5 Credit Myths

Lenders are constantly changing their requirements and over the past several years many would be buyers have been disqualified because of their credit score. There has never been a more crucial time to take some time out to educate ourselves on credit scores and how they affect our everyday lives. If you're looking to buy, refinance or even rent a home, variances in credit score can stop you from qualifying for the home of your dreams, and can either cost or save you thousands of dollars in interest over the life of your loan.

Let's get right to it with five common credit myths:

Myth #1 Having lots of cash, a great income or tons of equity makes your FICO score less relevant.

Fact: No matter how much cash you have, if you want to qualify for a mortgage, you must meet the lender's FICO score guidelines. Lenders don't look at your credit score on the theory that your other assets diminish your credit riskiness. Lenders want to avoid having to foreclose on a home, it's a costly and lengthy process.

How you've handled your credit in the past is the best predictor of whether you'll default on a loan in the future. Your credit score will determine whether or not you will qualify for a loan and what interest rate you will be charged to borrow, no matter how much money you make.

Myth #2 Having NO debt or NO late payments means you have great credit.

Fact: Being financially responsible and having good credit are two different things. Your FICO score is designed to be a measure of your responsibility when it comes to managing debt. Using credit regularly and responsibly is wise.

Having no credit accounts or debts doesn't give you good credit- it gives you no credit. The term used by the lending industry for consumers with no credit is "Ghost" how is a lender going to prove to an underwriter and investor wanting to purchase the loan if there is no recorded documentation? On the flip side, being maxed out on various credit accounts all the time, submitting lots of credit applications can actually depress your score. The best practice is to have several accounts that you actively and responsibly use on a monthly basis.

Tip: FICO gives a top score to accounts with balances that are 30 percent of the credit limit

Myth #3 Checking your own credit score in advance prevents surprises when you apply for a mortgage.

Fact: Your mortgage originator must pull their own version of your credit report. It may have a very different score, rating scale or even different line items. That is why it is imperative to start working with a mortgage professional as early as possible. This way you can detect any errors or issues and work to get them resolved as soon as possible.

Myth #4 If you've had a foreclosure or short sale, your credit report will be damaged for 7 years.

Fact: Derogatory credit items, ie. late mortgage payments, foreclosures and short sales, appear on your credit report for 7 years. However, your credit score can be rehabilitated enough to buy a home or obtain other credit in less time. The type of loan you will be seeking to purchase your next home with, how much cash you can put down and whether or not there were extenuating circumstances involved in losing your home in the first place; some loans will allow for immediate purchase, others require a waiting period of 2,4,5 or even 7 years of a home.

Your FICO score is also a huge component in a post home loss purchase. The length of time it takes your FICO score to recover actually depends on how high it was beforehand. The higher the score was, the longer it takes for full recovery.

As the foreclosure or short sale ages, its impact on your score will decrease too.

Myth #5 Short sales have much less impact on your credit score than foreclosures.

Fact: Short sales and foreclosures actually have the SAME impact on your credit score, according to the FICO folks themselves. (Exceptions are for short sales or deeds-in-lieu of foreclosure where the property was not upside down)

Also, the number of missed payments you had before your home was lost to foreclosure or short sale might weigh on how gravely injured your FICO score is in the process. On average there are 2 years of missed payments before a home is repossessed by the bank.

If you're looking to buy, sell, refinance or just have some real estate questions. Please feel free to give me a call, I'd be happy to assist you!

New Listing!! 125 Muir Hill Dr

125 Muir Hill Dr Aledo Home for Sale - The Snowden Team - Realty World Professionals Real Estate, Homes for sale, Realtor, Real Estate Agent, Aledo, Willow Park, Weatherford, Brock, Peaster

On Demand Hot Water Heater

The installation of on demand hot water heaters in your new home is likely one of the most cost effective items to include. With just a small increase over the traditional tank water heaters you will have a great return on your investment in short time as well as reap the benefits of its increased efficiency, usability and safety.

The benefits
1. Increased efficiency – on demand heaters heat only when hot water is needed which leads to dramatic energy savings.

