Mortgages

Improve Your Credit, Avoid These Things

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When you’re purchasing a home, your credit score matters. After all, your score will play a major role in whether or not you will get approved for a mortgage at a rate you can afford.

But, what if you need to improve your credit prior to applying for a mortgage? Many potential homeowners find themselves in this position and as such, need to know what to do (and what not to do) to boost their credit. And in this article, we discuss the top five mistakes to avoid when you’re looking to boost your credit. Let’s get started!

 

  1. Cancel Old Credit Cards/Request Limit Reductions

Did you know that 15% of your credit score is determined from the length of your credit history? It is and as such, cancelling old cards will make it seem as if you have more debt than you actually do (because your amount of available credit will decrease).

Relatedly, you shouldn’t request to decrease your limits either. Doing so will also make it appear as if you have more debt than you do, having the same impact as cancelling old cards.

 

  1. Staying Current on Only Some of Your Cards

We all have months where we must prioritize where we spend our money to pay off debts but you can’t fall behind on your cards! Approximately one third of your score is determined by whether or not you pay your cards on time and as such, it’s vital to stay current on every card.

 

  1. Having Too Much Credit

Was there a point in your life where you had to open credit cards to balance all of your purchases? Doing so may not seem like a big deal at the time but unfortunately it will influence your overall credit score.

If you have too much credit, you may be viewed as a risk because you could accumulate a significant amount of debt rather quickly. As such, you should avoid signing up for new cards (particularly impulse decisions at stores for discounts) since doing so will further jeopardize your chances of receiving an attractive mortgage.

 

  1. Maxing Out Credit Cards

You never want to reach your credit limits when managing your debt. After all, maxing out cards will negatively affect your credit, even if you’re staying current on your payments.

Don’t buy what you don’t need. Doing so will help you pay down the cards and manage your debt more effectively (especially when you’re looking to improve your credit score.

 

  1. Never Avoid Opening Cards or Securing Loans

Some individuals have the opposite problem than many others: They don’t have enough credit to build up their score. As such, it’s important to not fear cards or loans and instead, open and use them effectively.

For example, you may want to open one credit card for a store you shop at regularly. By using it on a frequent basis and paying it off each month, you’ll build credit that will give you a much better deal once you’re ready to purchase your home.

 

United Real Estate Can Help You Purchase Your Home

If you’re building credit in the hopes of purchasing your first or next home, the team at United Real Estate can help!

Since 1925, our team has worked across the United States to provide guidance, support, and expertise to homeowners just like you. Contact us to begin the search for your home, today!

Get Your Credit Mortgage Ready

The path to homeownership can be stressful and often difficult. If you have less than perfect credit history, the obstacles might be even greater. Even if your credit is good, there are a few red flags that might prevent you from getting a mortgage (or the mortgage rate/type) that you are hoping for. Below is a list of items that can hinder the process of obtaining a mortgage:

Don't leave your credit score up to chance.

Don’t leave your credit score up to chance.

  • Bankruptcy– Some mortgages will work with a past bankruptcy. But you usually need to be several years past the discharge date and have rebuilt your credit. A bankruptcy, even when discharged, can stay on your credit report for up to ten years.
  • Foreclosure short sale – Some mortgages will work with a past foreclosure short sale. But you usually need to be several years past the sale date and have rebuilt your credit. Even when finalized, a foreclosure short sale can stay on your credit report for up to seven years.
  • Unpaid judgments– No mortgage lender wants to take the risk that an earlier debt could take precedence over their loan. All judgments must be satisfied, removed or vacated from your credit report. And, if paid, your judgment will stay on your report for seven years. Solve open judgments. Try to vacate them first or pay them and get proof that they’re paid. Yes, I know it hurts to take money out of your hard-earned down payment savings account. But that down payment won’t do you a bit of good if you can’t get a mortgage because of an old judgment from the cable company you fought with in your first apartment.
  • Open collections– If you don’t pay a bill, the company you owe may sell your debt to a collection agency who will try to get you to pay. ONLY PAY THEM OFF IF YOU ARE TOLD TO DO SO. Keep in mind that paying a collection will not raise your credit score, but LOWER YOUR SCORE. Once a debt has gone to collections, your credit is hit and can only recover over time.
  • Too much monthly debt– A good rule of thumb is that if you’re paying more than 5 percent of your gross monthly income for debt payments (credit cards, student loans, car payments, personal loans), you’re decreasing the amount of mortgage you’ll be approved for. If your income is high and housing prices are reasonable, high debt might not hurt you much. But if you have a modest income, debt can price you right out of a mortgage.
  • Pay your current bills on time, religiously – You’ll need the boost to your credit score if you’ve had problems in the past. And you’ll want to prove to a lender you’ve gotten past old issues and made a fresh start in rebuilding your credit.
  • Make sure the problems are right – If not, you must dispute them off. Experts disagree about how many people have serious errors on their credit reports, but I have witnessed a client who discovered that someone had posed as his spouse after finding lots of strange information on his credit report. Don’t pay the price for someone else’s mistake.

