<![CDATA[Credit Score Breakdown - Blog]]>Mon, 23 Nov 2015 05:09:47 -0800Weebly<![CDATA[Essential Steps to Consider When Buying a Home]]>Wed, 29 Apr 2015 18:19:12 GMThttp://creditscorebreakdown.weebly.com/blog/essential-steps-to-consider-when-buying-a-homeWhile buying a home is not necessarily easy, there are many tips and techniques you can follow to help simplify and streamline this confusing process. Regardless of whether or not you're buying a home for the first time or if you're a seasoned home buyer, there are several necessary steps you can take to secure and protect your financial future and current well-being. No matter why you're purchasing a home or a piece of land, take a moment and read through these steps to simplify the process and ensure your overall financial health is not compromised throughout the process.

Steps to Take Before Buying at Homes

The following steps should be taken before you ever begin your property search:

  •     Fully Understand Your Financial Situation – Before you begin the search for a new home, or even before you start “window shopping,” it's imperative to fully understand your current financial situation. Take an inventory of your liquid assets as well as your current FICO credit score (visit Your650Score). Understand how much money you can spend each month on mortgage payments and the miscellaneous fees associated with owning property. Without this understanding, it's practically impossible to determine whether or not a mortgage offer is healthy for you financial life. 

  •     Become Pre-Approved – While many potential homeowners wait to undergo the pre-approval process until they've found a home, this often results in disappointment once they uncover they do not qualify for a loan large enough to comfortably afford the house. Therefore, after you've assessed your financial health, the next step is to become pre-approved for a specific loan amount. This process also gives you buying power over those who are not pre-approved. 

  •     Find a Well-Qualified Real Estate Agent – After you've been pre-approved for a mortgage loan, do your research and find a reputable and respected real estate agent or agency within your area. Because the home seller is the one who pays realtor commissions, there's no reason a homebuyer should avoid the help of these knowledgeable professionals. In many cases, if you have an excellent real estate agent, you can garner lower home prices and greater deals through their negotiating power.

When Making an Offer on a Home

So you’ve found a home that you absolutely love and you're ready to make an offer. While this is an exciting time, there are several tips you must follow to help simplify and streamline this process:

  •     Review the City Planning Department – If you live in a city/suburban area you should visit the local city planning department; however, if you live in a more rural area, you should visit the county planning department. Because a home purchase is a long-term investment, it's important to determine what's being planned to be constructed around your home. In many cases, understanding the future of your immediate surroundings can help determine whether or not your home value will be positively or negatively effected within the next several years/decades. 

  •     Review Previous Utility Costs – Your monthly mortgage payment isn't the only bill you'll have regarding your new home. One of the most common mistakes made by home buyers is being able to afford the mortgage payments, but unable to comfortably afford the utility bills and property taxes. Remember, owning a home comes with a myriad of monthly and annual fees. You must calculate these fees into your overall monthly budget before making an offer. Failure to do so may result in being financially strapped or over-extending your financial output, which severely reduces or inhibits your ability to save.

<![CDATA[Mortgage Refinancing Mistakes - Know Your Credit Score]]>Sat, 18 Apr 2015 18:07:39 GMThttp://creditscorebreakdown.weebly.com/blog/mortgage-refinancing-mistakes-know-your-credit-scoreWhen you first bought your home, your credit score may not have been the highest. This is a situation many homeowners find themselves in. You agreed to a mortgage loan term, and as you became stronger within your financial situation, you believe you can obtain a lower interest rate. If you believe that you're paying an interest rate that's higher than what you should be paying, then your ideal solution may be to refinance your mortgage. Although this process can ultimately save you tens of thousands of dollars, if you're not careful, you could end up hurting your credit score according to your650score.com and ultimately paying more in fees and other miscellaneous costs. The following are the most common refinancing mistakes.

Mistake #1 – Not Understanding Your Credit Score

One of the biggest mistakes you can make within the process of refinancing your home is to not do your homework before agreeing to a refinancing term. The most important step to take before refinancing your mortgage is to fully understand your credit score and making sure there are no errors within its report. Your credit score is the foundation of your re-worked interest rate. Therefore, it's imperative to know whether or not your FICO score is high enough to secure a substantially lower interest rate (see here for more info).

You must also obtain a general idea of what your home is actually worth. While you can turn to several online sources for a basic-level understanding of your home value, the most effective way to determine your actual home value is to hire an official appraisal service. These services look at the quality of your home as well as the value of the surrounding property to provide an accurate home value. Walking into a refinance meeting with this information gives you the upper-hand when it comes to negotiating a lower interest rate.

Mistake #2 – Excessive Debt

While holding debt is key to fostering a high credit score, if your debit is out of control or if you have too many opened accounts, many mortgage lenders view you as high-risk. Therefore, before you even think about refinancing your home, you should take a close look at your open credit accounts and overall debt. One of the biggest mistakes is opening small lines of credit at various retail establishments, such as an electronics store. While you may think these are small debts, in the eyes of a mortgage lender, they are sources where your money must go. If you have too many of these small debts, you'll likely receive a not-so-desirable interest rate or be completely denied a refinanced home loan.

Mistake #3 – Not Shopping Around

Even if you are satisfied with your current lender, many homeowners rob themselves of thousands of dollars by not shopping around with different lenders. You should absolutely obtain quotes from various lenders. Don't assume your current lender will give you the best deal because you're a current customer. While you should obtain a quote from your current lender, use this quote as a way of negotiating better terms and lower interest rates with other lenders. Even if you decide to go with your current lender, you should never assume they are your ideal choice. Comparing refinanced interest rates with at least three lenders ensures you get the lowest interest rate possible on your home.