Why Did My Credit Score Drop?

Credit report with scoreDATE:JANUARY 15, 2014 | CATEGORY:TIPS & ADVICE | AUTHOR:

Last month your credit score was 735. You checked it again this morning, and it’s 20 points lower. What’s up?

It could be any combination of factors. There aredifferent credit scoring models used, and they can weigh factors differently to determine your score. But these are five of the most common reasons you could experience a dip in your score:

Late credit card or loan payment

Your payment history has a significant impact on your credit score, accounting for about 31 percent of your total rating. If your make a credit card or loan payment more than 30 past its due date, this information will likely show up on your credit report, which could cause your credit score to drop. Anything 30 days or more late matters, and 60 or 90 days late matters even more.

Larger than normal credit purchases

Another key factor in calculating your credit score is your credit utilization ratio. In simpler terms: How much of your credit are you using in relation to your total available credit? In general, the lower this ratio, the better your credit score will be. If you’ve been using more of your available credit lately, you may see a drop in your credit score. If a creditor lowers your credit limit, it may also change your credit utilization ratio and impact your score.

An unpaid account goes to collection

In order to maintain a good credit score, you need to pay all your accounts — not just credit cards and loans — in a timely manner. Late payments to medical facilities, student loans and utilities can be sent to a collection agency, which could in turn show up in your credit report.

You applied for a credit card

When you apply for credit, you give lenders the OK to ask, or “inquire,” for a copy of your credit report. This is known as a hard inquiry on your credit. When the information on your credit report indicates that you’ve applied for multiple new credit lines over a short period of time, your credit score may be lowered as a result.

You closed a credit card account

Canceling a credit card could be a good idea if it eliminates the temptation to charge more than you should. But by closing an old or unused account, you are wiping away some of your available credit, thus increasing your credit utilization ratio. As a result, your credit score may drop. Also, the length of time you’ve had accounts open shows that you have a solid payment history, so that could be another reason to keep that card you’ve had awhile open (as long as you’re paying it on time).

Written by Becky Frost, Senior Manager of Consumer Education for Experian Consumer Services. Experian Consumer Services offers credit monitoring products like freecreditscore.com™, which has resources and calculators that help you understand how credit can impact your life. Credit is an important component when buying, renting or refinancing your home


Posted on January 24, 2014 at 11:44 pm
Shelia Simmons | Posted in Economic News, Home ownership, Real Estate News |

3 Questions to Ask Before Buying a Home

1.20 Visual  

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. Though your friends and family have your best interests at heart, they may not be fully aware of your needs and what is currently happening in real estate. Let’s look at whether or not now is actually a good time for you to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. A study by the Joint Center for Housing Studies at Harvard University reveals that the four major reasons people buy a home have nothing to do with money:

  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

When looking at future housing values, we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here is what the experts projected in the latest survey:

  • Home values will appreciate by 4.3% in 2014.
  • The cumulative appreciation will be 28% by 2018.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.

3. Where are mortgage interest rates headed?

A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by an increase in mortgage rates.

The Mortgage Bankers Association (MBA), the National Association of RealtorsFannie Mae and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months.

Bottom Line

Only you and your family can know for certain the right time to purchase a home. Answering these questions will help you make that decision.


Posted on January 24, 2014 at 11:40 pm
Shelia Simmons | Posted in Real Estate News |

4 Things You Need from Your Listing Agent

  

1.21 VisualAre you thinking of selling your home? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant. You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one. Let us help.

If we were hiring an agent to sell our home today, we would require that they:

1. Understand the timetable with which my family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan. This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. I am not suggesting that your agent can pick the exact date for your move. You just want the agent to exert any influence they can.

2. Remove as many of the challenges as possible

It is imperative that your agent know how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them (commission, length, etc.), don’t expect them to turn into Superman when they are negotiating for you with your buyer.

3. Help with the relocation

If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence.

4. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving. You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

Make sure you let your agent know what you and your family expect from them.


Posted on January 24, 2014 at 11:39 pm
Shelia Simmons | Posted in Home ownership, Real Estate News |

TAKING STRESS OUT OF HOME BUYING

Great information below from a blogger on RealtyTimes.  For more information about the home buying process, please contact me.  I would love to be of assistance to you.

Written by  on Tuesday, 14 January 2014 4:56 am

Buying a home should be one of the most fun times of your life, not stressful. As you look for your first home, next home, or dream home, keep in mind these tips for making the process as peaceful as possible. 

