Credit scores for millions of Americans may soon increase due to two major changes in credit scoring.
Starting July 1, the three major credit agencies — Experian, Equifax and TransUnion — are dropping certain negative information from credit reports, including tax liens and civil judgments.
This forthcoming change comes after FICO’s announcement last year that it has begun using wireless and cable bill payment history, along with utilities payments and background checks, to determine credit scores. The FICO XD aimed at individuals without a credit history and will also run from 300 to 850.
Tax liens and common obligations can have an important and negative effect on your FICO assessment. As indicated by FICO, in spite of the fact that the effect of a tax lien reduces after some time, its nearness on a credit report is “very serious.” Various FICO score simulations show that a tax lien could take upwards of 100 points off your score, making it hard to acquire credit or costly in the event that you do.
In the event that you have a tax lien or common obligation records on your credit report, the removal ought to have an important positive effect on your score. The change should occur on July 1 2017, and you ought to see a quick lift. You can track your VantageScore on free sites/apps like CreditKarma.
In honor of the Southern Maine Spring Market and all the new buyers, I thought it would be helpful to review a standard checklist on what to expect when purchasing a home in Maine. Depending on the location and type of property will determine the finer details of purchase. For this article, I will present a general checklist for buying a single family home:
Begin by understanding your finances – you will need to know what you can afford to pay monthly as well as determining how much money you will need for a down payment. Prepare a monthly budget to put everything into perspective. This budget should include EVERY expense each month.
Choose your Realtor – you want to choose a Southern Maine Realtor you trust. The cost to a buyer for their service is “FREE” and they will represent you and your best interest throughout the transaction. In many cases, your Realtor can refer you to a mortgage broker as well as other vendors throughout the entire transaction, this becomes your “Team of Professionals” that will help you along the way to successfully purchase a home you feel comfortable with. The Realtor acts as the “conductor” of the entire process from beginning to end just like in an orchestra.
Get Pre-approved before you start looking for a home – understanding what you can afford before you step into a property will make the process more smooth and straightforward.
Look for a home – after meeting with your Realtor, you now should have determined what your want, how much your willing to spend and where you want to look. Start house hunting!
Make an offer – working closely with your Realtor, they will help you understand what the best strategy is to offer on the property based the most recent sales in the area.
Under Contract – this is the most exciting moment for the buyer! Your Realtor will guide you through the all the timeframes that are important within your contract.
Inspection of home – by now, you are anxiously wondering what condition the home you are about to purchase is REALLY in. Your Realtor should be able to have a preferred vendor list ranging from home inspectors to air/water testing and everything in between when it comes time to inspect the home.
Obtain Homeowners Insurance – it is best to get a few quotes from various companies to get the most affordable and best coverage for your new home. Your Realtor should have referrals for you.
Pack and Move – If you plan to use a moving company, secure this early on in the process so you know how much you are going to pack and how much the company will pack and set the date. The rates vary depending on how much you pack yourself.
Final Walk Through – either 24 hours or an hour before the day of closing, walk through the home to make sure it is in the same condition it was when you last viewed it and all the repairs have been completed to your satisfaction, if applicable.
Closing – Once the title company receives your loan documents, you will receive a HUD statement which reviews in detail your fees and then amount of money needed for closing. In most cases the money need to close must be in the form of a cashiers check, so make sure you allow time to go to the bank prior to going to the closing. Your Realtor will arrange with the title company the day and time of closing where you will sign the loan documents.
Congratulations, you are now a home owner – After signing the documents, you get your keys and move in! If there is any personalization you want to make to the home, its best to do it prior to moving in if possible.
As I have said since the beginning, please call a local Maine REALTOR for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It’s best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.
If you are not sure if you will be in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell sooner than later.
2. Start by knowing your credit score.
Since you likely be getting a mortgage to buy a house, you should make sure your credit history is as clean as possible. A few months before you even start looking at homes, you should get a copy of your credit report. There are several companies that can provide you with a FREE credit report. Be sure to only use one company and only pull it once. Having you credit pulled frequently can alter the numbers in a negative way. Make sure the facts are correct, and fix any problems you discover.
3. Before house hunting, get pre-approved.
Getting pre-approved will allow you to better understand what your purchase power is. You will save yourself the grief of looking at houses you can’t afford. The difference between pre-qualification and pre-approval letters; pre-qualification is based on a quick review of your finances and pre-approval is based on your actual income, debt and credit history. You want to put yourself in the best position to make a serious offer when you do find the right home. Get Pre-Qualified here
4. Get professional help.
Even though buyers have unlimited access to home listings on the internet, most new buyers (and many more experienced ones) are better off using a professional agent. You should find an agent who is reliable, experienced and trustworthy and sign an Exclusive Buyer Representation Agreement. This will ensure they have your best interests at heart and can guide you through the process from beginning to close. This is where you build your TEAM of professionals to successfully help you buy a home. Click here for a Southern Maine Real Estate Agent
5. Purchase a home you can afford.
It is important to work closely with your mortgage lender to determine what your purchase power is. You can also utilize one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
6. Understand there are many different types of loan programs.
There are a variety of different lenders who offer different loan programs. When one lender says no, another can say yes! There are plenty of low-interest mortgages that require little to no down payment.