This piece is guest written by our partner, Credit Law Center (CLC). CLC helps clients achieve financial success by cleaning up their credit history and putting them on track for financial freedom. Contact them today at (800) 994-3070 or by visiting creditlawcenter.com.

What to Know Before Using Gift Money as a Downpayment

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    Can you use gift money for a downpayment?

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Between its inception in 2008 and the end of 2013, crowdfunding- “the practice of raising funds from multiple individuals via the web”- became a $5 billion industry, according to a 2013 study by the World Bank.

While crowdfunding campaigns have been used for everything from producing a new product to making potato salad (seriously, the guy raised $55,000), they are now being used for something much more personal. People nationwide are now turning to crowdfunding sites to help them buy a house.

Many of these sites are targeted toward couples about to tie the knot. They work much like traditional wedding registry sites in that the couple registers online, creates a list of options for their guests to purchase, and then shares the site with their friends and loved ones. But instead of a toaster, the options include things such as $150 toward closing costs or $300 toward a down payment.

There are other sites that are more targeted to those already in their home and looking to renovate or remodel. Users can upload pictures or blueprints to share their vision with their friends and family and add options such as $100 for paint or $200 for a new fridge.

While this may be a good option for some, there is also debate over the tactfulness and even the legality of using others to fund your new home purchase.

Here are a few things to keep in mind when working with customers who have or are considering using these sites.

  • Gift funds must be properly documented when using them toward a down payment.
  • You will not qualify for a tax deduction for contributing to one of these sites. It is a gift, not a donation.
  • The money may be required to sit at the bank for 60 days before it can be used- just like cash would.

This is a guest post from our friends at Supreme Lending. Learn more about what their offering at SupremeLending.com.

http://www.infodev.org/crowdfunding

http://blog.credit.com/2014/08/can-you-crowdfund-your-mortgage-93992/

Can People Still Buy a Home with No Money Down?

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Although it’s highly unlikely, yes – it is still possible to get a home without a down payment.  Prior to the mortgage crisis and recession, many lenders offered mortgages without any down payment. Some lenders even allowed consumers to borrow up to 105 percent of the home’s purchase price so they could finance their closing costs.  While we all know that mortgage requirements are much stricter, there are still loan options that can make homeownership a reality.

Today, a handful of government sponsored programs allow consumers with good credit and a steady income to buy a home. Here’s the low-down on loans with low/no down payment requirements.

VA Loans

These loans are only available to veterans, current members of the military and their spouses. While these loans don’t require a down payment or mortgage insurance, there is a funding fee that can be wrapped into the loan.

USDA Rural Development Loans

The U.S. Department of Agriculture offers loans to those with qualifying credit scores and income levels. Candidates for these loans must be able to afford payments but have a low or moderate income. Additionally, you must purchase a property in a designated area. These loans are primarily designed to help low-income families in rural areas purchase homes.

FHA Loans

Insured by the Federal Housing Authority, FHA loans come with a minimum down payment of 3.5 percent. FHA charges an upfront premium and additional premiums each month. The standards are usually pretty lenient but a series of guidelines are published and will give you exact eligibility requirements.

If you are interested in getting approved for a loan or learning about types of loans available,
contact our preferred mortgage partner – Supreme Lending. Their team is passionate about helping consumers make homeownership a reality.

Pre-Qualified vs. Pre-Approved: What’s Really the Difference?

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As a first time homebuyer, getting a mortgage might seem a bit daunting. As you navigate the approval process, don’t be confused, a pre-approval is much different than being pre-qualified.

Here’s the skinny:

Pre-Qualified

This term refers to a general review of your finances and a recommendation of what you can afford. In a conversation with a banker, you would review your income, debts, desires etc. and s/he would be able to identify an approximate mortgage amount. Pre-qualification can be done quickly over the phone or internet and does NOT include a review of your credit report. Just because you are pre-qualified for a mortgage does not mean you’ll actually be granted a mortgage.

Pre-Approved

Getting pre-approved is a more in-depth process, requiring a review of your credit history and a verification of your income and debts. After reviewing you finances your loan would be submitted to underwriting – and ultimately you’d be provided with a pre-approval letter that you can use when making an offer on a home. Pre-approvals are normally good for 120 days so it is important to make sure you have this documentation when presenting offers to home sellers.

Ultimately, there is no harm in getting pre-qualified but to have a good chance at getting a home and a mortgage, you need to be pre-approved.

Interested in more in-depth information about getting approved for a mortgage? Contact our lending partner, Supreme at (877) 316-0296 or visit www.UnitedHomeMortgages.com.

More Financing for More People

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  • Supreme Lending Square

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We’re proud to announce Supreme Lending as our newest mortgage partner. Supreme is full of out-of-the-box thinkers, just like us. Meaning, they are here to help provide more financing to more people. Have questions about financing or types of loans available, contact us. We’re happy to help.

Introducing Supreme
Supreme was established in 1999 by Scott Everett, and has since grown to become one of the nation‘s leading mortgage companies. Headquartered in Dallas, Texas, Supreme has over 100 mortgage offices in 48 states, and originated over $3.4 billion in mortgage loans in 2013. Inc. 500/5000 recognized Supreme as one of the 100 fastest growing companies in America, acknowledging their strength as a company and promise to fulfill their vision in becoming the Best Mortgage Banking Company in America.

