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Mortgage News Matters

How to Build and Maintain A Good Credit Score

man holding phone looking at credit score

A good credit score is essential to any new or prospective homebuyer. It’s what will show your lender the likelihood that you will be able to pay back your debt. So, we’d say it’s pretty important!

The first step towards building and maintaining a good credit score is to first determine your credit standing. You can do this by obtaining a free copy of your reports from annualcreditreport.com. Once you have this information, carefully look over your report and take note of any errors that you find. These errors can then be disputed with the credit bureaus.

If you find that you have a below-average credit score, it can be refreshing to know that most credit blunders disappear from your credit report every 7 years. For more information on understanding and managing your credit score, check out our Credit Clean-Up Guide.

To better assist you in your credit building process, we’ve listed a few techniques below:

  • Apply for a secured credit card. The purpose of a secured credit card is to build enough credit to qualify for an unsecured credit card, which offers more benefits to its borrowers. A secured credit card requires a deposit to open. And the deposit is typically the same number as the borrower’s credit limit on the card. These work the same as a credit card and you won’t incur interest as long as you pay your balance in full.
  • Credit-builder loans. These are a type of forced savings program where the lender holds the money you borrow in an account that isn’t released to you until the loan is repaid. This can be a great option for those who are looking to build their credit.
  • Becoming an authorized user on a friend or family member’s credit card who is currently in good credit standing. Many will start building their credit by becoming an authorized user on a relative’s credit card. This option adds their payment history to your credit, showing that you are a reliable borrower – if they are in good standing.
  • Get a co-signer. If you have a family member or friend who is in better credit standing, you can also ask them to be your co-signer. This means that if you default on your loan, they are responsible to pay for it, so it’s best to be upfront with your co-signer about all the terms.
  • Have a long history of credit (start building credit early). The best way to start building good credit is to, well, start building your credit. Make sure that you start as soon as you can and maintain good practices like paying regularly and on time.

Once you’ve built up a good credit score, it may be helpful to follow a few techniques you can use to maintain.

  • Pay regularly and on time. One of the most effective ways to maintain a good credit score is to make sure you are paying your bill regularly and on time. To help you with this, consider setting up automatic payments so that you don’t miss a loan or credit card payment.
  • Maintain reasonable credit. Experts recommend keeping credit at no more than 30% of your credit limit if you can help it. If you must go over 30%, make sure you pay it back down to that amount as soon as you are able to.
  • Only apply for the credit you need. Think of it like a loan, only borrow what you need. Anything more is too much.
  • Pay minimum monthly balance on time. Paying on time shows your consistency and reliability as a borrower.
  • Keep old credit cards open. Closing old cards can have a negative effect on your credit, so it’s best practice to keep them open even if you no longer use them.

*The three major credit bureaus – Equifax, Experian, and TransUnion – have recently extended their offering of free weekly credit reports through April 22, 2022, in response to the COVID-19 pandemic. *

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Mortgage News Matters

10 Tips for Staging Your Home to Sell

minimal interior design

Once you’ve decided to sell your home, you’ll need to start thinking about the next step: Home Staging. Staging is the setting and arranging of your home to appeal to potential buyers.

Different than decorating, it does not convey a sense of style, rather sets the stage for others to imagine themselves living there.

It is an extremely important part of the home buying and selling process and because of that, we’ve put together a helpful list of 10 tips to successfully staging your home!

  1. Start with curb appeal.  When it comes to staging your home to sell, you must first start with curb appeal. Think – first impressions. The outside of your home is the first impression all potential buyers will have – and you want it to be a good one. There are many things that go into creating curb appeal for your home, such as repainting or repairing needed items, power washing your driveway, walkway, or sides of your home, and cleaning your gutters and roof.

    For a more exhaustive list of curb appeal tips, check out our blog on 10 Curb Appeal Tips That Will Help You Sell Your Home Faster.
  2. Depersonalize your space. With the overall goal of encouraging potential buyers to imagine themselves living in your home, it is helpful to depersonalize your space. This includes getting rid of personal photos, putting away jackets and personal clothing, and hiding common personal products that may line your bathroom counter. It may seem like these actions will make your space ‘less homey’, but only to you.

    Eliminating your personal items will make room for potential buyers to imagine their own photos hanging on the walls, their own shoes lining the front entrance, their coats hanging, and will allow them to further identify with the space.
  3. Get rid of clutter. Like depersonalizing your space, you’re going to want to dispose of all unnecessary clutter. Clearing your clutter makes your home look cleaner, bigger, brighter, and more welcoming. No one wants to walk into a mess, and clutter can be distracting from the main selling point – which is your beautiful home! Keep your décor minimal and add only what is necessary.