  1. Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the Buyer’s Agent you chose is both highly skilled and a good fit with your personality. One thing to look for is responsiveness.  Looking at sites with agent reviews like Zillow is a good way to see what others  have found from their experience regarding agent responsiveness, local knowledge, process expertise, and more!
  1. Remember, there’s no “right” or perfect time to buy. When you find that perfect home, don’t try to second-guess interest rates or the housing market by waiting longer — especially if your purchase timeline is for 3-5 years or longer or you risk losing out on the home of your dreams.  In a low inventoried market like we are in right now with less than 4 months of housing supply in much of our market, this can cause others to jump in and make offers and you might miss out!  Zillow is predicting housing prices up 4% nationally this year so the 2014 housing market probably won’t change fast enough to make that much difference in price except for up, and a good home won’t stay on the market long.  Last fall mortgage rates showed us just how quickly they can go up! Rising 150 basis points or so from the lows of last summer, we now see rates in the 4.5%-4.625% range and probably moving higher over the next six months.  As the economy perceptively improves so will mortgage rates move higher!
  1. Know that no house is ever perfect. I have built homes before that I still saw things I would change or do differently next time. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Ask the seller to address them upon inspection and prior to closing or if unimportant, let the minor ones go.
  1. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price in a market like this one where inventory is so low we are back in a “Seller’s Market” or by refusing to budge on your offer may cost you the home you love.  Negotiation is give and take and meeting in the middle! This is a distinctly different market than it was 2-3 years ago when there was 15-18 months’ supply of housing sitting on the market and aging rapidly with high days on market.  Seeing in certain areas of our market homes going under contract in “days” once again!
  1. Plan ahead and “first things first!” Buyers contact me every day wanting to know when we can go see a specific property!  I always try and educate Buyers I work with that the first thing that needs to be done, is to get pre-qualified for a mortgage.  Takes minutes and hours not days anymore!  Most of the time it can be done online without ever having to go to a mortgage company or bank!  Don’t even need financial docs most times to get pre-qualified!  The lending process is drastically different than it was 6-8 years ago. If it has been that long (or longer) since you last purchased a home, don’t assume because it was no problem before to get financing that today is going to be the same.  Also, and this is important for first time home buyers, getting a mortgage is more than having a good credit score and a job! It is about a combination credit score, “documented income,” access to down payment funds, and falling into a precise range of “debt to income” ratios that determine how much house you can afford!  Waiting until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for the home inspection is too late! Too, it makes your offer weaker, and in the presence of this being a “Seller’s Market” once again with multiple offers, low inventory, and homes not staying on the market long it might cause you to miss that purchase you are looking to make on that next, first, or dream home because you weren’t ready to fully make the strongest offer you could. Presenting an offer contingent on a lot of unresolved issues will make your offer much less attractive to sellers.
  • Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.
  • Look at differences in MI or Mortgage Insurance. Most are still going FHA. FHA mortgage MI has gotten much more expensive over the past six months. Look at differences between FHA and a Conventional mortgage as to whether you can qualify and the cost of doing both!
  • Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.
  • Choose a home first because you love it; then think about appreciation. While U.S. homes are expected to appreciate at an average of 1-2 percent annually above inflation between now and 2020 from one report I recently read, a home’s most important role is to serve as a comfortable, safe place to live.

 


Posted on January 14, 2014 at 5:34 pm
Shelia Simmons | Posted in Home ownership, Real Estate News |

Predictions for 2014: Sales Will Surge

1.6 Blog Visual  

 

Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Here are the three categories of buyers we believe will create this strong demand.

The First Time Buyer

The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, when they compare renting versus buying, many will choose homeownership.

The Move-Up Buyer

Over the last several years many homeowners were trapped in their home by negative equity. This prevented them from moving up to the home of their dreams. Zillow has justrevealed that home equity increased by $1.9 trillion dollars in 2013 an increase of 7.9% in the last twelve months. With home values rising, this pent-up demand will finally be released and move-up properties will be in high demand.

The Immigrant Buyer

No one knows what will happen with immigration reform. However, we do know what such reform would have on housing demand. A recent study released by the Immigration Task Force of the Bipartisan Policy Center (BPC) found that immigration reform, if passed, would dramatically increase demand for housing units; increasing residential construction spending by an average of $68 billion per year over the next 20 years.

We realize that our projections are based on three situations that are still uncertain. However, we believe that these issues will come to fruition and thereby dramatically increase demand for homeownership.