7. Buy in a town with good schools.
In most areas, this advice applies even if you don’t have school-age children. For re-sale purposes, understand that strong school districts are a top priority for many home buyers who do have school-age children, which boosts home property values. Southern Maine Property Seach.
8. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points in exchange for a lower interest rate. Points are an upfront portion of the interest that you pay at closing. If you stay in the house for a long time, typically 3-5 years or more, it’s usually a better deal to pay down the rate with the points which will save you more in the long run.
9. Do your homework before making an offer.
This is where you work closely with your buyer agent to understand the sales trend of similar homes in the neighborhood. So before making and offer, consider sales of similar homes in the last 3-6 months. Again, your buyer agent is the expert and can guide you with how to make a great offer.
10. Hire a home inspector.
It is imperative to have a neutral party inspect the home to help you get familiar with all the systems of the home and to determine the condition and quality of them. Their job will be to point out potential problems that could require costly repairs down the road.
If you are looking to buy/sell a home please call me.
Another year has passed, and while the last 5 of them have been rough for the housing market, we’ve now seen two consecutive quarters with most states showing incremental appreciation. Cause for celebration? Perhaps not, yet this is beginning to look like stabilization and that of course is the first step towards recovery.
What’s working in favor of prospective home buyers?
In a word – Affordability – Since 1963, it has cost an average of approximately 43% of “per capita” income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now it’s less than half that cost, and in many areas the monthly housing payments are less than an equivalent rental.
You can lock in your mortgage cost for life – Imagine if you could have locked in the price of gas back in 2001 when it was only about $1.50 per gallon or less? Think about that the next time you’re standing at the pump filling your tank with $4 gas. How smart would you feel if you knew your cost was forever lower? When it comes to a place to live, that same kind of opportunity is staring us in the face right now. Record low prices and record low rates are here now and plentiful. The beauty of a 30 year fixed rate loan is that it’s a 30 year fixed rate loan. If you lock it in now, it will never go up.
There is still uncertainty – yet there is also clarity that comes from knowing where things stand at present such as rates & prices. Above all else, the state of the market doesn’t change the fact that we need a place to live. Choosing to purchase is one of two options. The other one is to rent or to continue living with family if that’s where you are now.
The trouble is – renting amounts to little more than paying your landlord’s mortgage and in the end, there is nothing to show for that. Living at home gets old at the same rate as we do. The day comes when it’s time to leave and there’s never been a less expensive opportunity to do that than now. At some point, rates will rise and so too will prices. Being ahead of or behind that curve is all dependent on the action you choose to take today.
Real Estate Agents in Maine are finding new ways to generate business everyday Online. Studies indicate that over 80% of today’s home buyers visit the Internet long before seeking the professional assistance of a Real Estate Professional.
Below are some popular sites to visit and become familiar with their features and benefits.
Property Listings & More
1) Redfin.com: In addition to listings, this site offers information such as how long a home has been for sale, its last sales price, and its current value. It also provides virtual tours to listed homes.
2) Trulia.com: Like Zillow.com, which offers satellite views and the estimated values of each home, Trulia’s “heat maps” show how hot or cold an area is based on prices, sales, and popularity among its users. Trulia.com also has free tools real estate agents can easily add to their own websites to increase functionality and traffic.
3) Maps.Google.com and Bing.com/maps: For a bird’s-eye view, even 360 degrees in some cases, these amazing map sites offer a virtual perspective of available homes that’s truly hard to beat.
4) Walkscore.com: Is an interesting site that rates any address based on the walking distance of its nearby stores, restaurants, schools, parks, coffee shops etc.
5) SchoolMatters.com: A Standard & Poor’s company, this site offers parents (and potential home buyers) an objective rating of public schools and public school districts by region, including test scores and demographics. GreatSchools.net offers similar info and ratings on private schools based on region.
Government Websites: Government loan programs offer great opportunities for many consumers in many regions across the country, especially first-time buyers and veterans. The following websites are likely one of the first of many sites potential home buyers visit during this process:
1) HUD.Gov is the official website for the U.S. Department of Housing and Urban Development (H.U.D.) This site lists HUD homes and provides information for home buyers, including financing options and home buying programs available through the Federal Housing Administration (FHA).
2) Homeloans.va.gov: This site houses information about government home loan programs specifically for veterans.
Contact me if you think of any more sites I should add to my list. I look forward to developing ways that we can grow our business together.