Posts Tagged Credit
Tranunion has reported that U.S. consumers are a lower credit risk today tha two years ago. The Credit Risk Index (CRI) is now 3.13 percent lower than in 2009. Credit usage also dropped 5.4 percent as consumers relied on current credit limits or switched to using cash and debit cards.
Here is some great information from Dan Steward on buying a home, whether you are a first time home buyer or this is your 10th home.
Those who missed taking advantage of the first-time buyer tax credit but who are still planning the purchase of their first home, continue to have a wealth of opportunities in today’s marketplace. A few smart steps can save first-time buyers thousands of dollars. Here is a look at some of the ways how: Read the rest of this entry »
This is a good article from Ilyce Glink, author of Buy, Close, Move In! about buying a home in today’s changed marketplace and avoiding the most common mistakes. In it Glink talks about getting pre-approved before going house shopping, getting your credit cleaned-up before getting pre-approved and buying short sales and HUD homes.
I haven’t read the book yet, but this article has some very sound advice and I recommend reading it thoroughly. With more HUD and HomePath homes popping-up in Salt Lake City and throughout Utah, it’s a good time to take advantage of buying a great home at a very affordable price.
With real estate rules, laws, and fees changing daily, it’s easy to make a mistake when shopping for a home or a loan. Here are some of the most common mistakes buyers are making in the new housing market — and some tips on how you can avoid following suit.
1. Not Understanding the New Rules
What’s changed in real estate? The details. While you still go out and shop for a home, make an offer, find financing and close on the property, the details of how this process works today are vastly different from the way we went about buying real estate five, 10, or 20 years ago.
If you attempt to wade in without familiarizing yourself with the new way of doing business, you’ll find yourself blocked at almost every turn. Finding good partners (see below) can help, but you have to be prepared to provide more information and evaluate more factors in order to close successfully on a new home.
2. Failing to Build a Top Real Estate Team
If you buy and sell property for a living, you know that it’s a team sport. Even if you’re a real estate agent, you’ll still need a good lender, inspector, title or escrow company, and attorney to assist you in completing this purchase successfully.
But some buyers think they can do it on their own. In today’s new real estate world, that’s a mistake. For example, even in states where real estate attorneys aren’t generally used to close house deals, using an attorney to help you negotiate a foreclosure or short-sale purchase can mean the difference between closing and sitting in limbo. Real estate agents who intimately know the foreclosure market or have colleagues who represent real estate owned properties for banks and other financial institutions can help you find the right property faster. Get on their short list as an investor with cash to spend and they’ll give you extra time and attention.
Taking the time to build a great real estate team will pay off in spades. Not putting this team together ahead of time is a mistake you don’t want to make.
3. Not Responding to Your Lender’s Requests
Lenders have tightened up credit requirements and are taking the time to verify every piece of information you submit. In fact, when you apply for a mortgage today, you should expect to provide reams of documentation both with your application and during the verification process.
It’s quite likely that some of your information will disappear during the process, and you’ll be asked to replace various documents or augment your documentation. When these requests come in, you should take them seriously and respond quickly. If you don’t, you could be putting your financing in jeopardy.
4. Not Cleaning Up Your Credit in Advance
One of the ways lenders are tightening credit requirements is by raising the minimum credit score necessary to be approved for a mortgage. Prior to the credit crisis, lenders might have charged one interest rate if you had a 680 credit score — today you might need a credit score of 720 to get the same rate. When it comes to government-backed loans, FHA originally didn’t have a minimum acceptable credit score limit, but it has now instituted tougher standards that require a credit score floor of at least 600 in order to get a loan.
That’s why is extremely important that you spend time cleaning up your credit history and score before you apply for a loan.