Buying a Home

Here are 4 Ways to increase your chances of Getting a Mortgage.  Good Credit is required for a Mortgage Lender to approve you for a Mortgage.  The coronavirus pandemic has made a huge dent in the U.S. economy, but mortgage lending interest rates are at an all-time low. It’s no surprise then that in 2020, existing-home sales hit their highest level since 2006, according to the National Association of Realtors.  

That said, because of the economic downturn, many home lenders have tightened their underwriting criteria, showing some caution about who they’re willing to lend to. So, even if you meet the minimum requirements to get a mortgage, it may still be tough to qualify.

If you’re hoping to buy a new home or even refinance your existing mortgage loan, here are four things you can do to increase your chances of getting approved:

• Check your credit score and report
• Shop around and compare mortgage lenders
• Pay down debt
• Avoid taking on new debt

1. Check your credit score and report

Your credit score is a key indicator of your overall credit health. Use a free service like Experian or Discover Credit Scorecard to get free access to your FICO credit score, which is widely used by lenders – you may even already get free access through your bank or lender.

Due to the pandemic, the three national credit bureaus are offering one free credit report per week through April 2021 – normally, you can only get a free credit report from each bureau once every 12 months. Visit AnnualCreditReport.com to get your copy.

What is a subprime credit score?

If you have bad credit, you should research ways to boost your credit score ASAP. Improving your credit score doesn’t have to be a difficult task. Here are some simple ways to improve:

• Pay bills on time
• Get caught up on past-due payments
• Pay down credit card balances
• Keep a low balance
• Dispute any errors or inaccurate information on your credit card report

2. Shop around and compare mortgage lenders

Each lender is different, not only in how they underwrite mortgage applications but also in how they assign interest rates. So, while one lender may reject your application, another may be more than willing to finance your home purchase.

The more mortgage lenders you compare, the better your chances of finding one or more lenders who will work with you. You’ll also improve your odds of getting the lowest interest rate that’s available to you.

Filling out applications with multiple lenders can be time-consuming, so consider using an online marketplace like Credible to shop around and compare offers from multiple lenders in one place.

3. Pay down debt

While your credit score is a key indicator of whether you qualify for a mortgage, another crucial element is your debt-to-income ratio (DTI), or the percentage of your monthly gross income that goes toward debt payments.

Many mortgage lenders prefer that your total DTI stay below 36%, and your front-end DTI, which only includes housing costs, to be no more than 28%. While some may go higher than those thresholds, the lower your ratio is, the better.

To maximize your efforts, focus on loans and credit cards with the lowest balances that you can pay off quickly. Even a small reduction in your DTI could make a huge difference.

4. Avoid taking on new debt

A mortgage loan is a major financial commitment, both for you and the lender, so it’s natural for lenders to be sensitive to other debts that could make it difficult for you to keep up with your monthly payments. As you get your credit mortgage-ready, apply for a loan, and go through the home buying or refinancing process, it’s critical to avoid applying for other credit accounts.

If you expect to need a loan or credit card, complete that process six or more months before you submit your mortgage application.

What credit score do you need to buy a house?

What are today’s mortgage rates?

Mortgage rates have dropped significantly in 2020, but between August and September, they’ve remained somewhat flat. Unlike shorter-term loans, mortgage rates don’t have a strong tie to the prime rate or federal funds rate.

However, they are influenced by 10-year Treasury Notes and inflation rates, both of which have been relatively low in 2020. Here are the latest average mortgage interest rates for the week of Oct. 8, according to Freddie Mac:

• 30-year fixed-rate mortgages: 2.87%
• 15-year fixed-rate mortgages: 2.37%
• 5/1 adjustable-rate mortgages: 2.89%

Based on the current mortgage and refinance rates, it may be a good time for you to refinance.

How does the Fed rate cut affect your mortgage and credit cards?

If you’ve been thinking about buying a home or refinancing your mortgage loan, now is an excellent time to do it. There are even options with a low-down payment if you don’t have a sizable savings account balance – though a lower down payment may result in private mortgage insurance.

Before you submit your mortgage application, however, it’s important to make sure you’re a good candidate for a loan. If you have bad credit, existing debts or more -make sure you do the above to improve your odds of getting approved. Check your credit score and work on paying down credit cards and other low-balance debts.

