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Credit Score in the Toilet? Fix It Before You Buy Your Ocean Edge Condo.

Credit Score in the Toilet - Fix It Before You Buy Your Ocean Edge Condo.

If you’re thinking of buying your Ocean Edge condo, make sure you do your homework and check your credit score. So many people do not know their credit score, or how important it is in determining your ability to purchase a home.  If you do check your credit score and it is low, what can you do? There is no need to worry if you check your score and it is low. There are many ways that you can fix your credit score before you buy your Ocean Edge condo. However, you do need to work quickly because it can take time to correct credit issues. Here is how you can fix your credit score before you buy your Ocean Edge condo!

What is Your Credit Score?

Your credit score is a number that can range from 300 to 850. A score of 300 is the worst score you could get, and 850 is excellent which is the best score you could possibly get. Typically people have “Good” or “Very Good” credit, it takes discipline and work to get an “Excellent” credit score. The work involved in maintaining and increasing your credit score is monitoring it regularly and making sure that you are on top of your finances.

Sometimes information will be given to the credit bureaus that is false, so if you find information on your report that is not true, you need to correct it as soon as possible. Taking care of this incorrect information will help to fix your credit score before you buy your Ocean Edge condo. Foreclosures and bankruptcy are two of the major factors that will severely impact your credit score. It takes time to bring up your credit score when you have one of those issues on your financial history. Smaller issues such as unpaid bills or being late paying your bills also add up and can really lower your credit score. What other factors go into buying a home? Check out our blog, “Top 6 Home Buying Questions – Answered.”

What is your Score before you buy your Ocean Edge condo

Where Does Your Credit Score Come From?

The credit score comes from a variety of sources. It is developed from information obtained from a number of sources of credit given to you by different agencies. For example, credit card companies, car loan agencies and banks are all types of agencies that lend money to you on credit. This money is lent to you with the understanding that you would pay it back in addition to an interest fee that is charged for lending the money to you in the first place.

This line of credit will be used to judge your ability to pay back money that is lent to you.  Your credit score is similar to your grade point average in school, but for borrowing and paying back money. A person’s GPA (or grade point average) was a vital tool in determining what type of college you will be eligible for, and your credit score is a vital tool in determining what type of mortgage you will be eligible for to purchase your Ocean Edge condo. This credit score is then reported to the big three credit bureaus, Experian, TransUnion and Equifax who manage this information.

where does your credit score come from

How Do You Fix Your Credit Score?

So you checked your credit score, and it is not high enough to get you the mortgage that you need for your dream condo at Ocean Edge. What should you do now? The first step is taking a look at your credit score. Are there cards or lines of credit still open that you have closed? Was a payment you made misreported as delinquent? If you spot a mistake on your credit report, take care of it right away. It can take time to disappear from your credit report, so the sooner the better. A mistake on your credit report will stay with you, so it is important that you nip it in the bud and fix it. For more information on how to improve your credit score, check out our blog “Clean Up Credit Score Before You Buy”

Set reminders in your phone to remind you of when your bills are due so that you do not miss a payment. A lot of companies allow you to set up automatic payments so the money is automatically deducted from your checking account every month. The trick is remembering to have the money in that checking account for your payment to be made on time. It can be tempting to sign up for store credit cards because many of them offer a discount on purchases when you are checking out. However, applying a line of credit impacts your credit score. When a credit company or car dealership runs your credit to see if you qualify for their store credit card or if you qualify for a car loan, they make a hard inquiry on your credit. This hard inquiry knocks down your credit score, so before you have your credit run ask yourself if it’s really worth it.

How to Fix Your Credit

How Do I Monitor My Credit?

Websites and apps such as Credit Karma or certain credit cards offer you free credit scores that you can check daily without impacting your credit score. Although websites such as Credit Karma are reliable, they are sometimes based on two out of three of the big credit companies reports on you so it is not always your exact score. Websites like those give you an idea of where your credit score is at, but you can request your complete credit score to know exactly where you are on the credit scale. Monitoring your credit will prevent you from having to fix your credit score before you buy your Ocean Edge condo, you will be ahead of the game.

Fix Your Credit Score Before You Buy Your Ocean Edge Condo

There are so many factors that go into buying a home, and your credit is a major one. The better your credit score, the better your chances of getting the mortgage you need to buy your Ocean Edge condo. Before you start the home buying process, do yourself a favor by checking your credit score so you can fix your credit score before you buy your Ocean Edge condo. Knowing your score will give you the upper hand because then if  you do need to fix your credit, you have the time because it won’t happen overnight!

