How To Establish Credit

How To Establish Credit

When you hear about financing you usually hear about credit as well.  How well is your credit, do you have good or bad credit?  What is your credit score?  What you don’t hear much about is how to establish credit and today I wanted to show you a common and easy way to establish credit if you have none.

My favorite suggestion to most folks is a safe and easy one.  I like the idea of establishing your credit with a secured credit card.  A secured credit card is exactly what it sounds like a credit card that is secured… let me explain.  A bank or lender will approve you for a secured credit card, lets say with a credit limit of $300.  However that credit limit is secured, the way they do that is the bank ask you to give them the $300 as security.

You might be thinking, well am I just not borrowing my own money back?  The answer is yes, however the difference is the bank or lender is reporting your behavior to the credit bureaus, this is called credit.  So in essence what you are doing is showing the bank how you are responsible with money while they do not have any risk of losing since they have the $300 as security.

Now remember this isn’t a long term credit card to have, this is mainly just to establish you credit.  Once you establish it you can explore other credit cards or lines of credit you may be interested in like a car or home.  The main idea of credit is to have the lender report your behavior with money to the credit agency, which is how credit works.  

If your interested in this idea, save up the $300, find a bank that will issue one and apply.  Use the card, pay back the borrowed money on time over and over again.  Over time your credit will not only be established but your behavior to a potential creditor in the future will be established as being good & this should be your goal!

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

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Mortgages: Pre-Qualification vs Pre-Approval? What is the Difference?

Mortgages: Pre-Qualification vs Pre-Approval? What is the Difference?

So which is better and which should you get… pre-qualification or pre-approval?  What do they mean and what is the difference?  You often hear the two terms thrown around when talking mortgages and financials so let’s break them down.

First just know these two terms can be interchangeable to some loan officers and lenders so be sure to ask for clarification.

Pre-Qualification is considered to be the easier of the two and involves less information.  Let me explain.  First in this scenario you provide your limited information to either a loan officer or even a website and almost immediately you get a response.  Either yes you are pre-qualified and for how much or declined.  However please know that there was no verification involved and this is the key difference.  You could have lied to a computer or loan officer and based on your information they make a decision.  When you get a letter from the lender with a pre-qualification it usually is not taken as seriously due to the lack of verification.

Pre-approval on the other hand is the same except there is actual verification.  Now instead of just entering your income you will need to provide proof of your income such as bank statement, tax returns and pay check stubs.  If you have assets those will need to be verified as well as your employment.  As you can see this takes more effort however due to the verification it carries more weight in comparison to a pre-qualification.

So what does this actually mean to you when you start shopping?  A pre-qualification will have a bit less meaning than a pre-approval to a seller who receives your offer.  Knowing there has been some verification involved will make the seller more confident in a pre-approval as opposed to a pre-qualification.

Now do you want to take it up a notch and be fully approved?  This is even more verification and even involves the lender’s underwriter.  Just know at this type of approval you are fully approved meaning everything is verified and all questions the lender may have to give you a loan have been satisfied.  At that point the only thing between you and a loan is finding a home.  You can read more about fully lender credit approval here.

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome

How Long Does It Take To Get Pre-Approved For A Mortgage?

How Long Does It Take To Get Pre-Approved For A Mortgage?

How long does it take to get pre-approved?  Getting pre-approved can be done in a few hours if not a day but it is all about being prepared.  Being prepared with all the documentation and information in hand will expedite the process for you and the loan officer.

Be sure to have all your information ready so there are no delays.  Some of the items you will need are your tax returns, pay stubs, bank statements, 401K statements, ID, and any other important financial documentation you plan on having the lender take in to consideration. 

Having those documents and information in hand will make the process much smoother.  Just know the loan officer will gather the information and make a determination as long as there are no issues.  Some will even go as far as verifying your income if there is something in question.  However most lenders will get it done the same day.  

