How Are Credit Scores Calculated?


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One of the most important facets of buying a home when applying for a mortgage is your credit score. With a low score, it is impossible to get a loan with a good interest rate, if at all. So buyers need to guard and work on keeping their credit score as high as possible.

It is possible to raise it, though it may take some time. Here are some guidelines and information that will help you understand the complexity, and what to do to ensure you get a premium rate.

How Credit Scores Are Calculated

What makes a good credit score? What factors do credit reporting bureaus consider most when generating scores? Unless recent bankruptcies, collection accounts or outstanding tax payments are involved, the following criteria is generally accurate:

35% Payment History– Recent delinquencies bring scores down more than those in the past.

30% Balance– High balances over 75 percent of the available credit limit hurt credit scores. Small balances on multiple cards are more favorable than one maxed-out card.

15% Credit History– 3 to 5 lines of credit, and a loan with a long history is best.

10% Type of Credit– Furniture and appliances stores’ “pay later” credit lines are less favorable and considered higher risk.

10% Number of Inquiries– These cost 5 to 15 points off your credit score per inquiry. Mortgage inquiries don’t count as long as they are within 14 days of each other.

Do you need to do repairs to sell your home?

Say you’re a homeowner wanting to sell your two-story, detached home. You sit down and make a list of things that need to get done to make your property as attractive as possible to buyers.

You consider the backyard. “Hmm,” you think. “Doesn’t our deck need a new finish and our flowerbed need new edging stones?”

Then you think about the living room. “The carpeting is old. We really should replace it.”

Then you step into the kitchen and think, “Our kitchen cabinets look worn. We should get a contractor to quote on replacing them. Maybe we should install a brand new shiny sink and faucet too. That should increase the resale value of our home, shouldn’t it?”

Before you know it, you have a long list of updates, repairs and renovations that you think should be done before listing and you haven’t even reached the second floor!

It’s easy to get carried away with a list of repairs and upgrades that need to be done to prepare your home for the market. But, you don’t want to end up spending more money than you’ll ever get back from the eventual sale. So, how do you determine what improvements you should be making in order to get your property ready to be listed?

That’s easy. Talk to a good REALTOR®.

A REALTOR® can inspect your property and advise you of the repairs and upgrades you need to make. A REALTOR® will know what buyers are looking for, and will also have a good idea of the return on investment you can expect from a particular improvement.

A REALTOR® may also be able to recommend reputable tradespeople and other professionals to assist you in making those improvements.

So go ahead and make that long list. Then, let’s review it, so you can make an informed decision on how to get your property ready for sale.

Predicting the Future

Predicting the Future

Predicting the future when it comes to interest rates is virtually impossible because the market fluctuates daily and many variables factor into market movement.  But borrowers want the lowest possible interest rate on a mortgage so to some, it makes sense to hold off locking in an interest rate in hopes of getting the ultimate deal.

The monthly savings on a $150,000 loan amount at 4.75% and 4.5% for 30 years is $22.44, and while that may sound insignificant up front, the difference for the whole 30 years of the mortgage is approximately $8,000, which is a considerable sum.

Though it is impossible to predict what will happen next week, tomorrow, or even the same day, trying to outsmart the market is gambling and carries substantial risk. It’s important to check-in with your lender several times throughout the transaction and see when they feel it is optimal to lock-in to prevent delays and any hassle further down the line.


**The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice

Interest Rates Increase


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The Federal Reserve voted unanimously on Wednesday to raise interest rates by a quarter point.  This is the first increase in over nine years. The bank raised its fed funds rate to a range of 0.25% to 0.5%, ending an unprecedented seven-year run of near-zero interest rates. The vote was unanimous 10-0.

The board of directors also raised the discount rate to 1% from 0.75%. The Fed said it will “carefully’monitor” actual inflation in light of ‘current shortfall.” And given current economic conditions, the bank said interest rates will most likely increase in a “gradual” manner, ending up at a long-run target of 3.5%. That was unchanged from its September forecast.

Source: The Wall Street Journal



**The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy.

Buying Real Estate Before the end of the Year


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As we near the end of 2015, many home buyers are scrambling to find the right home.  There are many reasons purchasing a home makes sense, and additionally so before the end of the year.  Although the time is running out, it is still not too late to enjoy the benefits.  Here are some of the reasons you may want to consider.

1/ Sellers may be Motivated to accept a lower bid in order to meet their end-of-the-year goal and enjoy tax savings on their next home.

2/ Tax Benefits–If you close by December 31, there are several deductions you can take: mortgage interest, property taxes, points on the loan and interest costs which are significant the early years of paying off a loan when you are paying more interest.  It’s important to speak to a tax expert to fully understand these benefits.

3/ New Builder incentives can be at their highest–Many builders increase their perks to meet their quotas and close out the year.  This could be substantial from paid closing costs to dream kitchens and other goodies.

4/ Building your financial future–over the years, real estate investment has been a great way to build financial wealth.  With the downturn in the market in 2006, when many people lost their homes and fortunes in the stock market, there was an overall fear in purchasing a home, but the entire economic system was put to a test, not just the real estate market.  Stocks fell, economists feared the worse–and people scrambled to hang on.

Now, as we see the market rise and continue to rise, we are once again reminded that over the years, real estate investment (though not 100% guaranteed the same as many other investments) is a great way to build your wealth.  Today, people across the nation are building their wealth by investing in purchasing properties.

