Carol Woods' Blog
You know that your credit score is incredibly important when you want to buy a home. There’s certain things that you could be doing in your everyday life that are hurting your credit score. Here’s what you need to avoid in order to keep your credit score up:
Don’t Allow For Too Many Credit Inquiries
When you’re at the checkout lane at the store, and the clerk informs you that you can save a lot of money if you just open this instant credit card on the spot, that can pose a problem. The issue with this is that the store will be instantly checking your credit score as well. These inquiries hang on your credit report for a certain amount of time. Certain inquiries can also make your score dip. Too many credit inquiries can make lenders suspicious of your ability to be a dependable borrower.
Unpaid Bills Can Add Up
If you forget to pay small credit card bills here and there, it could add up. Think of things like library books, medical bills, and credit card payments. That unreturned library fee that you never paid could come back to haunt you. A medical bill that was sent to collections can become a problem on your credit report. Most of the time, all you need to do is pay these fees up for your score to bounce back.
Credit Report Errors
Your credit report could have incorrect information about your financial situation and records. Your credit score could be dragged down just because of some errors on the report. If you do find an error on your report, you’ll be able to submit a claim to rectify the error.
Using Too Much Of Your Available Credit
Just because a credit limit is at $5,000, doesn’t mean that you need to max it out. Even if you pay your bills each month, using too much of your available credit can really harm your score. For your credit score to be calculated and to see how loan worthy you are, your total available credit and how much of that total credit is being used will be put into a formula. Beware of how much of your credit you use in order to keep that score up.
Not Touching Your Credit
You actually need to use your credit in order to build your score. You need credit history in order to have something for loan officers to work with. Accounts that become inactive over time will be closed by default and actually negatively impact your score.
By using your credit responsibly, you’ll keep your credit score up and be in good shape to buy a house.
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After you receive an offer to purchase your house, you likely have only a short period of time to make your decision. Ultimately, determining whether to accept, reject or counter a homebuyer's proposal can be tricky. But if you plan ahead, you should have no trouble performing a comprehensive analysis of a buyer's offer, regardless of how much time is available.
Now, let's take a look at three tips to help you review a homebuying proposal.
1. Weigh the Pros and Cons
Creating a pros-cons list may prove to be ideal, particularly for a seller who is struggling to decide how to proceed with an offer. With this list in hand, you can evaluate the advantages and disadvantages of accepting a proposal and determine the best course of action.
Furthermore, it may be beneficial to assess your homebuying goals relative to an offer. If you goal is to maximize your profits, for example, you may want to accept an offer only if it matches or exceeds your house's initial asking price. Or, if your goal is to move out of your current residence as soon as possible, you may be willing to accept a proposal, even if it falls short of your home's initial asking price.
2. Assess the Housing Market
Housing market data is readily available that may help you make the best-possible decision about a home offer. If you analyze this information closely, you may be better equipped than ever before to decide whether a buyer's proposal is "fair" based on the current real estate market's conditions.
Oftentimes, it helps to conduct a home appraisal before you list your residence as well. Following a home appraisal, you'll receive a property valuation that may help you price your residence and evaluate home offers down the line.
3. Consult with a Real Estate Agent
There is no need to examine a home offer on your own. Instead, collaborate with a real estate agent, and you can receive expert recommendations as you assess a homebuying proposal.
A real estate agent is happy to work with you at each stage of the home selling process. This housing market professional will make it simple for you to list your house and promote it to the right groups of buyers. Next, a real estate agent will set up home showings and open house events to showcase your residence. And once you receive an offer on your house, a real estate agent will allocate the necessary time and resources to help you make an informed decision.
Lastly, if the first home offer that you receive fails to impress, there is no need to worry. You should not feel pressure to accept the initial offer on your house. In fact, you can always counter this proposal to set the stage for negotiations with a buyer, which could increase the likelihood of a successful home sale.
Get ready to review a homebuying proposal – use the aforementioned tips, and you can fully assess any offer that you receive.
If you’re ready to buy a home, you probably have done a lot of research. One thing is sure: You know you need to get pre-approved for a mortgage. It’s perhaps the most critical step in the process of buying a home for a variety of reasons. There’s down payments and debt-to-income ratios, and other financial issues to worry about. You need to know what type of mortgage you should get. To help you understand what kind of mortgage you need, you should get pre-approved.
Understand The Pre-Approval Process
There are many misconceptions about pre-approvals. First, buyers need to understand that there is a difference between a pre-qualification and a pre-approval. A pre-qualification merely scrapes the surface of your financial state, while a pre-approval goes through everything a mortgage company will need to grant you a loan. You may be pre-qualified for a much higher amount than you can actually afford, for example.
A pre-approval is a lender’s written commitment to a borrower. The approval states that the lender is willing to lend a certain amount of money for a home. The lender obtains the following from the buyer:
- Employment history
- Credit report
- Tax returns
- Bank statements
The time and effort that it takes to get a pre-approval is worth it because everything will be ready for the lender to grant the mortgage once an offer is made on a home. It also gives the buyer an upper hand in finding the home of their dreams. Many sellers require a pre-approval with an offer.
When To Get A Pre Approval
As soon as you know you’re serious about buying a home and are ready to start the house hunt, you should get pre-approved. Pre-approvals do expire after a certain amount of time, but lenders can renew them with proper notice.
The Importance Of The Pre-Approval
Many buyers feel that they can skip the pre-approval process altogether. It has many benefits. Besides giving you a better look at your finances and how much house you can afford, pre-approvals can:
- Give you the insight to correct your credit score and help you correct credit problems
- Help to avoid disappointment when you find a home you love
- Allow first-time buyers to see all of the costs involved in buying a home
A pre-approval is a handy thing to have, and it’s not just because the experts say it’s essential. Getting pre-approved for a mortgage can help you to be more on top of your finances going into one of the most significant purchases you'll ever make in your life.