Posted on January 6, 2014 at 5:54 pm
Shelia Simmons | Posted in Economic News, Real Estate News |

NAR’s Existing Home Sales Report

For December 2013:


Posted on January 6, 2014 at 5:45 pm
Shelia Simmons | Posted in Economic News, Real Estate News |

6 WAYS TO MAKE AN UNFINISHED BASEMENT AWESOME

Date: September 06 2013 | Author: Brian | Category: Creative on BrightNest.com
 

When you think of a cozy room, what comes to mind?

Warm lighting? Thick throw blankets? Roaring fire? Stuff like that? Makes sense. Here’s what you probably didn’t visualize: ceiling pipes, excessive moisture and concrete floors.

And that, my friend, is why unfinished basements get a bum rap. They frequently suffer from all three issues. But turning a cold basement into a cozy spot isn’t impossible! Even better, it can be done for far less than you’d pay for a full remodel.

Here’s how:  

1. Stop the Moisture

The biggest anti-cozy factor in most unfinished basements is moisture. Nobody likes that damp, wet sock smell, and you can’t put nice things down there if they’re just going to get wet. That means that before you do anything else, you need to handle the moisture issue. Sometimes this is as simple as purchasing a dehumidifier (about $200) and letting it rip.

If your moisture problems are more serious (i.e. leaks or puddles), you’ll need to employ a more aggressivebasement waterproofing strategy. Note: A basic waterproofing will run you $200-$500, but if any changes need to be made to your foundation, it can cost $2,000 or more. 

2. Add Some Area Rugs

Now that your basement is moisture-free, you can cozy up that concrete floor. Area rugs are a cost-effective way to do just that. If you happen to have a few unused rugs, put them to good use  downstairs (an eclectic look totally works, so don’t be afraid to mix and match). Tip: No extra rugs? No problem. We recommend using Amazon’s handy rug finder to locate a size, pattern and price that works for you.

3. Throw Down Some Pillows

When in doubt, add throw pillows. Even a second-string sofa with feel cozy if it’s covered with soft cushions. We recommend choosing ones that are pretty big for some extra comfort. These 20×20 Isabella Ikat pillows might do the trick, or maybe these 24” Knit Fringed pillows are more your style? Tip: If you like the bohemian look, try arranging on a bunch of throw pillows on your new, awesome rug.

4. Add Tasteful Lighting

Nothing kills the mood faster than a bunch of naked bulbs hanging from the ceiling. Make them irrelevant by adding lamps, string lights or both. You can find a lot of nice floor lamps for less than $50, like this IKEA lamp for $20.

5. Hide Unsightly Spots

It’s going to be hard to make that water heater in the corner look chic, but it’ll be easy to hide that ugly beast. Simply hang up a colorful sheet or even a shower curtain in front of it! If you want to help separate out different areas of your basement in a tasteful fashion, try a room divider. Wine crates, bookshelves and window frames all make good, cheap room dividers.

6. Paint the Ceiling

Those pipes, joists and air ducts definitely take away from your cozy basement vibe. But if you paint everything a dark color – like a charcoal gray – you can go a long way towards disguising all the stuff going on up there. Plus, it’s a lot cheaper than covering your ceiling with drywall ($4,000 or more). Note: Doing this yourself is very labor intensive, since a lot of the painting may need to be done by hand. There may also be some special considerations for electrical wiring or heating pipes. Unless you’re an experience painter (or are up for a challenge) we recommend hiring a professional for this.


Posted on December 31, 2013 at 5:45 pm
Shelia Simmons | Posted in Home improvement, Home ownership, Real Estate News |

Average US rate on 30-year loan rises to 4.47 pct.

Average U.S. rates for fixed mortgages rose slightly this week but remained near historically low levels.

SeattleTimes.com

WASHINGTON —

Average U.S. rates for fixed mortgages rose slightly this week but remained near historically low levels.

Mortgage buyer Freddie Mac said Thursday the rate on the 30-year loan increased to 4.47 percent from 4.42 percent last week. The average on the 15-year fixed loan rose to 3.51 percent from 3.43 percent.

Mortgage rates peaked at 4.6 percent in August and have stabilized since September, when the Federal Reserve surprised markets by taking no action on starting to reduce its $85 billion-a month bond purchases. The Fed decided this week that the outlook for the economy appeared strong enough for it to reduce the monthly bond purchases starting in January by $10 billion.

The purchases are designed to keep long-term rates such as mortgage rates low.

A government report issued Wednesday showed that U.S. builders broke ground on homes in November at the fastest pace in more than five years, strong evidence that the housing recovery is accelerating despite higher mortgage rates.