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Buying an Ocean Edge Condo as a Married Couple: What You Need to Know

Buying an Ocean Edge Condo as a Married Couple: What You Need to Know

Before I start talking about buying an Ocean Edge condo as a married couple, congratulations on your marriage or upcoming wedding! It is an exciting time in your life with endless possibilities ahead of you and your partner. Buying a home together is one of these options that are now open to you. Of course you could have bought a home together as an unmarried couple, but you may have put it off until after marriage figuring it would be so much easier to navigate. After all, we are familiar with the struggles that couples run up against when purchasing a house together when they are not married. Unfortunately, buying a house as a married couple is not too much easier due to the fact that some serious conversations need to be had before going forward with the home search. Here are some key pieces to discuss to make the home buying process easier for you and your spouse.

Kids

Chances are you and your spouse have discussed having or not having children at this point, but have you discussed how it would impact your finances? Although it is not a romantic way of thinking about it, having children is a huge expense, and it will draw a considerable amount of money from your budget. The cost of childcare is immense, and sometimes it is not worth it financially to have both partners work. If both partners continue to work when they have children, a significant portion of one of the paychecks will go directly to daycare.

On the other hand, one parent could stay home to save on the childcare expense, but that means your income could decrease by half. Could you continue to pay your mortgage and other expenses (such as utilities and car payments) if one of you stays at home or if you have a big childcare payment every month? It may seem early to discuss, but if you are planning to buy a home, the conversation needs to be had so you are not signing up for too big of a payment. A good rule of thumb when looking at mortgages is to plan on only paying 30% or less of your income on your mortgage. Just because you are approved for a $750,000 mortgage, does not mean that you should go out and buy a house for $750,000. Look at the big picture first.

Kids

Credit and Financial History

At the beginning of a relationship, you talk with your partner all the time. You talk about your interests, hobbies, taste in music, movies and everything in between. During this time, you are finding out whether you two are compatible and discovering more and more things that you love about that person. For a lot of couples, this talking does not include discussing their credit scores and financial history. Many consider the topic of credit score taboo and avoid talking about it all together. However, if you are planning on buying a condo as a married couple, you need to have the conversation.

If you are unaware of what your credit score is, call your credit card company to see if you can get a free report, or check one of the free credit monitoring websites such as Credit Karma. You need to know what your individual credit scores are before meeting with a mortgage lender. This gives you a chance to work on any credit problems either one of you have before applying for a mortgage. A low credit score could prevent you from getting a mortgage all together, or at the very least desirable interest rate. A high interest rate due to poor credit will cause you to spend way more on your home than if you cleaned up your credit in the first place. To find out more about how to fix your credit, “Clean Up Your Credit Score Before You Buy.”

Credit

Your Housing Future. Is Buying an Ocean Edge condo an option?

Another topic that needs to be discussed with your spouse is how long you plan on living in the home that you are purchasing. Is it your forever home, home for a couple of years or is it going to become your income property? If you’re planning to live in your home for just a couple of years and then convert into an income property, buying an Ocean Edge condo could be the way to go. Many people decide to rent their condos at Ocean Edge during the summer months, as they are very desirable vacation rentals for Cape Cod’s seasonal visitors. The amenities available to Ocean Edge tenants and the variety of floor plans are very appealing to summer visitors. See what kind of income you could expect from different style condos at our Ocean Edge Investment page.

If you are only planning on living in your Ocean Edge condo for a couple years until you are able to purchase a larger home so you can expand your family, you might want to look for an adjustable rate mortgage as opposed to a fixed rate mortgage. With an adjustable rate mortgage, your interest rate would be low for a certain period of time (typically 7 years), at which time it could change to any rate within a set limit. However, if you are buying a forever home, you would want to go for a fixed rate mortgage. A set rate mortgage tells you how much you can expect to pay on a monthly basis for the life of your loan. This makes budgeting much easier for families that plan on living in their homes for a long time.

Housing Future. Is an Ocean Edge condo an option?

Death and Divorce

As a newly married, or about to be married couple, the last thing you can picture is getting a divorce. Or worse, one of you dying. It is important when buying a home to determine how you are going to purchase the property in legal terms in case the worst happens. As a married couple, you have the home ownership option to joint tenancy or tenancy by entirety which is only granted to married couples. With this option, you can not transfer your portion of the property without your spouse’s consent. If one spouse dies, the other automatically has full ownership of the home. The second home ownership option is tenancy in common. This allows either spouse to transfer their portion of the property without the other spouse’s consent, and if one partner is contributing more to the property, protects their investment more in case of divorce.

