Category Archives: Refinancing

8 Ways to Boost Your Credit Score in the New Year

8 Ways to boost your credit score in 2018Whether you are planning to buy a home in 2018, or are considering refinancing your mortgage, you’ll want to make sure your credit is in tip top shape to get the best interest rate possible. Here are 8 ways to boost your credit score in the New Year to help you reach your financial goals:

  1. Pay your installment loans like car loans and student loans on time every month. Even paying them a day late can wreak havoc on your credit. Pay on time, every time. If you have to be late, call your lender before the payment is due to explain and to see if there are any options to pay later that won’t affect your credit.
  2. Do not close old credit cards. You haven’t used that department store credit card in awhile, but you have a $1,000 credit limit. Closing that card will actually reduce the amount of total credit you have available which can count against you. Keep it open. Just don’t use it, particularly if it carries a high interest rate.
  3. If you don’t have credit, establish it. Not having credit is a problem because you haven’t shown a lender, credit card company or other creditor how you’d handle credit. Apply for a small department store card, a secured credit card, a secured loan or a combination of these accounts to begin establishing credit. Start by charging a small amount and paying it off at the end of each month. Credit history will be based on how timely you pay but also how long you’ve had credit, so this strategy will take time but it is worth it.
  4. It’s OK to pay off loans early. Paying your loans on time is critical, but if you are in a position to make payments early, to add extra money to the principal portion of the payment or pay it off early, you will help your credit.
  5. Review your credit score for free annually. Correct any obvious errors and follow up on items that may not be your, the sooner, the better.
  6. Pay off collection accounts as soon as possible. Have an old dentist bill from three years ago you didn’t pay? This can stay on your credit report for up to seven years, even longer if the original creditor “sells” the debt to another credit agency for collection.
  7. Don’t open a bunch of new accounts at once to increase your amount of available credit. This can lower your average account age. Instead, open accounts as you need them and use them responsibly.
  8. Keep your credit balances low on revolving accounts. Having a lot of debt negatively impacts your credit.

 

Credit Tips to Qualify for a Mortgage

Quick credit tips from Zillow will help you determine if you're ready to apply for a mortgage loan.With mortgage rates at historic lows, it is tempting to buy a new home or refinance right now. But will you qualify? Here are some quick credit tips from Zillow to help you see where you fit in.

– Your credit score should be at 620 or above.

– Your credit cards should carry a balance no more than 30% of your credit limit.

– Lenders look favorably on borrowers who have held the same job for two or more years.

– Your loan-to-value (LTV) ratio should be 80% or less. Loan to value is the ratio of the amount of money you want to borrow versus the actual value of your home. A down payment of 15 to 20% will help lower your LTV.

– If you’re self-employed, be sure to report your Schedule C income.

– Don’t transfer money between bank accounts during the mortgage qualification process. It adds extra documentation to the process.

– Plan to show a lender two years of tax returns and W-2s, bank statements and pay stubs.

Still have questions? Give me a call at 206-391-0388. I can help you or refer you to a local mortgage lender that I know and trust.

 

Additional source:  Lending Tree

 

Knowing Your Home’s Value

Here’s a great article from loan officer Susan Lipston on Knowing Your Home’s Value. Read on for more info. on selling your home, refinancing your home, making home improvements and reassessing your taxes:

Knowing Your Home’s Value

Your home is one of your most important investments and financial assets, but do you know its value? If you hesitate to answer, don’t worry, you’re not alone. Even if you’re not trying to sell right now, there are other reasons that you may want to know your home’s market value. And knowing this number can help you move quickly when it’s time to make a decision about any of the following actions.

Selling your home.

There might come a time when you need to sell your home. You might get offered an out-of-state job opportunity, determine it makes financial sense to downsize, or need to look for a larger home if your family is expanding. If you are ready to buy another home, your current home’s value can narrow down your options for your new purchase, and I can show you the financing options that will be available to you. Knowing your home’s market worth would certainly help you make an informed decision, and put you in a position to more quickly respond.

Refinancing your home.

There are a number of reasons to refinance. For instance, you might be able to finally tap into current low rates, or you might desire better terms. You can find out if you will qualify for a traditional refinancing program or if you may be eligible for the HARP II refinance program, which allows homeowners who owe more than their home is worth to restructure their loans into more stable products with a lower rate. Until you know your home’s value, you won’t know how advantageous or disadvantageous a refinance would be from a financial perspective. I’d be happy to assist you in exploring whether refinancing makes financial sense for your unique situation.

Making home improvements.

While you might have mulled over how home improvements, such as a bathroom makeover, new countertops, or perhaps an addition, could improve your enjoyment of your home and mused at what additional value they might bring, you really don’t know until you’re aware of your home’s value. Check what other homes in your areas have sold for, and pay particularly close attention to any sold properties that had upgrades similar to or the same as yours in relation to those that don’t. Once you get an idea of what your home might sell for, you can see if the upgrades you are considering are worth the expense, or if you might want to go with a more cost-effective option.

Reassessing your taxes.

Your county assessor’s office reviews property values on a periodic basis, and makes adjustments based on a property’s market value. In a down market this can mean much lower property taxes. Being aware of your home’s value can put you in a position to anticipate changes and do some tax and financial planning accordingly. That said, many assessor offices only shift their regular assessments by a maximum amount or percentage of the previous year’s value. However, many states offer an appeal mechanism that can help you push for a lower reassessment to ensure an even more advantageous (and fair) property tax break. But the key is to know your home’s actual value and be able to document it.*

So, how do you determine your home’s value? Your first instinct might be to go to a popular website or download an app for online services that provide estimated real estate values. While these services might offer some instant gratification, they might not take in all the factors and trends that will give you the most accurate estimate of your home’s worth.

Especially if you are considering a move, the best option is to go to a real estate agent that has expertise in your marketplace. An experience professional who is familiar with the properties in your area and has been involved in numerous local transactions will have not only the tools and information but also the context and expertise to get a more accurate read on your home’s true market value. An experienced agent can bring insight into your local market and help you see opportunities that you may not have considered before. This also gives you the opportunity to find a trusted agent that you can work with when it’s time to buy or sell.

Trouble with Mortgage Payments? Read this now!

Despite reports to the contrary, owning a home is STILL the American dream for most folks I know. But it is costly to own a house right now, particularly as home-related costs like fuel, electricity and insurance continue to rise. In combination with unemployment, many homeowners are finding it hard to cover their monthly mortgage payments, risking default and losing their homes to the bank.

Before you reach the default stage on your mortgage, there ARE other options available including a government program created by President Obama. It is called the Make Home Affordable program which offers refinancing and loan modification options to help you stay in your home. To see if there is an option that fits your situation, visit the program’s website for more info.

And, as always, if you have questions, please call me. I will help however I can.

Watch Out For Home Loan Scams!

With low interest rates, a lot of homeowners are considering refinancing their homes or taking out home equity lines of credit to pay for remodeling or other debts. While this can be a good deal for some homeowners, it is important that you watch out for potential lending scams including loan flipping, equity stripping and phantom help. An unscrupulous lender could employ any of these schemes which could cause you to lose your home.

Read more about home equity loan scams here and be aware of required disclosures that went into effect January 1, 2010 (RESPA – Real Estate Settlement Procedures Act). Protect yourself – and your home – by researching the rules and your rights!