Keep in mind the pre-approval is different than a pre-qualification.  Pre-qualification generally involves no verification so it is usually instantaneous.  Pre-approval usually means there is a form of verification, which makes it take longer to do but has so much more meaning behind it.  A seller is going to take a person who is pre-approved much more serious than one who is just pre-qualified.

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome

Are You Ready To Buy A Home?

Are You Ready To Buy A Home?

Are you ready to buy a home?  You have always heard buying a home is a good investment and a wise thing to do but is it right for you?  Even if you want to buy a home are you necessarily ready to buy?

Buying a home, in my opinion, is a great thing generally in a person personal life but also financial.  However I will be the first to state it is not for everyone, you much be financially ready and prepared to maintain it once you own it. 

How confident do you feel in your current job, career field and your marketability to be employed?  This is something you much ask yourself because if you are not confident in either of these then you may think twice before purchasing.  When you purchase you are committing to a long term loan, so being prepared to pay that over the long term is important, having confidence in your job which is your income source is extremely important.

Have you saved up money for a down payment, closing costs, moving expenses, and possible maintenance issues?  All these are important to keep in mind, as you want to not only be able to buy the home but also maintain it for the long term.  Remember there is no maintenance person you can call anymore you would know be in charge of that.  Also find out how much money you will need to bring to closing if you were to buy a home and have that ready.  Remember you can do down payment assistance programs and get gifts funds from family but it is best to figure that out ahead of time instead of at the last minute.

How is your credit and is it good enough to qualify for a loan?  There are loan programs for people with all sorts of credit scores so your chances are good but you still want to know where you stand.  I always strongly recommend to speak with a loan officer to gauge where you stand and inform you of your options.  If you don’t qualify then find out why and get a plan in place to get you qualified in the future.  Credit is very important so knowing where you stand is important to determining if you are ready to buy a home.

All these items are more financial, how about personal?  Will you want to stay in a particular area for a long time or do you want to move away in the near future.  Remember buying is for the long term so take that in to account. 

Being ready to buy a home is all different to everyone especially with the personal side of the equation.  I can help you with the financial side but I feel the personal side is very important as well. 

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome

Advantages Of Getting Full Credit Approval

Advantages Of Getting Full Credit Approval

What is the advantage of getting full credit approval?  First let’s break down the types of lender approvals so we know where we stand.  Remember first there is a qualification or even referred to as pre-qualification.  In this case a buyer is pre-qualified for a mortgage by having given their information and determined to be able to qualify for a mortgage.  However please note there is no verification if the information given was actually true, so this type holds very little weight and I do not recommend it.

Next is the pre-approval or approval of a mortgage, in this case the same happens but there is verification of the information provided.  So the income is verified with pay check stubs, tax returns and even banks statements, so this is the preferred way to be approved for a loan.

Full credit approval however is the ultimate form and has really become more popular as the market has become more competitive.  In this case the approval goes as far as fully approving the buyer by the lender’s full underwriting standards.  In this case the buyer is not only review and verified by a loan officer but also the lender’s underwriter, which is the ultimate decision maker.  

Keep in mind this takes up time, the lender’s resources and fills the lender’s pipeline with other buyers who may already have a house under contract.  This is something big the lender’s are doing and it s an enormous help to a buyer when it comes to competing for a home in a multiple offer situation.  The only thing missing from the lender actually giving you a loan is the contract on a home.

So how is this stronger?  You are fully approved, meaning you almost hold as much weight as a cash buyer!!!  You are guaranteed as far as your credit approval is concerned.  That is big, and getting this done is recognized when it comes to making your offer because now the seller doesn’t have to worry if you will not qualify down the road.  The reality is you are ready and approved so your offer holds weight and they are more likely to take your offer over others just for that reason.

Getting fully credit approved takes time and the lender’s resources, so when you have a lender willing to do this realize how important it is.  This means that not only are they serious but they know what it takes to help you win those multiple offer situations.  If you have the opportunity this is the best route to take, it will put you ahead of the rest of the buyers and get you in a home that much fast.  When I tell people how to win in multiple offer situations this is my number one suggestion!

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome