If you're in the market for a new home, it's important to know your credit score. A good credit score can lead to a better interest rate on your mortgage, while a lower one might present extra challenges. Need to improve your score? Here are a few things you can do.
Check your credit. Start by requesting your credit reports from the three credit reporting agencies; you're allowed one free copy every year. Requesting one report from each agency every four months can show you how your credit changes over the year. If you're short on time, request all three at once.
Dispute any errors. Next, look for errors, signs of fraud or outdated information. Are the accounts familiar? Are all balances accurate? Is a closed account listed as open? If you spot an error, you'll need to submit your dispute in writing to both the reporting agency and the company that provided the information.
Stop credit activity. Until you apply for a mortgage, it may be a good idea to cease most credit-related activity. That means you'll want to skip any large purchases, avoid applying for any new accounts and try not to switch jobs or make any other major life changes.
Pay down balances. One of the most important factors in determining your credit score is the amount you owe compared to the amount of credit you have. Ideally, you don't want to use more than 30 percent of your available credit. If you can, work to pay down balances if you're using more than this.
Good credit can take time to build, but regularly reviewing your information and working to rectify past errors will put you in the best possible position when it comes to getting an optimal rate on your mortgage.
Real estate is a prolific profession. Everyone either knows a real estate agent, or is connected to one through six (probably less) degrees of separation. Between friends and relatives, and the stereotypical representation of real estate agents on television and in pop culture, the general public has a adopted some assumptions about agents that are very far from the truth.
Here are ten things that people assume about real estate agents that just aren’t true:
1. They make “easy money”
HAHAHAHAHAHAHAHAHAH. The only people who could ever possibly make the case that being an agent is an easy way to make money are those who have never done it. It’s hard, uncertain work, with many instances of months wasted on a deal that doesn’t ever close. The only thing easy about it is reading the Lighter Side of Real Estate.
2. They are required to show you houses even if you’re not pre-approved
There are definitely agents who will show you houses without a pre-approval (or at minimum a pre-qualification), but an agent is not required to, and most experienced agents probably won’t. The ability to qualify for financing dictates whether or not a deal is even possible, so an agent is simply saving you from disappointment (or worse) by asking you to get pre-approved.
3. Zillow is more accurate than they are
It would be wonderful if Zillow (and similar websites) were accurate in their home valuations, but if you compared their results to actual appraised values, in most cases you’d burst out laughing. Real estate agents want you to get as much money as possible for your house, but oftentimes reality gets in the way. Trust your realtor to give you a fair market assessment for your house…at least more than you trust Zillow.
4. They make huge commissions
The popular real estate flipping shows on cable t.v., and Million Dollar Listing have given everyone the impression that real estate agents are rolling in the dough. Most real estate agents wish that this was true, but reality is much different. The median US existing home sale price in December 2016 was $234,900, which means after splitting the commission and paying their broker, an agent took home about $3500 on the transaction, not including all marketing and related expenses. As a monthly income, this adds up to about $40,000 per year. Not exactly huge.
5. They’re an unnecessary evil
Many people have made the argument that real estate agents are unnecessary and are merely an impediment to a more efficient “For sale by owner” model of real estate. The best way to eliminate this misconception is to try selling your house yourself. There is nothing more sobering than desperately Googling state and federal real estate laws as some unkempt stranger is knocking on your door asking you questions about your FSBO house.
6. They’re sleazy
Unfortunately, real estate agents have joined the ranks of lawyers, politicians, and salespeople in some of the public’s assumptions about their trustworthiness. The financial collapse of 2008 exacerbated this perception. Thankfully, the market correction also weeded out most of the unsavory elements in the business. The truth is, real estate agents are honest, hardworking people, making a living like any other profession. And just like any other profession, there are a few bad apples that unfairly give the others a bad name.
7. They’re uneducated
This misconception really gets under most agents’ skin, because not only do many agents have degrees (and advanced degrees in quite a few cases), but the knowledge required to pass a real estate exam is substantial. There are many people who are unable to get their licensing because of an inability to pass the licensing tests, which makes the concept of an “uneducated” agent laughable.
8. They want you to pay more for a house so they can make more money
If you truly looked at the math involved in calculating real estate commissions, you’d never utter this falsehood again. An agent getting you to pay $10,000 more for a property will net that agent approximately $150, which barely covers the cost of gas required to drive to and from your appointments. The truth is that an agent absolutely wants you to buy a house. What’s not true is that they want you to pay more for one.
9. They’re mostly part-timers or bored housewives
If you ask the average person to describe the archetypal real estate agent, they’ll probably say it’s an older married woman who is looking for something to do in her free time. Ugh. This is stereotyping at its finest, and ignores the hundreds of thousands of male agents, the hundreds of thousands of full-time agents, and the hard-working primary bread winners that make up the real estate workforce. Sure, the stereotypical agents do exist, but they’re the exception to the rule.
10. All they want from you is the deal
Yes, agents want your business. But true professional real estate agents want to be your lifelong real estate advisor. They want you to think of them whenever you or your family and friends have any real estate questions. They want to see you and talk to you more than once a decade, and they want to make sure that you remember your interactions with them as being absolutely delightful.
Did you know that the three major credit bureaus sell your personal information?
It's true! Known as "trigger leads," the files of borrowers applying for new credit are sometimes flagged, packaged and sold by the credit bureaus to merchants and finance companies.
As a trigger lead, you become susceptible to companies which may send pre-approved or pre-screened credit or service offers. You may wish to opt-out of these types of solicitations by visiting www.optoutprescreen.com.While this prevents many unsolicited new merchant offers, consider that you will also no longer receive news or offers on deals that may benefit you.
As you embark on what could be the largest financial transaction of your life, it's important to have a professional home loan specialist on your team who understands how credit impacts the loan process.
If you'd like more information on trigger leads, credit reports or available mortgage products to help you reach your financial goals and needs, contact us today.