Lesley Smith's Blog
Your credit score can play a major role in your ability to get the financing that you need to buy a house. As such, you'll want to do everything possible to improve your credit score before you enter the real estate market.
Now, let's take a look at three quick, easy ways to boost your credit score.
1. Pay Off Debt As Quickly As Possible
Get a copy of your credit report from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). You are entitled to one free copy of your credit report annually from each credit reporting bureau, and you should take advantage of this perk so that you can learn about your outstanding debt.
If you have lots of outstanding debt, you'll want to start paying this off as quickly as possible. Because the less debt that you have, the more likely it becomes that you can get a favorable mortgage from a credit union or bank.
Don't wait to begin paying off outstanding debt. If you pay off even a small portion of your outstanding debt regularly, you can move closer to getting the financing that you need to acquire a terrific house.
2. Avoid New Credit Cards
A low credit score can be worrisome, and it may cause you to consider a variety of options to manage outstanding debt. However, if your credit score is low, there is no need to take out additional credit cards.
New credit cards may seem like viable short-term options to help you cover various expenses while you pay off assorted outstanding debt. But these cards are unlikely to help you resolve the biggest problem – paying off your outstanding debt to bolster your credit score.
Instead of signing up for new credit cards, it often helps to cut back on non-essential bills. For instance, if you don't need cable, you may be able to eliminate this expense and use the money that you save to pay off outstanding debt. Or, if you have first-rate items that you don't need, you may want to sell these items and use the profits to pay off myriad bills.
3. Keep Your Credit Card Balances Low
Once you have paid off your outstanding debt, you'll want to keep your credit card balances low.
It often helps to have one credit card that you can use in emergencies. If you keep one credit card and get rid of any others, you may be better equipped than ever before to maintain a high credit score.
Lastly, if you require additional assistance as you prepare to kick off a home search, you may want to work with a real estate agent. This housing market professional can help you narrow your home search to residences that fall within a specific price range. That way, you can avoid the risk of spending too much to acquire a house.
Increase your credit score – use the aforementioned tips, and you can raise your credit score before you launch a home search.
The process of buying a home is anything but cut and dry. There will undoubtedly be some twists and turns along the way. First, you need to be pre-approved for a mortgage. Then, you’ll need to find a home that fits both your needs and your budget. Finally, you’ll put in an offer on a place and hope for the best throughout the rest of the process.
There are plenty of things that you can do as a buyer to make buying a home both easier and more streamlined. Below, you’ll find some of the best tips that are specifically for those seeking to buy a home.
Give Them An Offer They Can’t Refuse
When there is a low quantity of homes and a high number of buyers, competition can get fierce. When the market is like this, you’re not guaranteed to get a property that you put an offer on. It may take making several offers on homes in order for you to finally get the keys to your dream house.
You never want your offer to be too low. A low offer could be insulting to sellers and instead of being countered, could just be outright refused. Make an offer too high and you still have a problem. A high offer may be accepted, however, it’s not going to be approved by your mortgage company for you to borrow that much for the purchase. If an offer is accepted and a home appraises for less, you may be left with thousands of dollars that you need to pay on the spot in order to secure the home.
The best way to present an attractive offer is to work with an expert realtor who can do the appropriate research and let you know what a good offer on the home would be.
Know Your Contingencies
After an offer on a home has been accepted, you need to get to work on the contingencies that you’re going to want on the home. Your realtor will also be a huge advocate in this area. Contingencies will include things like the right to do a home inspection, the appraisal contingency, and the contingency that you’ll only be able to move forward with buying the home if you have appropriate financing. These protect you as a buyer so that if something falls through, you’ll be able to back out of the deal without a penalty.
Don’t Go Credit Happy
Once your offer is accepted and your financing is in place, don’t head out to buy tons of new furniture and appliances for your new home. Your credit matters until you get the keys to the house. Opening new credit cards or adding significant debt can affect your credit score negatively, possibly putting a damper on your home purchase. Hold off on making purchases until after you move into the house.
The prospect of buying your first home is both exciting and nerve-wracking. On one hand, owning your own house is the final step of financial independence. You’re no longer accountable to a landlord and their rental agreement. On the other hand, buying a home is a huge financial decision that will determine where you live for the next several years.
