Erin Callahan's Blog
Thinking of buying a home in the near future? You're going to need a preapproval. This tells real estate agents that you're serious about the home-buying process, and it alerts sellers that you're a solid, low-risk candidate. Preapprovals aren't always easy to score, however. And if you're someone who's had a few credit issues in the past, you may need to improve your credit score before your dream of home-ownership becomes reality.
Here's a checklist of best practices for prepping your credit to gain a preapproval:
Check Your Credit Reports
Before you ever approach a lender for a home loan preapproval, make sure you know what's on your credit reports. You're entitled to one free credit report each year from each of the three different reporting agencies:
Order credit reports for yourself and for anyone who will be a co-applicant on your home loan, and then scour your reports for inaccuracies.
File Immediate Disputes Over Inaccuracies
Any discrepancies you find should be reported immediately. It's an easy process of reporting the issue to the credit bureau and waiting while they go back to the creditor to verify what you've claimed. In most instances, the inaccuracy will be removed within a week or two, though you may have to produce receipts as proof of payment.
Contact Creditors to Offer Settlements
Make a list of old, unpaid debts that are valid and set aside the funds to pay them off, one by one. If you have cash-in-hand, call creditors and ask them to settle for a portion of the balance in cash. Some may be willing to work with you, others may not. But it never hurts to ask.
Pay Current Bills On Time
Stay current on existing accounts. Make sure everything is paid on time, from credit cards to car payments, to ensure you don't lose points on your overall score while you're working toward credit restoration.
Pay Down Your Debt-to-Income Ratio
Your debt-to-income ratio is an indicator of how responsibly you use your credit. The lower your ratio, the easier it will be to obtain a preapproval. Pay down big balances. The more credit you're able to free up, the more attractive you'll look to potential lenders. Prepping your credit to gain a preapproval is surprisingly easy, but it requires the funds necessary to pay off outstanding debts and to pay down current balances.
Start early if you suspect there are items on your credit report that require fixing, and be patient as things circle back around. Credit repair is not an overnight fix, but with steady progress, it won't be long until you have a preapproval for your new dream home.
You've sold your home, and moving day is almost here. As such, now may be the perfect time to pack an overnight bag; that way, you're ready to survive with only limited supplies until you get settled into your new house.
Ultimately, there are several essential items to include in an overnight bag, such as:
It is important to pack enough clothing to ensure that you can dress comfortably until you get unpacked. Thus, you'll want to consider how long that it will take you to get settled into a new house as you prep your overnight bag.
For example, if you plan to take several days to unpack, you'll want to pack your overnight bag clothing accordingly. In this scenario, you'll likely need work clothes for the days that you're in the office, along with pajamas and other comfortable clothing that you can wear around the house.
If you know that you're going to be living outside a traditional home environment for a few days, it never hurts to pack cash in your overnight bag. By doing so, you'll have money available to buy food, beverages and other items as needed.
Consider how much money that you'll need to survive even a few days outside of a traditional home setting. Also, be sure to keep extra cash close to reduce the risk of losing this money while you relocate to a new address.
Shampoo, toothpaste and other toiletries should be included in your overnight bag. These items ensure that you can maintain a clean, neat appearance, regardless of where you're staying.
Many convenience stores and supermarkets sell travel-size versions of popular toiletries. Therefore, you may want to purchase travel-size toiletries to limit the chance that assorted toiletries will take up too much space in your overnight bag.
Furthermore, you can pack only the toiletries that you know you'll need for a set period of time to conserve additional space in your overnight bag.
4. Smartphone Charger
Let's face it – no one want to lose access to his or her smartphone for any length of time. Fortunately, if you pack a smartphone charger in your overnight bag, you can recharge your smartphone at any time.
Include a smartphone charger and any smartphone cords or wires in your overnight bag. In addition, don't forget to test your smartphone charger and accessories to ensure they work properly.
Packing an overnight bag can be quick and simple, particularly for those who plan ahead. And if you include the aforementioned items in your overnight bag, you should have no trouble surviving outside a traditional home setting.