If you rent, you are not going to appreciate any benefit from this, granted you need a place to live, but at the end of your lease, you do not get any benefits back on your hard earned and spent money.  But by purchasing a home, you have the opportunity to gain equity–if the home prices continue to rise, you can come out ahead when it is time to sell, and eventually have money for retirement or other financial goals.  And remember, as the value of your home rises, so does the rate of appreciation.

Always speak to a real estate professional when planning to purchase a home.  After 26 years of helping buyers into homes, I love the process, the gains, and helping people realize their dreams of home ownership.  I am available anytime to be your personal real estate professional!

Buying a Foreclosed Home — the Ins and Outs of It


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Recently, one of my customers asked me if it was difficult to buy a foreclosed home.  I thought everyone could benefit from my response.

Here it is:

Buying a foreclosed home is not difficult at all, as long as the property is already on the market. In fact, in many cases it is easier because there are no emotional ties involved on the part of the seller, only the bottom line.
Be aware that many banks hold onto foreclosed homes for several years before putting them on the market so not to inundate it–that is why sometimes you will see homes listed as foreclosed or in pre-foreclosure, on sites such as Zillow and many others –before they are actually available.  There is no way of finding out how long this time period may be, so if it isn’t on the market, my advise is not to wait.

At times, an REO (real estate owned property ie: foreclosed) is priced below comps.  Bear in mind that banks are not in the business to lose money or to hang on to property.  Pricing below comps is sometimes a strategy to procure multiple offers and often results in a sales price well over the listing price.  Usually, the banks have already conducted three BPO’s (Broker Price Opinions–I used to do these and they are similar to appraissals) and one full blown appraissal, so they know exactly how much a property should go for, and this is what they hope to sell the property for. I can tell you what the market value is and we can go from there.  At times, you may get a few thousand off, but no different than regular sales any more.  We can discuss on a per property basis.

If you are purchasing any property and mortgaging it, the bank will require an appraissal, so the property must qualify for you to be able to buy it with the mortgage, unless you put the difference up in cash.  And this is covered in the Florida Real estate contract.  The bank will always have addendums and these superceed the Purchase and sale contract, so as your Realtor, I’ll make sure everything is in order.

Hope this helps.  When working with me, I will always look for the best value and advise you with my 26 years experience.

Pros and Cons of a Bi-Weekly Mortgage

Pros and Cons of a Bi-Weekly Mortgage Program
When borrowers enter into a contract to make bi-weekly payments on their mortgage, the amortization schedule is accelerated. For example, with a 30-year amortization schedule, the borrower makes 12 payments per year. In a bi-weekly arrangement, the borrower makes 26 ‘half’ payments, which allows the loan to be paid off in 22.8 years instead of 30 years. It’s the same as making 13 monthly payments.

This ultimately saves the borrower thousands of dollars in interest rate fees. However, bear in mind that bi-weekly programs usually have some type of setup, transaction, and maintenance fees associated with them. A custodian manages the bi-weekly payments in a trust account (and also makes a profit on the interest accrued there). Because the lender really doesn’t accept partial payments, this middle man is still making monthly payments to the lender on some type of pre-payment schedule.

It is important for the consumer to know that the same results can be achieved without hiring an outside company to do this. As long as your loan program carries no pre-payment penalty, pre-payments can be made on a monthly or annual basis to shorten the loan term to save money on interest or remove PMI charges on loans that have less than a 20% down payment. The borrower simply needs to indicate the extra payment is being made toward the principal balance, and have the discipline to make these extra payments as scheduled.

Are ALL Realtors and Real Estate Professionals the same?

That’s like asking if all the colors of the rainbow are the same.  NO!  Every hue has it’s own frequency and characteristics.  This is also true for Realtors and real estate professionals.  Everyone is different and comes with their own experience and knowledge-base, work ethics–you get the point.

So how do you choose the one best suited to work with?  One that will offer the best advice, the most knowledge.  Best customer service….

As you know, there are no guarantees that you will be happy with the services the Realtor you are working with will provide you with.  Over all, a Realtor is supposed to adhere to a code of ethics and must have a certain level of knowledge before obtaining their license, but as in any relationship, there are some that work and others that do not.  It’s always a good idea to interview a Realtor.

As a valued customer of future client, I’d like to make you this promise:

As your personal real estate professional, I will always be on top of the entire transaction overlooking the details and gears that make your home search and purchase run smoothly.  I offer my customers premium service, will always treat every consideration as though it were mine personally, and am always upfront with my observations and specific details of importance that my 26 years experience allows.
I offer testimonials on my website, and am always open to giving additional references.

Here’s hoping to working with you!


Montana Holt

Preparing to Buy a Home?

Buying a home can be a time-consuming process…and that’s not even counting the house hunting part! But buyers can save themselves time (and headaches) by creating a file folder with information they’ll need handy when they are ready to apply for a loan.

Here are just a few items buyers should keep in their file folder, so they’ll have everything easily accessible when they’re ready to make an offer:

A list of previous addresses for the past two years, and if they were renting, the name(s), address(es), and phone number(s) of their landlord(s).
W-2 forms for the last two years. If they are self-employed or their income is based on commission, they’ll need their tax returns for the last two years complete with schedules and a year-to-date profit and loss statement.
Paycheck stub for the last 30 days
Account number(s), balance(s) and monthly payment(s) for all outstanding creditors (including credit cards, car loans, student loans, etc.)
Bank statements for the last two months, and their most recent asset account statements (i.e., stocks, 401K, etc)

Buyers shouldn’t wait until they’ve found a house to start gathering all the information they’re going to need. Creating a simple file folder with this information now…and keeping it updated as their house hunt progresses…will be something they thank themselves for later.