As a first-time buyer, there’s a lot to learn about buying a house. You’ll often hear homeowners say, “I wish I knew that before buying this house.” So, in this article, we’re going to give you some common mistakes that first-time buyers make so you can have the best possible experience in the home buying process.
1. Underestimating the costs
When first-time buyers get preapproved for a mortgage, they sometimes see this as permission to spend whatever amount they’re approved for. However, even after closing costs, there are a number of other expenses you’ll need to account for in your budget.
You’ll be responsible for maintenance, utilities, taxes, and repairing things when they get old. If all of your money is tied up just paying your mortgage and other bills, you won’t have anything left over to maintain your house.
Furthermore, living your life just to make your mortgage payments is draining. Instead, buy a house that gives you enough room to save for retirement, vacations, a family, or whatever else you see in your future.
2. Prequalify first
Before you start shopping for homes, make sure you meet some basic prerequisites. You’ll need a solid credit score, steady income history, and money saved for a down payment. You might set yourself up for disappointment looking at homes that are outside of your spending limit if you don’t get prequalified first.
3. This probably isn’t your last home
While it’s okay to dream about the future, don’t set unrealistic expectations for your first home. You can always upgrade later on, and building equity in your first home is a good way to help you do that.
4. Don’t get too attached to your “dream home”
So, you’ve been shopping around for a few weeks and finally found the perfect house. If everything goes well your offer could get accepted. But if it doesn’t, don’t worry about it. There are constantly new houses appearing on the market, and there’s a good chance you’ll like one even more than this one.
5. Don’t waive contingencies without good reason
Contingencies are there to protect you. They might seem like a way to needlessly complicate a contract. Or, you might think that waiving them makes you look better in the eyes of the seller. However, both sellers and their agents know that contingencies serve an important purpose.
The three main contingencies you’ll want when buying a home are an appraisal contingency, financing contingency, and an inspection contingency. Unless you’re buying under special circumstances, you’ll want to keep all three in your contract.
For many people, summertime represents an ideal time to buy a residence. Ultimately, there are many terrific reasons to purchase a house in summer, including:
1. You can move after the school year ends.
When the school year draws to a close, you and your child can focus on relocating to a new residence.
Purchasing a house in summer guarantees that you can avoid the challenges commonly associated with relocating to a new residence during the school year. Instead, you and your child can spend summer looking for the perfect residence and buy a house before the new school year commences.
Furthermore, don't forget to consider the quality of schools near a residence before you finalize a purchase agreement. By doing so, you'll be able to find a home that is located near a great school for your son or daughter and ensure that your child can receive the best education possible.
2. You can complete many outdoor home improvement projects in summer.
Typically, purchasing a fixer-upper, i.e. a home in need of advanced repairs, may prove to be a viable option in summer.
If you buy a fixer-upper, you'll likely want to complete a broad array of home repairs immediately. Meanwhile, a summer home purchase ensures that you can enjoy warm temperatures for outdoor property improvement projects. As a result, you can perform roof repairs, home exterior maintenance and other outdoor home improvement tasks without having to worry about cold temperatures.
For those who are interested in finding a fixer-upper, there should be no shortage of properties available in summertime as well. Many home sellers add their properties to the real estate market in summer, guaranteeing that you can browse a large assortment of houses and find one that suits you perfectly.
3. You can work with an experienced real estate agent.
Buying a home in summer can be difficult, particularly for those who are exploring the real estate market for the first time. Lucky for you, many experienced real estate agents are available to guide you through the homebuying process.
An experienced real estate agent will help you find your dream home in no time at all. This professional understands the ins and outs of the summer housing market, and as such, will do whatever he or she can to help you discover the right house.
For example, if you are uncertain about how to obtain a mortgage, an experienced real estate agent can point you in the right direction. He or she may be able to put you in touch with nearby credit unions and banks, ensuring that you can secure a mortgage. Plus, your real estate agent might even be able to offer tips to help you boost your credit score before you apply for a mortgage.
This summer, collaborate with an experienced real estate agent to get the support you need to purchase a home. With an experienced real estate agent at your side, you can transform your homeownership dream into a reality.