Operations
Supreme only  hires the best mortgage professionals in the industry, and constantly invests in state of the art technology to keep their processes streamlined and efficient. Their associates follow through with exceptional communication and informative feedback throughout the loan pipeline, which helps produce an app to clear to close average of 24 days.

Supreme services all of their loans, ensuring that  clients receive top-quality customer service for the lifetime of their loan. In 2013, Supreme had an overall customer satisfaction rate of 95.6 percent, with a response rate of 79.8 percent (that‘s 14,307 customer survey responses!).

Our Products
Supreme offers a loan for any situation clients may have, from FHA to Jumbo. A popular programs is their 100% financing USDA loan. If your or your clients are looking to renovate or remodel a home, Supreme also offers a HomeStyle® Renovation loan.

Recognition
Supreme is a Scotsman‘s Guide Top Mortgage Lender, Forbes Top 100 Mortgage Company in America, a Mortgage Technology Tech Savvy Lender and Servicer since 2009, received the Lender Excellence in Customer Service Award by Lending Tree, Lending Excellence by Genworth US Mortgage Insurance, and has received numerous awards for associate satisfaction in Best Places to Work survey results nationwide.

Interested in talking to one of their mortgage professionals today?  Contact them at info@supremelending.com or call (877) 316-0296.

Best Deals: Access New Foreclosures in Your City

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Looking for the best deal on a new home? Purchasing a foreclosure lets you save a significant amount of money on a home that you might not be able to afford otherwise.

United Real Estate makes it easy to search for new foreclosures in your city, if you live in Pennsylvania, New Jersey, Delaware or Maryland. Focusing on newer listings makes it less likely that you’ll run into the problem of finding foreclosed homes that have been damaged, vandalized or left vacant for a long period of time. This means that your chances of finding a foreclosure that’s in good condition and doesn’t require a lot of repairs or renovations are much higher.

You can search by county or city, address or ZIP code, school district, neighborhood and county or township. Our search feature also lets you narrow down your options by selecting a price range, number of beds, number of baths, minimum square footage, home style, property type and amenities. Keep in mind that buying a foreclosure is more complicated than a traditional home purchase, so consider having an experienced agent help you out.

Need help buying a foreclosure? Contact United Real Estate, and follow us on Facebook.

Boost Your Credit Score Prior to Home Buying

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Your credit score has a major impact on your ability to get a home loan with a low interest rate. That’s why it’s so crucial to make sure your score is as high as possible before applying for a mortgage.

If your credit isn’t in great shape, you can work toward improving it. Use these tips to boost yourpersonal credit score:

  • Order your credit report. Before doing anything else, request a copy of your credit report. You’re entitled to receive a free one each year. When you get it, look it over carefully for errors and have them corrected right away. You’ll also find out how much you owe and which creditors you owe.
  • Pay your bills on time. Late payments bring down your credit score, and it can take time to raise it again. Make sure you pay all of your bills on time, and don’t miss any payments.
  • Carry low balances. Keep your balances low if you can’t afford to pay them off completely. Higher balances will lower your credit score significantly. Keep balances below 50 percent of your limit.

Want more advice on mortgages? Call United Real Estate, and follow our Facebook page.

Three Common Myths About Home Buying

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During your search for a new home, you’re bound to run into a few common misconceptions about the process. Some of these involve the way credit works when you apply for a loan.

These are a few of the most common home buying myths about credit:

  • Your credit has to be in perfect shape. Lenders do use credit to make approval decisions and decisions on interest rates, but you don’t need the best score possible. You can still get a mortgage with less than stellar scores, although your interest rate will most likely be higher.
  • Lenders can share your credit information. Lenders can share this information with affiliates, but only if you’ve given them permission to do so. There are several laws that safeguard your personal credit information and prevent lenders from sharing it without your permission.
  • While there are hundreds of credit bureaus, lenders have base their decisions on the FICO scoring model. Other models such as Score X, Score + or Vantage are consumer based models that give people an idea of what their FICO score might be.

Need help shopping around for a good mortgage? Contact United Real Estate, and visit us on Facebook.

The Difference Between Pre-Qualification and Pre-Approval

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When it comes to financing your new home, you’ll need to be approved for a home loan. Before that can happen, though, you need to know roughly how big of a loan you’ll most likely need. This is where the terms “pre-qualified” and “pre-approved” come into play.

Getting pre-qualified happens first and means that you’ll find out how much of a mortgage you might be approved for. This step doesn’t involve as much scrutiny as pre-approval, so you won’t be going through a credit check or be asked to provide tons of information on your financial situation. You’ll also learn about the different types of mortgages, so you can find the one that would be best for you.

Being pre-approved is more in-depth than getting pre-qualified. Your lender will go over your credit report and look closely at your finances. You’ll also need to fill out a mortgage application and provide the paperwork that the lender requests. You’ll get a specific loan amount, which you can use to negotiate the price of a home.

Getting started with the home buying process? Visit United Real Estate to find a local agent, and stop by our Facebook page.