground rent
  6. Debts, alimony, and child support Obligations
  7. Monthly debt-to-income ratio or residual income, that you calculated using the total of all of the mortgage and non-mortgage obligations listed above, as a ratio of gross monthly income
  8. Credit history

Along with some of the above factors listed, the maximum debt-to-income ratios have been lowered as well which can lower the purchase power of potential homeowners. For more information or for any further questions you can always contact me, I’ll be glad to answer anything that you have for me. Thanks for reading!

 

If you’ve considered listing your home, now is the time to do so.

The first thing I looked at when I opened up my web browser this morning was an article by The Wall Street Journal writer Ruth Simon and The headline was “Is It Safe To Sell Your House Now?”  Now I have talked to numerous area realtors and I have had transactions on homes that had numerous offers on them, many of them full asking price, but the same issue is still coming up “we need more listings” is a common phrase among the areas realtors. The trend right now is that there are more buyers in the market than homes for sale, which in turn make it a seller’s market. some of the realtors that I have talked to said they are selling their listings faster than they can get more, which believe me is not a bad thing, but at the same point in time is making it a market for buyers to be more aggressive with their offers.

If at any point within the past couple of years you have been considering on selling your home, now may be the time to do so. Now may be the time to list your property so you can move, upgrade, or get into a different home that better fits your needs. This could be a great opportunity to increase the odds of you getting full asking price when listing your home. Here are a couple of tips I recommend doing if you plan on listing your home.

  • Contact a local realtor, or contact me if you need a great recommendation
  • Get a CMA (Certified Market Analysis) or BPO (Broker’s Price Opinion) done on your home, this will give you an idea of what to list the house at.
  • Do some early “Spring Cleaning” take away all the clutter, change the light bulbs, and take down any family pictures you have. You want for potential buyers to envision themselves living in your home, the family pictures could be a distraction from that.
  • Fresh coats of paint, clean the floors, and shampoo the carpets. You want your house looking as lean and clutter free as possible.

For more tips on what you should do to help sell your home fast please go to my contact page and leave me your information and I will send you a complimentary copy of “33 Ways to Sell Your Home Fast”

Thank you for viewing my blog, please write me with any questions, feedback, or if I can help you in any way. Don’t forget to subscribe!