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

Subscribe to my YouTube Channel:

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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

5 Types Of Morgages

There are many ways to finance a home, let’s cover some of the more popular types of loan products.   Home financing options can get a bit confusing with all the terms and types of loans, each with their different requirements.  Let’s break down these different types of loans in a simple easy to understand format.  I will cover some of the more popular types of loans I see used to finance a primary residence.

Remember we won’t cover rent to own, owner finance, hard money loans and other types of financing.  While those types of financing options do exists it is generally is not very common.

These are just some of the basics for the different types of loans.

FHA - One of the most popular loans for low credit and down payment requirements

- Insured by the Federal Housing Administration

- Minimum down payment as low as 3.5%

- Minimum credit scores of 580

- 2 Mortgage Insurance Premiums

-Paid up front or financed in mortgage (1.75% of loan)

- Monthly Mortgage Insurance Premium (Based on several factors- .80-1.05%)

- This is probably one of the most popular due low to credit and down payment requirements.

Conventional - Offer better financing options however has stronger qualifying requirements

- Privately insured (not backed by government but private investors)

- Minimum down payment as low as 3-5%

- Higher credit score requirements than FHA

- Private Mortgage Insurance charged if less than 20% down payment

- Typically .5%-1% of the loan amount on an annual basis paid monthly

Ex: 100,000 loan - $1,000 per year - $83.33 per month

- Popular for those with higher credit & down payments

VA - Veteran requirement - low credit & even 0% down

- No mortgage insurance however it has a funding fee

- Funding Fee - ranges from 1.25%-3.3% (can be financed)

- Low credit score ok

- 0% down payment option available

USDA - 0% Down Payment Option

- Income eligibility 

- Property eligibility (www.usdapropertycheck.com)

- Credit Score low to middle 600’s

Jumbo Loans - Higher Price Point loan amount above conventional conforming loan limits

- Roughly $453,000 minimum loan

- Higher credit requirements - Middle 600’s & up - depending on down payment

- Higher interest due to higher risk loan

- Down Payment as low as 5% but typically higher

Keep in mind, we only covered the basics, we did not cover additional items such as:

• • • Debt to income ratios
    • Income requirements
    • Income Calculations
    • Self Employed vs Employed
    • Time on the job
    • Escrow options (Escrow or No Escrow)
    • Property Requirement - condition
    • Max Loan To Value %

As you can see there are different types of loans for different situations to suite you best.  From my experience these loan requirements can change on a regular basis and can be difficult to keep up with which I why I strongly recommend the loan officers that I work with.  They stay on top of these loans, are up to date and also know the ins and outs of loans to see which ones fit your need.  With so many variables to consider beyond credit and down payment I leave it up to the pros to assess your situation and present to you all your options. 

I hope this helped you breakdown the different loans and at least to know some more of the terms you hear all the time when it comes to mortgages.  If I can be of assistance or you have any further questions please do not hesitate to contact me.

 Again I hope this was of value and maybe you picked up a tip or two.  My goal is always to be a resource and educate my clients so they can make informed & educated decisions.

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

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