    Keep in mind, decluttering doesn’t mean throwing everything into a closet and shutting the door! One major selling point of a home – and one that most potential buyers will be looking for – is the closet and storage space. In fact, many real estate experts suggest keeping your closets open during a home viewing to further show off the storage space. And if it’s filled with all the clutter from the living room, it’s not a great look. Make sure as you’re decluttering, you’re throwing out or properly storing your items.
  4. Clean, clean, and then clean some more. Deep cleaning your entire home is one of the most important steps you can take when staging your home. It is easy to overlook places that you walk by every day, without thinking twice. But remember, potential buyers are looking at it for the first time and with heightened attention to detail.

    Places that are often overlooked are baseboards, pet fur on furniture and around the floor, and high places like ceiling fans or light fixtures. Make sure when you are preparing to clean, you consider every corner and look at everything through a metaphorical magnifying glass.
  5. Make any needed repairs. If there are any spots in your house in need of a paint touch-up or appliances in need of a quick fix – now is the time to make any necessary repairs.  This shows potential buyers that you take care of your belongings, which extends to your home, and provides assurance that you are not selling them a home that has been neglected in any way. This also instills trust amongst home buyers and sellers.
  6. Keep it neutral. In a similar sense to depersonalizing your space, presenting your home in a neutral color and design will generally make it more appealing to more people. Styles and colors are specific to certain taste levels, and the last thing you want to do is alienate or offend a potential buyer with something too loud or very specific. This may mean you may want to consider re-painting a certain room or wall in a more neutral color. This way, buyers can walk through the home and see a blank canvas that they can soon turn into their own.
  7. Add fresh flowers or plants. Bringing fresh flowers and plants into your space is a great way to liven up any environment while adding a bit of color. It can also bring a pleasant smell that will make your home more inviting. If you have pets or children and you are wary of bringing plants into your space, consider buying fake plants that will add life and color to your space, without making a mess or causing potential harm.
  8. Bring in the light. Brightening your home with light fixtures or window treatments is a great way to energize your space! Bringing in light often makes a home feel larger, more welcoming, and warmer. If your home is generally darker due to trees or location, consider buying more lighting and placing them throughout the space. Remember, welcoming is the feeling you want to convey in every room of your home.
  9. Consider furniture placement. Many of us arrange our furniture to our own liking, which is fine – unless you’re trying to sell your home. Industry professionals suggest pulling furniture away from walls and bringing couches and chairs into a closer seating area. This will open the room and allow for a more walkable area.

    The great thing about furniture – you can move it as many times as you’d like! Play around a bit and find what looks best for your space. Just keep in mind that you want your space to look open and welcoming, while at the same time giving off the idea of homey and cozy.
  10. Clean or refinish floors. Another area that we tend to overlook is our floors. This is one space that accumulates a lot of wear and tear and is extremely important to spend time improving the appearance of. If you have a home with mostly carpet, considering renting or purchasing a steam cleaner to eliminate stains or residue from normal everyday activity. Likewise, if you have hardwood floors, consider refinishing them so the new homeowners feel that they truly are purchasing a new home.
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Mortgage News Matters

6 Common Mortgage Loan Myths

trusted mortgage loan professional

Applying for a Mortgage can often feel overwhelming, especially for first-time homebuyers who are completely new to the process. Confusing and conflicting information can leave many borrowers reluctant to even start the process at all.

In efforts to provide more clarity, we’ve debunked 6 common mortgage loan myths below!

  1. 20% down payment required. It is a common belief of many potential homebuyers, that no matter the type of loan you are applying for, you will be required to put up a 20% down payment. This information is harmful because it is not true and can deter a lot of people from even considering applying for a mortgage, who are sure they don’t have the appropriate amount of funds.

    Borrowers who are unable to come up with a 20% down payment can still be eligible for a loan when they get Private Mortgage Insurance or PMI. An added expense on your monthly payments, PMI provides protection to the lender in the case that the borrower defaults on his or her loan.  

    This type of insurance is a common requirement for some Conventional or FHA loans with down payments as low as 3-5%. Keep in mind that once you own 20% equity in your home, you can cancel your private mortgage insurance and continue to make your mortgage payments without the extra expense.
  2. Pre-qualification is the same thing as pre-approval. This common misconception is important to clear up, as both pre-qualification and pre-approval are extremely helpful to the home-buying process and both play an important role.

    Pre-qualification is an estimation of the amount of money you can borrow, based on your current finances and credit score. It provides insight as to which loan option is best for you.

    Pre-approval is a more in-depth examination of your finances, including a credit check, that results in a written commitment from your lender of the maximum amount of money they can lend you.

    For more on the benefits of getting pre-approved along with our pre-approval document checklist, visit our pre-qualification vs. pre-approval page here.
  3. Your down payment covers the closing costs. The down payment is usually one of the first expenses that a potential homebuyer will begin saving for. This makes sense because it is usually one of the largest upfront expenses you will have. However, when saving for your down payment, it is important to keep in mind that it does not cover your closing costs.

    Closing costs are a separate expense that covers your processing fees, like the appraisal and title insurance, and usually range between 3% – 6% of the total balance of your loan.

    For more information on Costs to Consider, refer to our article here.
  4. You must have perfect credit. Many people are under the impression that your credit must be perfect before even considering purchasing a new home. Though lenders are looking for borrowers with good credit scores, there are many options for those who have less than perfect credit.