2. Provide a never ending source of hot water.

3. Precise water temperature set with digital thermostat.

4. The tanks can be located near the destination of the water to reduce the run for the water and in turn reducing the wait time for hot water. Visit www.foreverhotwater.com for more information.

Aledo Home Statistics

Aledo is a highly desirable area for families, with it's excellent school system, community feel and proximity to Fort Worth it's no wonder that is a first choice for many families.


Here are some real estate statistics for homes in the Aledo ISD within the last 6 months:

There are currently 210 homes active on the market in Aledo.

The average size is 3000 square feet on 2 acres.

The average list price is $375,446.

There have been 160 sold properties within the last 6 months.

The average size of the sold properties is 2931 on 1.5 acres

Average sold price is $293,8663.

Average days on the market is 137.

Summary. Aledo is not only a great place to live it's a great place to buy and sell real estate. Now is a great time to do so, with interest rates as low as they are the opportunity is there! Let me know if I can answer any additional questions about the school district, current market conditions or assist you with your move. I'd be happy to!

Is your insurance policy up to date?

At least once a year you should revaluate your homeowner's insurance coverage. Here are some items to think about:

1. Can you rebuild all, not just part of, your house?
Make sure that your home owners insurance pays you for the full cost of rebuilding. Just because your home's value has gone down doesn't mean that the cost of materials & labor have gone down as well. In fact, over the last year building costs have gone up. Make sure your home owners insurance pays you for full rebuilding costs in the event of a disaster.

2. Check your flood insurance
Flood insurance is not usually part of a standard home owners policy. Home owners should check the FEMA maps frequently as they are constantly being revised. You can check your property by clicking

3. What's new in your life?
Did you add items to the property in the past year such as add a swimming pool, playground, trampoline. These things may change your liablity needs. Are you recently divorced, and you got the house, make sure your ex-spouse's name is off the policy. Talk to your agent and compare your life status this year with last year's to update your home owners insurance.

4. Maybe your valuables are worth more
Your art, jewelry, antiques, and other collectibles may have appreciated in value over the years. If your home owners insurance policy doesn't have accurate values on these items, your company may not reimburse you for the full value in the event of fire or other home disaster.

5. Tally up any home improvements
Have you made any renovations or additions to the home, such as an expanded garage, new bathroom, or home theater in the basement? Your house may now be worth more and your home owners insurance needs to reflect that. Create a home inventory video and keep it in a safe place outside the home.

6. Give your trees the once-over
Hire an arborist to look at the trees on your property, and check with your home owners insurance agent to see if your policy covers you if one of your trees falls on the neighbor's car. An arborist can tell you if your trees are healthy and advise whether they should be removed or trimmed.

7. Watch the nickels and dimes
Hunt for any special discounts that can reduce your home owners insurance premiums. For example, you may be eligible for a discount if you have an automobile or valuable articles policy with the same company has your home owners insurance policy.

These home features can also give you discounts on your home owners insurance--but only if your insurer knows you have them:

Burglar or fire alarms
Gated community patrol service
Storm shutters
Temperature monitoring system to protect against freezing, connected to a central station alarm
Permanently installed, electrical back-up generator


Referenced article from the National Association of Realtors, House Logic Richard J. Koreto

Welcome

Doesn't this just say "Welcome"

Low, low, low RATES

Are at an all time LOW!! Now is the time to buy the house you've been dreaming of! Currently rates are 4% for a 30 year fixed conventional loan. The 20 year average rate is 6.93% To break it down simply, if you borrow $300,000 from the bank your montly payment including principal and interest only will be:
4% - $1432.25.
5% - $1610.46
6% - $1798.65
6 7/8 - $1970.79
If you buy now and lock in an interest rate of 4% you will save big time bucks over the life of the loan.
4% vs 5%- You save $178.21 each month, $2138.52 each year and $64,155 over the life of the loan!
4% vs 6%- You save $366.40 each month, $4396.80 each year and $131,904 over the life of the loan!
4% vs 6 7/8% (the average interest rate over the last 20 years)-
You save $538.54 each month, $6462.48 each year, and $193,874 over the life of the loan!
There has never been a better time to buy or refinance!