Real Estate Taxi » debt

7 Tips to Improve Your Credit for First Time Buyers

Walter G — Fri, 17 Apr 2009 17:22:29 +0000

First Time Buyers naturally don’t have much credit history to back them for a mortgage. Their Credit score, along with their overall income and debt, are big factors in determining whether they’ll qualify for a loan and what their loan terms will be.

It’s very important to note that raising your credit score takes time and there is no quick fix. Most of the time the quick-fix efforts tend to backfire. You need to show responsibly in managing your credit over time.

First Time Buyers Credit Score

First Time Buyers need to understand that they have plenty of company. There are millions of people in the United States with blemishes on their credit, which makes obtaining loans reasonably difficult. I am here to tell you that there are ways to improve your score and reverse some of the damage that has been done.

You need to do some basic housekeeping to get started. Get a free copy of your current credit report, review it completely for any mistakes and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

Once that’s accomplished, you can improve your credit score by using the following 7 Tips:

1. Pay down credit card bills

If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score. Delinquent payments can have a major negative impact on your score and the longer you pay your bills on time, the better your score.

2. Keep debt to a minimum

Keep your credit card balances low. High debt-to-credit-limit ratios drive your scores down. Don’t close unused accounts, because a zero balance might help your score. Don’t open new accounts to have a zero balance because that doesn’t work the same way, it will lower your score

3. Don’t rush to apply for mortgages

You need to wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

4. Wait on buying big-ticket items

Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.

5. Don’t expand your credit range

Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score. Maxing our your credit cards could lower your average score by as much as 70 points.

6. Space out your Applications

Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

7. Stay away from Financing Companies

Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor debt management.

Best of luck from Walter Grande Licensed Real Estate Saleperson

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Real Estate Terms starting with (D)

Walter G — Mon, 06 Apr 2009 18:59:29 +0000

The Following are real estate terms and topics: Starting With the Letter ( D)

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Are you confused and overwhelmed by the extensive terms and words used in real estate? Every person working in real estate or planning to buy or sell real estate can benefit from learning some of the terms….

Real Estate Terms D

Debt
Debt is that which is owed; usually referencing assets owed. Debt is a means of using future purchasing power in the present before a summation has been earned.

Deceptive Trade Practices Act
A federal law that allows an individual to sue a provider of goods or services for fraud or misrepresentation.

Deed
The legal document conveying title to a property.

Deed-in-lieu
A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. The borrower) conveys all interest in a real property to the mortgagee (i.e. The lender) to satisfy a loan that is in default and avoids foreclosure proceedings.

Deed of trust
It is very similar to a mortgage. The document used in some states instead of a mortgage; title is conveyed to a trustee.

Default
Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

Delinquency
Failure to make mortgage payments when mortgage payments are due.

Deposit
A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

Depreciation
A decline in the value of property.

Dower
Dower was a provision accorded by law to a wife for her support in the event that she should survive her husband. It was settled on the bride by agreement at the time of the wedding, or provided by law.

Down payment
Down payment is a term used in the context of the purchase of expensive items such as a house, whereby the payment is the initial upfront portion of the total amount due and it is usually given in cash at the time of finalizing the transaction.

Due-on-sale provision
A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.

Due-on-transfer provision
A provision in a mortgage that allows the lender to demand repayment in full if the borrower transfers the property to another.

8 Means to Getting Your Funds in Order

walter p — Wed, 04 Mar 2009 21:54:01 +0000

Excerpt from Realestatetaxi.com’s upcoming ebook. Check the products section in the upcoming weeks or subscribe to our mailing list for further information.

. You need to figure out where you spend your money and the best way to do that is with the aid of saved receipts or a good brainstorming session. You then can create a budget according to what you have habitually spent on in the past 6 months for instance. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

Funds

1. Create a family budget

2. Cut down on your debt. Your mortgage will typically range between 25 percent and 28 percent of your income and generally speaking lenders look for a total of no more than 36 percent. This allots you to cut down on your other debts (such as car loans, student loans, credit card balances) down to 8 to 10 percent. The other steps will help in accomplishing that.

3. Manage your expenses. This means pay attention to the small stuff your spending your cash on because we all know they add up. Remember a penny saved is a penny earned. You can save over 1,000 bucks a year if you stop picking up that Starbuck’s coffee everyday and even more if you bring your own lunch to work. Try writing down everything you spend for one month and come up with cheaper alternatives.

4. Increase your income. You might want to see different avenues where you can generate more income whether it be a second job or your spouse picking up one. If part time and full time jobs aren’t your thing I suggest you pick up “Making a Living without a Job: Winning Ways You Create Work that You Love” by Barbara Winters. A lot of good insights.

5. Save specifically for a downpayment. Aiming for a 20 percent down payment should be the goal here. Even though it’s possible to get a mortgage with only 5 percent (or in some cases less) down, you usually get a better rate and a lower overall cost if you put down more.

6. Create a separate house fund. Don’t just plan on saving whatever’s left toward a downpayment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills. Better yet take a percentage out of your paychecks just like the government does. Makes it less painful.

7. Withstand your job. Showing that you have a secure job (having a job for more than two years) will help lower your interest rate. Having a job for less than two years may mean you have to pay a higher interest rate.

8. Establish a good credit history. This is the easiest step to follow but also the easiest to mess up. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly. Don’t shoot yourself in the foot!