Real Estate Exchange

 How can I increase my FICO score?

• Focus on the negative factors provided with your FICO score. These represent the main areas where your score could be higher.

• Apply for and open new credit accounts only as needed. Don’t open accounts for the purpose of providing a better credit picture – it probably won’t raise your FICO score and, in some instances, may even lower your score.

• Pay off your bills on time. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO score.

• If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your FICO score should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever. The impact of past credit problems on your FICO score fades as time passes and as recent good payment patterns show up on your credit report. And good FICO scores weigh any credit problems against the positive information that says you’re managing your credit well.

• If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This will not improve your FICO score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO score.

• Keep balances low on credit cards and other “revolving credit”. High outstanding credit card debt can negatively impact your FICO score.

• Pay off debt rather than move it around from one credit card to another. The most effective way to increase your FICO score in this area is by paying down your total revolving (credit card) debt.

• If you have had problems in the past, re-establish your credit history by opening new accounts responsibly and paying them on time.

• Manage credit cards responsibly by keeping balances well under the credit limit. In general, having credit cards and installment loans (and making timely payments) will raise your FICO score. People with no credit cards, for example, tend to be higher risk than people who have managed credit cards responsibly.

• Do your rate shopping for a loan within a focused period of time. FICO scores distinguish between a search for a mortgage or auto loan, where it is customary to shop for the best rate, and a search for many new credit cards.

• Don’t close unused credit cards as a short-term strategy to raise your FICO score. This approach could backfire and actually lower your FICO score.

• If you have been using credit for only a short time, don’t open a lot of new accounts too quickly, as rapid account build-up can look risky to a lender.

*Information provided by FICO.com

1.  Price it right.  Set a price at the lower end of your property’s realistic price range.

2.  Get your house “Market-Ready” for at least two weeks before you begin to show it.

3.  Be flexible about showings.  It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.

4.  Be ready for the offers.  Decide in advance what price and terms you’ll find acceptable.

5.  Don’t refuse to drop the price.  If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.

Credit Union Consumer Facts.
http://www.cuna.org/data/consumer/advice/retire_home/hometoc.html

EnergyGuide.com
Provides an easy way to assess energy use and get quick tips on saving energy.

Environmental Protection Agency, www.epa.gov
A one-stop shop for advice on testing for a nd mitigating pollutants, from lead paint to radon to mold.

Equifax, www.equifax.com
A Source of credit reports.

Experian (Formerly TRW), www.experian.com
A Source of credit reports.

Federal Citizen Information Center,
http://www.pueblo.gsa.gov/results.tpl?id1=17&starta=1&–woSECTIONSdatarq=17&–SECTIONSword=ww

Ginnie Mae, http://www.ginniemae.gov
Provides advice to buyers on affordability and homeownership, including calculators.

U.S. Department of Housing and Urban Affairs, http://www.hud.gov/buying/index.cfm
Offers advice to buyers on finance, fair housing, and more.

ImproveNet, www.improvenet.com
Provides links to contractors and architects for remodeling projects for buyers and repair services for sellers.  For a small charge, buyers can use the site’s estimators to determine how much renovating a property they’re considering would cost.

Moving.com
Helps buyers and sellers with packing tips and timetables, online mover links, and places to store belongings so that homes look less cluttered.

REALTOR.com
Offers consumer information for buyers and sellers as well as home listings and links to service providers.

Real Estate Buyer’s Agent Council (REBAC), http://www.rebac.net/hbk.html
Offers a homebuyer’s kit with useful information and checklists

Trans Union Corporation, www.transunion.com
A source of credit reports.

*Reprinted from Realtor Magazine Online

1.  Price it right.  Set a price at the lower end of your property’s realistic price range.

2.  Get your house “Market-Ready” for at least two weeks before you begin to show it.

3.  Be flexible about showings.  It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.

4.  Be ready for the offers. Decide in advance what price and terms you will find acceptable.

5.  Do not refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.

*Reprinted from RELTOR Magazine

If your income and savings are making home-buying a challenge, consider these options:

1. Investigate local, state, and national down-payment assistance programs.  These program’s give loans or grants to cover all or part of your required down-payment.  National programs include the Nehemiah program (http://www.getdownpayment.com) and the American Dream Down-payment Fund from the U.S. Department of Housing and Urban Development (http://www.hud.gov).