    One option for borrowers who find themselves in this category is to consider applying for an FHA loan. Insured by the government, this type of loan is perfect for those who may not meet the qualification factors required for a traditional conventional loan program.

    It is also important to keep in mind that there are many steps you can take to work towards building good credit. For more on this, reference our guide on Credit Clean Up Tips.
  5. Applying for a mortgage will hurt your credit. While it is true that applying for any new type of loan or line of credit will harm your credit, it will only do so temporarily. This is the same in the case of applying for a mortgage. However, it is likely that you won’t see this temporary hit to your credit until after you’ve already been pre-approved.

    If you are trying to avoid any harm to your credit during this time, it is a good idea to refrain from opening any unnecessary lines of credit.
  6. You can’t be in debt and buy a home. If this myth were true, most homeowners would not be in their homes today. Debt, in many forms, is common amongst many Americans, whether they are in the process of paying off a student loan or currently making payments on a car. And neither of these things should stop you from owning a home.

    The important number to consider here is your debt-to-income ratio. This number shows the percentage of your monthly income that goes towards debt payments and reoccurring expenses. The higher your debt-to-income ratio, the riskier you are as a borrower. Therefore, you want a low debt-to-income ratio when applying for a mortgage loan.

    If you find yourself in a higher debt-to-income ratio category, consider paying down your debt or finding a way to generate more income. Both of these solutions will help you get started on a path towards a lower debt-to-income ratio and open more opportunities for you to buy a home.
Categories
Mortgage News Matters

10 Curb Appeal Tips to Sell Your House Faster

white house from the street view

When preparing your home to sell, it is important to think about how to best appeal to potential buyers. How can you make them feel like they’re already home before they’ve even stepped in the front door?

From simple landscaping to touch-ups and essential upgrades, we’ve compiled a list of curb appeal tips anyone can follow before placing their home on the market.

  1. Trim shrubs, add greenery with planters and window boxes and add lights to landscaping. One of the easiest ways to add to your home’s curb appeal is by adding landscaping. This can be by trimming the shrubs, adding planters and window boxes, and lighting up your front lawn. Overgrown greenery can look uncared for and distract from the appearance of your home. Use your landscaping to create a beautiful showcase.
  2. Pressure wash EVERYTHING. A simple way to clean up the appearance of your home, walkway, porch, driveway, or balcony is to use a pressure washer. Think about it – it’s like giving your home a good wash before dressing it up. Pressure washers remove algae, grime, and mold from pretty much any surface on the outside of your home.
  3. Paint door or any spots on your house that need to be touched up and replace hardware. Some homeowners think they must repaint their entire house before putting it on the market, but it can be helpful to know that a few touch-ups go a long way. You can simply scrape a piece from the siding of your front door and bring it to any home improvement store for a color match.

    While you’re at it, make sure all the hardware around your home, from doors or windows, is polished and looking good. Though seemingly small, these simple touch-ups can change the entire look of your home.
  4. Redo/Fix up the walkway with new stones and pull weeds. Wear and tear are normal when it comes to all aspects of your home – especially when it comes to your front walkway. Over time, stones may get cracked or broken and will most likely require some repair. Another important step to grooming your front walkway is to pull up any weeds and pressure wash, if necessary.
  5. Create a welcoming entryway, upgrade the front porch light, add seating to the front porch. You want potential buyers to feel like they’re standing in front of their new home. A great way to do that is by creating a welcoming entryway that brings people together and makes them feel comfortable. Adding warm lighting, potted plants, or furniture to a front porch or entryway is a great way to create a pleasant environment.
  6. Use bold, bright colors for both painting and planting. You want to get potential buyer’s attention by making them take a closer look. A great way to do this is by bringing in bright, bold colors to your home, in the form of plants or greenery. You can also achieve this by painting your shutters, mailbox, or front door. The goal is to make your home as memorable as it is welcoming.
  7. Repair or replace your fence or mailbox. Some homeowners will tend to focus their attention on the physical house and may forget to consider other important elements of the property, which are often things potential buyers will see first. If you have a free-standing mailbox in front of your home, or a fence that needs repair, make sure to spend time attending to these special details. They are often the buyer’s first impression.
  8. Update siding; add shutters. If you haven’t done so in a while, it may be time to update your siding to create a more modern look. In addition, it can be a good idea to add shutters to your windows, which adds another small, thoughtful touch.
  9. Clean roof and gutters. It certainly isn’t glamorous work, but the time spent cleaning your roof and gutters will be well worth it when you start showing your home. Like a power wash and a good coat of paint, attending to these important areas will showcase your home in the best light possible.
  10. Fix driveway and upgrade garage doors. Another important element to focus on is your driveway. Like your walkway, it is only normal to have wear and tear to your driveway from years of use. This can be easily fixed through power washing, patching, or completely relaying. Likewise, make sure to repair or even repaint your garage doors, as these are just as important as the appearance of the front of your house.