Also, make sure to avoid new credit applications several months before you file a mortgage application, as well as during the homebuying process. And to ensure that you get the best rate available, shop around. You can also get in touch with experienced loan officers and get all of your mortgage questions answered.

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https://www.risingstarrealty.com/get-best-mortgage-rate-buy-home/

Some credit mistakes are a lot worse than others. Little ones, like paying a credit card bill a day late, may cost you a penalty fee, but that’s a relatively minor irritation.  It’s not going to stand between you and a mortgage.  Other seemingly small slip-ups can lead to full-fledged disasters.

What makes a credit misstep haunt you? Some things can be reversed quickly. Running up credit card bills can tank your credit score, for instance, because the portion of your credit limits you’re using is weighed heavily in credit scoring. But when you pay down the debt, the damage disappears as lower balances get reported to the three major credit bureaus, Equifax, Experian and TransUnion.

Mistakes that have long-running ripple effects hurt the most, says credit expert John Ulzheimer. A late payment, for example, can get sent to a collection agency, then perhaps grow into a repossession or bankruptcy. Those batter your credit and stay on your credit record for years. Likewise, co-signing a loan for someone who is later unable to pay can hamstring your finances for a long time.

Common mistakes that can hurt your finances

Missing a payment: Paying just a day late might cost you a penalty fee, but your credit score won’t suffer because creditors can’t report your account as delinquent until it’s 30 days past due. If you have a high score, going 30 days late can knock as much as 100 points off your score and it stays on your credit report for seven years. The damage gets worse if you let the account slide to 60 days past due, 90 days past due or more. Your score can recover, but it will take time. Catching up on that account, and keeping all other payments up to date and balances low, can help.

Raiding retirement funds to pay debt: Most people don’t want to file for bankruptcy. Almost half of Americans say they would not file no matter how much credit card debt they had, according to a recent study commissioned by NerdWallet. Bankruptcy attorney Roderick H. Martin of Marietta, Georgia, says some of his clients have tapped – or even emptied – retirement savings in a desperate attempt to stay afloat. That often just delays the inevitable “then they turn around and file for bankruptcy”. Retirement savings are typically protected in bankruptcy, but money already withdrawn cannot be recovered.

Co-signing a loan: Aaron Smith, a financial planner in Glen Allen, Virginia, says co-signing so a friend or relative can get credit is often a mistake. “My personal and professional opinion is if they can’t get it on their own, there must be a problem”. If the primary borrower doesn’t pay as agreed, it can leave both your relationship and your credit in tatters. Even if the borrower repays as agreed, remaining on the loan can limit your borrowing capacity. Before you co-sign, ask if you can be taken off the loan at some point.

Sometimes doing nothing is the mistake – We may think we’re too busy to trouble ourselves with fine print or financial chores. Either can come back to bite us.

Not checking your credit: “I think checking your credit is like going to your dentist for a cleaning,” says Elaine King, a certified financial planner and founder of the Family and Money Matters Institute. “You need to make a habit of doing it. If you wait too long, there can be some rotten stuff there.” A credit report isn’t exciting reading; it’s a summary of your past handling of credit. But “boring” is what you want – anything you didn’t expect to see is worth investigating in case it’s an error or a sign of fraud. Through April 2021, you can get a free credit report weekly from the three major credit bureaus by using AnnualCreditReport.com. Plan to check at least annually, and more often is better.

Ignoring the details: Not knowing your credit cards’ interest rates or when a 0% interest rate ends can cost you. Knowing interest rates can tell you which card to use when you’re paying for a new transmission and need to carry that balance for a while, for instance. Knowing when a teaser rate ends can help you ensure you’ve paid off the balance by then. It’s important to read the fine print. Some cards – primarily store cards – charge deferred interest if there is still a balance at the end of the introductory period. That means the “savings” from the teaser rate are added to your balance, wiping out any benefit.

This article was provided  by the personal finance website NerdWallet. Bev O’Shea is a writer at NerdWallet.  5 Weird Places to use your Credit Card

U.S. News & World Report unveiled its 2020-2021 Best Places to Live and Best Places to Retire in the United States. The new lists evaluate the country’s 150 most populous metropolitan areas based on affordability, job prospects and desirability.

