Your credit score and the Factors that influence it

Understanding the makeup of your credit score is the first step toward managing and improving it.

As you might expect, payment history is the most influential component in your credit score, followed closely by the amounts you owe.  To lesser degrees, the length of time you’ve utilized credit, the number of new accounts or inquires you have, and the various types of credit accounts you hold also impact your score.  Overall reporting also looks at how these factors relate to each other in the context of your personal usage.

To help achieve or maintain a health score, always remember the following:

  • Have a system to assure your bills are always paid on time.
  • Avoid late payments or the excessive use of credit by maintaining a cash “cushion” to pay for unexpected expenses.
  • Don’t “max out” your cards. It’s better to have a high credit limit with a low balance.
  • Never close old accounts as the age of these can actually help your score.
  • If you shop for credit, do so in the shortest time period possible to minimize inquires counted against you.
  • Don’t be afraid to use credit. You need several accounts in order to have a credit score.  Just be sure to keep corresponding payments within your means.

If you have established credit, don’t open new accounts solely for the sake of earning a discount on a new purchase.  In the long run, you may spend more than you save up front by paying higher interest rates due to a lower score.  Having more accounts also increases the task of making payments and the possibility of missing one.

Let us know if we can help you find the right people to talk to in the Mortgage industry.  We know who is the best of the best and wouldn’t steer you in the wrong direction.

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If You Really Love the House, Don’t Lose the Bid

In the housing market, the best deal doesn’t always come with the lowest price.

Price vs. Payments – If you’re financing your purchase, you’ll probably never come close to paying the actual price.  You’re making a comparatively small down payment and then paying interest on the loan until you refinance or sell.  Yes, you will have a higher payment if you pay more for the home, but an extra $10,000 of mortgage money can add less than $50 per month on a low-rate, 30-year loan.

Relative Prices – Our natural tendency to pay as little as possible is not as meaningful for an investment, such as a home, as it is for a consumable.  In this case, what you pay now can affect your sales price later.  There may be little difference in total earnings if you pay less and sell for less or pay more and sell for more.

Influencing Value – For appraisers, the last sale or “comp” in an area sets the value for similar homes.  Whatever you pay helps to establish what your home and comparable properties are considered to be worth.

Setting the Trend – If you pay less for your home than was paid for the last similar home, you may be contributing to a downward price trend, which can be difficult to reverse.  Conversely, helping to maintain a trend of price appreciation can end up paying you back many times over.

One Chance – No two homes are ever exactly the same.  Even when structure matches, your land, your view, your address and your immediate neighbors will always be different.  You truly may have only one chance at just the right house.  Industry professionals have all seen buyers lose once out on what they really wanted.  We don’t want that to happen to you.  Nor do we want you to pay more tomorrow for something less than what you could have had today as a result of increasing prices and rates.

Before you think about the bid, think about your pre-approval you’ll need to begin.  We’ve got great names in the Mortgage industry and can help you to connect to the right people to get things started.  Give us a call or email to see how we can help you head in the right direction towards owning your home.  It’s what we do best, and would love to walk that process with you!

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If You Can Afford To Rent…

You Can Probably Afford to Own.

Interest rates are near historic lows

Purchasing power has increased, and the cost of renting in many areas is now greater than the cost to buy.  Some say mortgage loans are impossible to obtain without perfect credit and 20% down.  Want the truth? Read on, and we’ll cite the three basic factors for qualifying for a home loan.

Income

If you have a job or steady source of income, you’re off to a great start.  If you’re already able to pay your rent on time each month, this could actually be easier than you might think.

Assets

You rarely need a 20% down payment.  In reality there are many programs that will work with 5%, 3.5%, and in some cases, even 0% down.  As well, closing costs can sometimes be paid by lenders, sellers or come from gifts or grants.  So if you think you’re out of luck just because you don’t have tons of cash, no worries.  Chances are still good there’s a solution that may work.

Credit

If you pay your bills on time and have avoided major issues like bankruptcy, foreclosure, short sales and judgments, it’s likely your credit is in good shape.  Requirements will always vary, but there can still be reasonably flexible loan options, such as the FHA loan guarantee programs.

That’s it.

These three items are the fundamentals of mortgage lending.  Exceptions will exist, but don’t be fooled into thinking the process is impossible.  For those who work and pay their bills, there may not be a whole lot standing in the way of home ownership.

Contact us today to see how we can help you navigate these waters of home ownership. We bring experience and finesse to the table, and would love to help make this process as easy as possible so you can stay focused on the fun parts!

 

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Selling Your Home on Your Own?

I’m not out to knock FSBO’s.  More power to you, if you are the ambitious type and can pull it off without pulling your hair out.  On the flip side, if you’re not sure selling your home on your own is the right move for you (and you’d like to keep your hair), call or email me and I’ll give you my free/ no hassle, professional advice and then you can decide for yourself.

Have you heard about our MVP Program yet? 

It’s the place where I can shower you all with monthly gift offerings and exclusive offers to really show my appreciation for your referrals and the support of my real estate business!  For more information on this awesome and innovative program, go to www.lizkeepsitreal.com/mvp/

If you’d like to be added to the MVP program, email my assistant and she’ll add you right away sarah@thelizjohnsongroup.com

Thank you for all your recent referrals!

Because of our new MVP program, we have launched several of you into ALL STAR status and we hope you are enjoying your FREE Starbucks coffees month after month!  Keep up the good work so I can keep up the good work!

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Move in ready with tasteful upgrades!

Move in ready home on quiet cul-de-sac featuring fresh paint, tons of natural light,          re-finished hardwoods floors throughout, remodeled kitchen with island, window seat and newer appliances that all stay and 2 beds with walk-in closets. Back yard is a private oasis that’s fully fenced and boasts a huge multi-level deck for entertaining, dog house and large storage shed. Quick access to freeway and short walk to elementary school. Wired for generator, plumbing ready for 3rd bathroom on lower. For a private showing, contact      Liz Johnson at 253-670-0357.

Click on the picture for more details

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