One important quality lenders look for when applying for a mortgage is your credit score. Typically, the better your credit score the better your monthly payments and interest will be for your new home. It's important to make note that repairing bad credit does take time and patience, as there is no quick fix to increasing your score. If you're interested in starting the home process soon but have low credit, don't fret. Practice these tips on boosting your credit, overall improving your score.  

Set Up Monthly Payment Reminders

The biggest contributing factor to maintaining good credit is ensuring you make your monthly payments on time. Depending on the bank, email or text message reminders can be set up to help remind you when it is time for a payment. If not, consider setting monthly reminders on your calendar. For those who prefer to not worry, consider setting up automatic billing for each month.

Limit Credit Card Use to Decrease the Amount of Debt

Practice getting into the habit of limiting your credit card use, which overall will decrease the amount of debt you owe. Once you have stopped using your credit card, check your credit report to compile a list of your accounts to see how much you owe on each account and at what interest rate. Use this information to determine a payment plan, paying off those with the highest interest first. Remember to continue to make minimum payments on other accounts as doing both can boost your credit score.

Tips on Maintaining Good Credit

• Ensure you are paying all bills on time
• If you have pissed payments, pay off months owed and get current on monthly payments
• Contact a credit counselor if you are struggling to keep up with payments
• Keep balances low and limit card use
• Don't a number of open credit cards you don't need

Choice Properties offers you a chance to find the home of your dreams. We work with your budget and ideas in mind to support your ultimate vision. Call us if you are ready to check out the available inventory or to speak with a reputable agent who can assist you with your home buying needs.

Real Estate Buyer FAQs

Homeownership is a common goal shared by many in the United States. Buying a home may be one of the biggest investments we make in life and is a rewarding accomplishment! Although many share the dream of owning a home, it's common for most people to be scared about following through the process. This is due to the homebuying process feeling intimidating or overwhelming, but it doesn't have to be! Working with the right real estate agent will make the process go smooth and easy. The expert agents at Choice Properties have answered your real estate buyer questions to help put your mind at ease.

Am I ready to be a homeowner?

The first step from taking the leap from being a renter to a homeowner is viewing your current financial status. Start by taking a financial inventory of your lifestyle, debts, and assets. Lenders look for those who hold a strong financial status and reliable job, as a mortgage loan must be paid on time. Another factor to consider is your credit score. Maintaining a good credit score will help you get the best loan and interest rate.

Is renting or buying a home better?

While renting and buying both have pros and cons, it simply comes down to what a person wants when buying a house. Many look at this opportunity as an investment and take pride in homeownership. This allows you to build equity with monthly payments, while also qualifying for tax incentives to help offset new homeowner expenses.

What do I look for in a new home?

When starting your home search, start by gathering your thoughts by creating lists. Identifying what you are seeking in a home, whether it's more space or a large backyard. This will help set expectations within your home search. Ask yourself if the home you are interested in is large enough to fit your needs now and in the future.

How do I get a mortgage loan?

Before setting up appointments to tour homes, it's best to shop for a mortgage rate to understand your budget. In the pre-qualification phase, you are given an estimate of what you can borrow based on your financial status. To be pre-approved for a mortgage loan means a lender has agreed to offer you a specific amount.

Choice Properties understands your needs and desires when it comes to the home search. We are here to help you define what you want, seek the best property and move forward feeling educated and able to make good decisions throughout the process. You can trust us to help you navigate it with the best real estate agents working for you. Call us to get started on your dream home search today.

A Beginner's Guide to Homeowners Insurance

Home insurance may not be the most interesting topic to discuss when buying a home, but it is essentials for new homeowners to understand the details that influence homeowners insurance. Virtually all mortgage lenders require insurance coverage, and for good reason! When shopping for insurance companies, understanding your policy options is key. Take time to view this beginner's guide to homeowners insurance to help understand what a basic homeowners policy provides.

Damage to the Interior or Exterior of Your House

There are a number of tragic events that could damage the interior or exterior of your home. A few to consider are:

• House Fires
• Hurricanes
• Lightening
• Vandalism
• Other Natural Disasters

In the event of damage due to covered costs, your insurer will compensate you for repairing or rebuilding if necessary. However, damage caused by floods, earthquakes, or poor home maintenance are not covered and you may need to find an outside provider.

Loss or Damage to Personal Belongings

Clothing, furniture, appliances, and other valued items are often covered if they are destroyed in the insured disaster. However, there may be a limit amount depending on the company you choose to insure through. According to the Insurance Information Institute, most insurance companies will provide coverage for 50-70% of the amount of insurance you have structured in the home.  

How Much Does Homeowners Insurance Cost?

According to the National Association of Insurance Commissioners, the average cost of homeowners insurance was $791, however this rate can easily fluctuate based on insurance companies and specific policies. The price is first determined by how much coverage you purchase which is a decision you must make after determining the value of your home and taking inventory. Other factors that can influence the cost are your zip code, the size of the house, proximity to fire hydrants, the condition of plumbing, and electrical systems.

Choice Properties understands your needs and desires when it comes to the home search. We are here to help you define what you want, seek the best property and move forward feeling educated and able to make good decisions throughout the process. You can trust us to help you navigate it with the best real estate agents working for you. Call us to get started on your dream home search today.

Looking to purchase a new home or refinance requires an understanding of the basics of qualifying for a mortgage. It helps to know some basic steps can help prepare for what is ahead. Learn how to be in a position ahead of time to get the best deal available.

Credit

A credit report is required from three major credit bureaus to document payment histories for auto loans, personal loans, credit cards, debt collections or other negatives. Credit scores are considered a predictor of lending risk. The higher a score, the better it looks to a potential mortgage lender. The following factors may also play a role in credit scores:

• Debt payment history, including late payments can influence credit score

• Credit card balances of more than 30-50 percent of credit limit can have a negative impact on a credit score

• Collections can damage your credit score but can be negotiated with the agency

• Bankruptcies and foreclosures have a general waiting period of around 2-4 years following insolvency prior to qualifying for new mortgage financing

Capacity

A mortgage lender wants to know an individual has the financial ability to repay a home loan. W2 income (working for somebody) is considered the most stable source of income which varies little from month to month. Self-employed income is riskier in a lender's eyes as it can vary widely month to month in terms of generating revenue to pay a loan. Some helpful hints include:

• Document income with W2s, paystubs and tax returns to demonstrate financial stability

• Self-employed individuals will be required to document income on tax returns and should be prepared to show the documents to potential lenders

• Debt-to-income ratio is important as it shows what proportion of income goes to debt payoff and risk for lending. Typical DTI should be lower than 45%-50% going to debt.

Collateral

The property being purchased will serve as collateral for the mortgage. A lender will look at the value of the property as one of the most important factors. A full appraisal may be required to verify the value and condition of the property.

Getting Started

The following are some great next steps to take when looking to take out a mortgage for a property:

• Check credit and make sure any issues are cleared up ahead of time.

• Pay off outstanding debt before applying for a loan. The lower the DTI ratio, the easier it is to get desirable financing terms. This can save money in the long run.

• When refinancing, take care of necessary repairs before having an appraiser come out. This will help the home value.

Having a financial portfolio that looks solid, has low debt and high credit scores can greatly increase the chances for getting a mortgage with better financing terms. Understanding how lenders think and preparing the portfolio will help individuals prior to applying for a loan search for a great deal and support a smoother process overall.