Buying an Ocean Edge Condo as a Married Couple

Buying an Ocean Edge condo as a married couple can be stressful, but it is important that you are prepared because it is also a very exciting time in your lives. It may not be easy to have these conversations about finances and the future, but keep in mind you are building a life together. Get the tough conversations out of the way so you can move on to more fun conversations like what kind of tile you’re going to use in the bathroom and picking out color swatches for painting bedrooms! If you are buying a condo as a married couple, and need help in your search for the perfect place to start the rest of your lives, contact Michael Leighton and his team of professionals today! Michael Leighton has been the #1 Agent at Ocean Edge since 2004 and #1 Agent in Brewster since 2007.

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Clean Up Your Credit Score Before You Buy

Clean Up Your Credit Score Before You Buy

The real estate market is heating up, and if you’re like many people today, you’re probably thinking of buying. With interests rates currently at a reasonable level, buying could be more affordable than renting a home. The first step to buying a home that you should take is determining what you could afford. Speak to a mortgage broker at your bank to determine what you could afford and what type of financial assistance they could offer you. In addition to looking at your income and savings, the bank also looks at your credit score. It is important to clean up your credit before you buy so that you are approved to buy once you find the home of your dreams.

Check your Credit Score

A person’s credit score tells the bank whether they are able to pay back the money that is being lent to them on time. The score is based on your credit history, the balance on accounts you currently have (versus your credit limit), whether your payments were late, the age of your credit and the number of accounts you have open. Be proactive and before walking into the bank, check your credit score so you know if you need to clean up your credit or if it is currently high enough to be approved for a mortgage. There are plenty of free apps and websites that can give you an idea of your credit score such as Credit Karma. Use these free credit score services as a guide not a definite, because usually it is only free because it is not the total credit picture. For example, Credit Karma only supplies you with your score for two out of the three U.S. credit bureaus. You may find that your score is actually higher or lower because of that third credit bureau. For a small fee you can purchase your complete credit report, which will give you your total credit score.

Check your credit score

Identify Weak Credit Spots

Experian, Equifax and TransUnion are the three main credit bureaus in the United States. Your full credit report (that you purchased for a small fee) will give you the scores for each credit bureau. The age of your credit, outstanding balance vs credit limit, and late payments will all be listed on this report. Carefully review your credit report, paying close attention to the section “adverse accounts” section. This section of your credit report will tell you where you have defaulted or missed payments. Late, missed or defaulted payments are a huge blow to your credit score.

Another weak spot is utilizing more than 40% of your credit limit. If you’re maxing out your cards, that is a bad sign for lenders. A low balance vs credit limit shows that you use discretion and are responsible with your spending. A high balance might hint that you spend too much for what you make. The age of your credit is a consideration for lenders looking to finance a mortgage. Credit age is determined by the age of your open accounts. The idea behind looking at your credit age is for lenders to get an idea of how long you have been responsible in using the credit system.

Clean Up Your Credit

Once you identify your weak spots, it’s important to pay close attention and make a point of paying those accounts on time to clean up your credit. Once you have started making payments on time, you should see an improvement in your score in just a couple of months. If you only missed one or two payments, you could contact the company and see if they would remove it from your report. Some companies will do this for you since it was only once or twice and you had a good history of paying them on time.

Create reminders in your calendar to notify you when payments are due. Automatic withdrawal is a good way to ensure your accounts are paid on time. Car loans can be automatically withdrawn from your account, as well as other bills and credit cards. If you are worried about having the total balance from a bill such as your credit card withdrawn from your account monthly, you might be able to have the minimum due withdrawn from your account. You could always go into your account to pay the balance after the fact, but at least you will have a payment on record on the date your balance was due. This small step will make a big impact on your score.

Clean up your credit

Credit Limit Increase

A sign of good credit is a low outstanding balance to credit limit ratio. If your outstanding balance to credit limit ratio is high, your credit score is lowered. The easy fix to this credit problem is to request a credit limit increase. This will lower your outstanding balance to credit limit ratio. Most creditors will allow an increase as long as you have been current on your payments. This is a way to clean up your credit that takes very little effort. One call could fix this one area of your credit that will give it a decent boost.

Raise Disputes

While reviewing your full credit report, keep an eye out for mistakes. Every once in awhile the credit bureau will receive incorrect information, which will impact your score. If you spot a mistake, do your research and write a letter to the credit bureau with all supporting documentation. Correcting a mistake on your credit report may take some time, but it is worth it because it will increase your score.

In Conclusion

Your credit score is your first impression to lenders. Your score determines whether or not banks and creditors will lend to you. It is vital that you stay on top of your credit report, and clean up your credit when problems arise. Once you clean up your credit, you can go to the bank confident that they will help you finance the house of your dreams. If you need help finding your dream home, contact our sales team at Leighton Realty.

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