Lastly, if you need help as you get ready to vacate your house, a real estate agent may be able to provide assistance. A real estate agent serves as an expert guide along the home selling journey and will do everything possible to guarantee that you are fully prepared for an upcoming move.
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Believe it or not, selling a home may prove to be a good idea. In fact, there are many reasons why selling a residence could be beneficial, and these include:
1. You can earn a profit from your home sale.
If you have allocated significant time and resources to maintain your residence, you may find there will be lots of interest in your house if you add it to the real estate market. As such, you could earn a profit from the sale of your home.
Of course, it often helps to craft a home selling strategy before you list your house. This strategy will enable you to determine the steps you'll need to take to optimize your home sale earnings.
2. You can downsize or upgrade.
In some instances, a homeowner may find his or her current residence is now too big or too small. If you encounter this situation, there is no need to worry, as you can always list your residence and downsize or upgrade as needed.
Selling a home allows you to reconsider your living situation. Thus, if your current house is too big, you can sell your home and move into a smaller residence. On the other hand, if you need more space than your current home offers, you can list your residence and pursue a bigger home in the city or town of your choice.
3. You can find a new home close to family members and friends.
If you have to travel great distances to visit family members and friends, you may want to consider moving closer to these loved ones. Thankfully, you can sell your residence and relocate to a new home near family members and friends.
Clearly, there are many reasons why selling a home may be a good idea. If you hire a real estate agent, you can receive comprehensive assistance throughout the property selling journey.
A real estate agent will do whatever it takes to help you achieve the optimal home selling results. First, he or she will meet with you and find out why you are selling your house. A real estate agent next will offer tips to help you prepare your residence for the housing market. Then, when you're ready to sell your home, a real estate agent will promote your residence to prospective buyers. And if you receive an offer to purchase your house, a real estate agent will help you analyze this homebuying proposal and make an informed decision.
In addition, a real estate agent is a home selling expert. He or she will respond to any of your home selling concerns and questions, and by doing so, ensure you can achieve your desired results.
If you decide to sell your residence, you may want to hire a real estate agent. Because if you have a real estate agent at your disposal, you can get the help you need to simplify the property selling journey.
If you're planning to purchase a home in the near future, one thing's for sure: You've got your work cut out for you! However, when you finally find the house of your dreams, the time and effort will be more than worth it!
Your to-do list will include calculating how much you can afford to spend on a house, obtaining a pre-qualification letter from a mortgage lender, and eventually comparing loan estimates.
One of the first things home buyers usually need to do before getting too caught up in their real estate search is to check their credit score. Your credit report, which is basically a detailed profile of your credit history, plays a major role in your ability to get approved for a mortgage and obtain favorable interest rates. Consumers are entitled to get a free copy of their credit report once a year from the three major credit reporting companies: Equifax, Experian, and TransUnion.
Before applying for a mortgage, it's highly recommended that you check the accuracy of your credit report. If it contains mistakes, inaccuracies, or obsolete information, that could affect your ability to get a mortgage -- or obtain favorable interest rates and terms. Fortunately, errors can be disputed and corrected by the appropriate credit reporting company.
The Impact of Your Credit Score
The most widely used scoring system to determine a borrower's ability (and willingness) to stay current on loan payments is called a "FICO score." Depending on your credit history and bill paying habits, your FICO score can range from a low of 300 to a high of 850. If you're wondering how your FICO score stacks up against other homebuyers and consumers in the U.S., the median FICO score was recently in the neighborhood of 721 (although that number fluctuates). That means 50% of borrowers are above that score and 50% fall below that mark.
According to the Consumer Financial Protection Bureau, the best mortgage interest rates are generally offered to borrowers who have earned FICO scores in the mid- to high 700s. If your credit score falls between the high 600s and the low 700s, the interest rates available to you may be somewhat higher.
Those who are saddled with a credit rating below the mid 600s may have difficulty getting approved for a mortgage. If you're in that situation, your real estate agent or loan officer may suggest applying for an FHA loan rather that a conventional loan. Although FHA loans can be more expensive, the standards for getting approved are more lenient. These government regulated and insured loans also allow for a more affordable down payment of as little as 3.5 percent, as oppose to the "typical" down payment of between 10 and 15 percent.