Data from the National Association of Realtors released Thursday showed the number of people who bought existing homes last month declined for the third straight month as higher mortgage rates made home-buying more expensive. In addition, the lingering impact of the partial government shutdown in October may have deterred some sales. Still, the Realtors' association projects that total U.S. home sales this year will be 5.1 million. That would be the strongest since 2007, when the housing bubble burst.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan declined to 0.6 point from 0.7 point.

The average rate on a one-year adjustable-rate mortgage rose to 2.57 percent from 2.51 percent last week. The fee increased to 0.5 point from 0.4 point.

The average rate on a five-year adjustable mortgage rose to 2.96 percent from 2.94 percent last week. The fee remained at 0.4 point.


Posted on December 24, 2013 at 5:19 pm
Shelia Simmons | Posted in Economic News, Home improvement, Real Estate News |

Homebuying First Step: Define What You Mean by ‘Home’

By Credit.com   | Posted Dec 12th 2013 3:56PM


Selecting the right home to fit your current and future needs can be challenging. One of the first decisions you'll make is how you define "home." There are many options including a single family residence, duplex, multiplex, condominium, modular or mobile homes.



Two of the most common choices are single family homes and condominiums. While this choice isbased on personal preference, you should weigh the pros and cons of each first.



A single family residence is what you may expect — a home suited for one family (not a duplex or multiplex) and all land within the lot.



A condominium is structured differently. Condominiums are multi-unit properties and often resemble an apartment complex. Each unit owner owns their unit and an interest in common areas that are shared with other unit owners. Common areas include swimming pools, roofs, elevators, walkways and any other areas shared by two or more people.



Proximity to Others

Condominiums are structured so that there are multiple units within one building. Oftentimes the only thing separating you from your neighbors is a single wall. Single family homes provide additional space between separating you and your neighbors with a yard.



Pros: If you are a social butterfly, enjoy meeting new people and want to build strong relationships with your neighbors, a condominium can provide you close proximity to multiple neighbors.

Cons: Depending on whom your neighbors are and what do they do, close proximity could cause problems. Does the guy next door play his drums at 2 a.m.? You'll want quiet neighbors when the only space between the two of you is a wall.



Single family homes provide additional distance between you and your neighbors. The space between can vary greatly from several feet to several acres.



Pros: Worry less about your neighbor's daily habits interrupting your quiet time. You can also feel more confident that your neighbors can't hear your every move.

Cons: It may be more difficult to develop relationships with neighbors when they are miles away. These relationships can come in handy when you need to borrow an egg, lawnmower or you need someone to watch the kids for a few minutes.



Association Rules and Fees

Condominiums and some single family homes participate in homeowner associations. Most commonly single family homes don't belong to a homeowners association (although this can vary depending on the area). The power to manage an association is placed with the board of directors, elected by unit owners. All owners within the association are members and pay the yearly association fees. The fees collected are used to maintain, repair and replace common areas.



The Pros of Belonging to an Association

• Common areas are maintained by the association. In condominiums, all property outside of the individual unit is maintained by the association. In single family homes all property shared by the members of the association is maintained.

• There is a governing body to assist in resolving neighborly conflicts and to remind members of the rules and regulations.



The Cons of Belonging to an Association

• Some associations have long lists of rules and guidelines that cover everything from what color you can paint your home to what type of fence you can purchase and install.

• You have to pay association fees on a monthly or yearly basis. These fees can vary greatly by location so be sure to ask about them.

• Associations can levy additional fees for unexpected repairs or maintenance issues.



Value

There are several things you should consider regarding the value of the property and many will be dependent on your specific area and the home itself.



The first question you should ask is whether the home will go up — or down — in appraised value over time. Purchasing a home in a sought-after location may help ensure your home will gain value over time. But you should be cautious here. If you are one of the first buyers you could run the risk of the area fading out before it fills up.



The condominium market has been doing very well the past few years. Condominiums are increasing in value over time at a faster rate than single-family homes, according to a recent Case-Shiller Index. But when looking at the longer term, it's uncertain if this gap will continue as it's a fairly recent development. Talk with your agent and discuss their predictions for your market.



In the end, only you will know best which type of property is suited to meet your needs. Know what you are dealing with before taking the homebuying plunge, and you can move forward with confidence.


Posted on December 13, 2013 at 7:06 pm
Shelia Simmons | Posted in Home ownership, Real Estate News |

Harvard: 5 Financial Reasons to Buy a Home

  


Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership – The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 

“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.

 


Posted on December 13, 2013 at 6:50 pm
Shelia Simmons | Posted in Economic News, Home improvement, Home ownership, Real Estate News |