2. Get the seller to provide financing.  In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you do a mortgage.

3. Consider a shared-appreciation, or shared equity, arrangement.  Under this arrangement, your family, friends, or even a third-party may buy a portion of the home and thus share in any appreciation when the home is sold.  The owner/occupant usually pays the mortgage, property taxes, and all maintenance costs, but all investors’ names are usually on the mortgage.  There are companies that can help you find such investors if your family can’t participate.

4. Get help from your family.  Perhaps a family member will loan you money for the down-payment and/or act as a cosigner for the mortgage.  Lenders often like to have a cosigner if you have little credit history.

5. Lease with option to buy.  Renting the home for a year or more will give you the chance to save more toward your down-payment.  And in many cases, owners will apply some of the rental amount toward the purchase price.  You usually have to pay a small, nonrefundable option fee to the owner.

 6. See if you can qualify for a short-term second mortgage to give you the money to make a higher down-payment.  This may be possible if you have a good income and little other debt.

*Reprinted from REALTOR Magazine

Be Sure That:

Repairs you’ve requested have been made. 

Obtain copies of paid bills and any related warranties. 

All Items that were included in the sale price—draperies, lighting fixtures—are still there.

Screens and storm windows are in place or stored. All appliances are operating. Intercom, doorbell, and alarm are operational. Hot water heater is working. HVAC is working.

No plants or shrubs have been removed from the yard. Garage door opener and other remotes are available.

Instruction books and warranties on appliances and fixtures are there. All personal items of the sellers and all debris have been removed.

*Reprinted from REALTOR Magazine 

1.    Decide how much home you can afford.  Generally, you can afford a home equal in value to between two and three times your gross income.

2.    Develop a wish list of what you’d like you home to have.  Then prioritize the features on your list.

3.    Select three or four neighborhoods you’d like to live in.  Consider items such as schools, recreational facilities, area expansion plans, and safety.

4.    Determine if you have enough saved to cover your down payment and closing costs.  Closing costs, including taxes, attorney’s fee, and transfer fees average between 2 percent and 7 percent of the home price.

5.    Get your credit in order.  Obtain a copy of your credit report.

6.    Determine how large a mortgage you can qualify for.  Also explore different loan options and decide what’s best for you.

7.    Organize all the documentation a lender will need to pre approve you for a loan.

8.    Do research to determine if you qualify for any special mortgage or down payment assistance programs.

9.    Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable. 

10.  Find an experienced REALTOR who can help you through the process.

1.    How long have you been in residential real estate sales?  Is it your full-time job? (While experience is no guarantee of skill, real estate, like many other professions, is mostly learned on the job.)

1.  A real estate transaction is complicated.  In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlements.  A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.

2. Selling or buying a home is time consuming.  Even in a strong market, homes in our area stay on the market for an average of 120 days.  And it usually takes another 60 days for the transaction to close after an offer is accepted.

3.  Real estate has its own language.  If you do not know a CMA from a PUD, you can understand why it is important to work with someone who speaks the language.

4.  REALTORS have done it before.  Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase.  And even if you’ve done it before, laws and regulations change.  That’s why having an expert on your side is critical.

5.  REALTORS provide objectivity.  Since a home often symbolizes family, rest, and security, not just four walls and a roof, home selling or buying is often a very emotional undertaking.  For most people, a home is the biggest purchase they’ll ever make.  Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.

6.  REALTORS are members of the NATIONAL ASSOCIATION OF REALTORS, a trade organization of more than 1 million members nationwide.  REALTORS subscribe to a stringent code of ethics that helps guarantee the highest level of service and integrity.

Reprinted from REALTOR Magazine