In the “Best Places to Retire” category, Florida metro areas stood out with seven out of the top 10 slots and 13 of the top 25 slots.

“After a prolonged period of staying at home, people are taking a critical look at where they live, and many are looking to find a place they can feel happier, afford more or pursue new opportunities,” says Devon Thorsby, real estate editor at U.S. News. “The Best Places rankings can help people examine the details they consider important in a larger community.”

This year, U.S. News increased the number of metropolitan areas evaluated for both sets of rankings from 125 to 150, to provide a broader and more accurate reflection of where Americans can live and retire.

Best places to retire

U.S. News & World Report’s announcement of top retirement destinations says it’s “dominated by Florida metro areas, largely due to affordable homes, low taxes and high ratings for happiness and desirability.”

An increase in Desirability and Job Market scores lifted Sarasota from No. 2 last year to No. 1 this year – but it overtook another Florida city, Fort Myers, which became No. 2. And while Port. St. Lucie’s Housing Affordability score decreased slightly, increases in Desirability, Job Market and Health Care scores helped it jump two places to No. 3.

Miami also saw a decrease in Housing Affordability, but it broke into the top 10 this year, jumping five places to No. 9 thanks to Desirability and Job Market score increases.

The top 25 places to retire also includes three Texas communities, and two places each in Michigan, North Carolina and Tennessee.

“Moving to a new place for retirement can reduce your cost of living and improve your quality of life,” says Emily Brandon, U.S. News senior editor for retirement. “The Best Places to Retire includes information about housing costs, access to quality hospitals and the strength of the job market, which can help you find a retirement spot that will meet your needs.”

The 2020-2021 Best Places to Retire were determined based on a methodology that factored in happiness, housing affordability, health care quality, retiree taxes, desirability and job market ratings. These measures were weighted based on a public survey of individuals across the U.S. who are nearing retirement age (ages 45-59) and those who are of retirement age (60 or older) to find out what matters most when considering where to retire. Data sources include the U.S. Census Bureau and the Bureau of Labor Statistics, as well as U.S. News rankings of the Best Hospitals.  5 Financial Risks to Consider in Retirement

2020-2021 Best Places to Retire – Top 25

1. Sarasota
2. Fort Myers
3. Port St. Lucie
4. Naples
5. Lancaster, Pa.
6. Ocala
7. Ann Arbor, Mich.
8. Asheville, N.C.
9. Miami
10. Melbourne
11. Myrtle Beach, S.C.
12. Nashville, Tenn.
13. Jacksonville
14. Manchester, N.H.
15. Daytona Beach
16. Orlando
17. Dallas-Fort Worth, Texas
18. Lakeland
19. Chattanooga, Tenn.
20. Tampa
21. Grand Rapids, Mich.
22. Houston, Texas
23. Charlotte, N.C.
24. San Antonio, Texas
25. Pensacola

© 2020 Florida Realtors®

Haunted houses are popular attractions this time of year, but most Americans say they wouldn’t consider living in one. However, a majority of those who believe they currently live in a home that is haunted say the spooky happenings they’ve experienced are not reason enough to move, according to realtor.com’s annual Halloween survey released today.

A realtor.com annual Halloween survey of more than 2,000 Americans found that 13% believe they live in a home that is haunted, and a majority of them – 54% – knew or suspected the house was haunted before moving in. However, most (62%) said they’re not likely to consider buying a home rumored to be haunted. Still, of that 13% who believe they share space with spectral residents, 56% have not considered moving.

“Haunted houses typically draw big crowds this time of year, but we wanted to see how many people actually believe they live in one,” says Lexie Holbert, realtor.com housing and lifestyle expert. “Although only a small percentage of respondents indicated they believe their home is haunted, it was surprising to see how many are perfectly comfortable sharing their space with spirits from the world beyond.”  The West led the nation with the most respondents who believe they live in a haunted home at 18%, followed by 13% in the Northeast, 11% in the Midwest and 10% in the South.

Of those who suspected their house was haunted prior to moving in, Northeasterners were most comfortable living with spirits at 76%, followed by those in the West at (57%), the South (51%) and the Midwest (35%).

When the 13% who believe their homes is haunted were asked to describe the spooky things that occur, strange noises topped the list at 44%, followed by:

• Shadows – 38%
• Hot and cold spots – 37%
• The feel of certain rooms – 34%
• Odd pet behavior – 30%
• Items moving – 29% (tie)
• The feel of being touched – 29% (tie)
• Levitating objects – 17%

According to survey results, the spirits make their presence known in different ways depending on geography. Regionally, here’s what topped the list of ghoulish sensory exploits:

• Northeast – Feel of the room (41%), shadows (34%), strange noises (33%)
• Midwest – Strange noises (57%), shadows (37%), items moving and hot and cold spots (36%) (tie)
• South – Strange noises (58%), shadows (48%), the feel of a certain room (44%)
• West – Hot and cold spots (38%), strange noises and shadows (33%) (tie), the feeling of being touched (28%)

About half of the men surveyed (54%) said they’re unlikely to consider living in a house rumored to be haunted compared to 70% of women. People aged 55 and over were most unlikely to consider living in a haunted house (64%), followed closely by those aged 18-34 (62%) and 35-54-year-olds (59%).

When asked about a discounted home price for the haunting, a number of people suggested that something in the 10% range would make them consider a haunted house – but one in four respondents (23%) ages 18 to 24 said no discount would be enough.  10 Most Haunted Houses in America

Cheap & Unique Holiday Decorating Ideas

© 2020 Florida Realtors®

By Kerry Smith

The COVID-19 pandemic pushed nearly half of millennial home shoppers to speed up their home buying timeline, according to a HarrisX survey of 2,000 home shoppers who plan on purchasing a home within the next year. The study, funded by realtor.com, shows the largest generation in U.S. history is prepared for a competitive market, and they’re willing to ask Mom and Dad for financial help.

“If there is any silver lining to the current economic landscape, it’s that mortgage rates are hanging around record lows,” says Danielle Hale, chief economist at realtor.com. “With little to no equity to leverage, millennial homebuyers tend to take out larger loans. Historically low rates are making this more manageable, even with rising home prices.”

Hale says today’s millennial buyers are largely the ones who “were fortunate enough to keep their jobs and save for a down payment – one of the largest hurdles of buying a home. The combination of low rates and the opportunity to save is enabling many millennials to move up their home buying timeline.”

COVID accelerates millennials’ plans

• 75% of millennials have been working remotely since the COVID pandemic hit. Of those respondents, 63% said they plan on purchasing a home because of their ability to work remotely.
• Nearly half of millennial respondents – 49% – say COVID pushed them to buy a home sooner than their original timeline.

Home search techniques

Fifty-nine percent of millennials say COVID changed the way they approached their home search. Of those respondents:

• 37% spent more time researching properties online
• 35% spent more time looking at listing photos
• 32% spent more time watching listing videos
• 31% were more selective about the homes they decide to tour
• 27% drove by the home to check out the neighborhood

Buyer competition

• 71% of millennial respondents expect some or a lot of buyer competition in the market
• 68% said shelter-in-place orders helped them save for a down payment
• 45% expect financial assistance from family or friends

Why buy now?

• Over a quarter – 26% – of millennials said they’re tired of their current home, and that was driving their desire to purchase one
• 23% of millennials said a growing family was the main driver
• 22% cited favorable home prices
• 20% cited favorable interest rates
• 18% reported a desire to live in a safer neighborhood

What kind of home do they want?

• 36% are looking for an “entry-level” home at or under $200,000
• 28% want a home between $200,000 and $350,000 (Altogether, 63% of millennials seek a home at or below $350,000 – the median U.S. price)
• 37% of millennials are looking for a home over $350,000
• 54% believe home prices have hit their peak

Where are they going?

• 49% want to move within their current city
• 31% want to move from the city to the suburbs, a higher percentage than either Gen X or baby boomers
• 13% want a different city but in the same state
• 8% want to move to a completely different state

Millennials are the largest generation in U.S. history, born between 1981 and 1997. For the last 5 years, they’ve been the dominant buying force in the market.

5 Tips for Millennial Home Buyers

How to Get the Best Mortgage Rate

© 2020 Florida Realtors®

By Kerry Smith