Get Debt FREE and Raise Your Credit Score!

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  Pay Off  YOUR Debt,  NOW!

The only way to raise a credit score is to pay off your debt or at least reduce it to an acceptable level! I recommend paying off high interest rate  credit card debt first.They can suck the life out of your finances! As for those, "magic cure" credit repair commercials you hear and see promising a quick fix, their scam is even greater than high interest rate scam your credit card company is charging you!

What steps do you need to take to build your credit score to the highest level possible? How can you secure a mortgage with a lower interest rate? Use my common sense guidelines provided below to get rid of the debts that have reeked havoc on your chances for a lower-interest mortgage on your dream home.

1.) Pay Your Bills on Time – All the Time!
I know, I know – this isn’t always easy. But, lenders of all kinds look for reliability on your part. Since loaning money is a risk for them, they look for signs that you have a reliable income and the discipline to pay your bills over time. When they see those signs, they say to themselves, “Hmmm, this person looks like a good risk to me; therefore, he or she deserves a lower interest rate.”

2.)  Do Not – I Repeat! – Do Not Open Unnecessary Credit Cards!
People sometimes open credit card accounts in order to increase their available credit. Absolutely avoid this temptation! It’s simply too darned easy to charge for items you don’t really need, and, before you know it, you’re back in debt or have increased it to an unreasonable degree.

3.) Budget, Budget, Budget!
Financially, this is possibly the most “unsexy” task there is, and yet it’s the most vital and important one you can possibly undertake! YOU need to figure out where you stand financially. Budgeting will allow you to get rid of debt, improve your credit score, and shape a low interest rate financial future for you!

4.) How Much Debt is Too Much?
Here’s the first question to ask yourself in terms of budgeting: How much debt is too much?
Actually, there’s a standard financial formula that allows you to answer that question. This formula is called the debt to income ratio, and what it does is measure your net monthly income against your debt.

Here’s an example:
"George” has a net monthly income of $2000 and his monthly debt payments are $500.
So, to get his debt-to-income ratio, George divides $500 by $2000 and gets this ratio:
500÷2000 =.25 (25%)
  
Is this a good ratio?
Well, financial experts generally agree that debt expenses should be 25% or less of your income. George’s ratio is reasonable but could be better.So, what’s the ratio of your debt to your income? Figure that out by taking the next step.

5.) Calculate Your Debt-to-Income Ratio
You can answer that question by completing the following tasks:

Task 1: Analyze your bills from the last month. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

Task 2: Review your credit card bills and add up the minimum payments owed on each card.

Task 3: Figure out your monthly take-home pay (net salary).

Task 4: Divide your monthly fixed expenses by your monthly income to get your debt-to-income ratio.

What percentage did you get? If it’s 25% or greater, then it’s definitely time to budget in order to reduce or eliminate your debt.

I’d be happy to discuss some more in-depth  budgeting tips and provide you with information on mortgages at the same time!

How Do Credit Reporting Companies Determine My FICO Credit Score?

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Creditors determine your credit score based on a formula by which they calculate the score of each individual. It’s designed to give them an objective (mostly) method to predict how likely it is that you’ll repay a new loan.

Often, a credit score is referred to as a “FICO” score. Where did this term come from?

From two men named Fair and Isaac! In the mid-1950s, they founded a company called, Fair Isaac Corporation. Over the ensuing years, the name got shortened to “FICO.”

Fair, Isaac is a for-profit company, traded on the New York Stock Exchange (NYSE: FI). Their exact formula for calculating credit scores is termed “proprietary;” that is, it’s secret.

Each of the major American credit reporting agencies (CRAs) has a relationship with Fair Isaac. The “Big Three” CRAs are: Experian,Equifax, and Transunion. You can find them easily on the Internet.

In a common-sense world, each CRA would have the same credit score for each person. So, why don’t they? Because they each have different formulas for determining your credit score! That means your score may vary from one CRA to the other!

Each CRA formula is based on experience with millions of consumers. With each credit rating company, the higher your score, the better your credit is rated.

Now, above, I said that the credit formulas are secret. And they are, but we can sketch the general elements of those formulas. 

So, for example, we know that FICO models analyze these items in your history:

* Past delinquencies
* Derogatory payment behavior
* Current debt level
* Length of credit history
* Types of credit
* Number of inquiries by lenders and others into credit history.

Although the models vary as I stated earlier, the general formula looks like this:

* 35 percent on a borrower's payment history.
* 30 percent on debt.
* 15 percent on how long the applicant has had credit.
* 10 percent on new credit
* Another 10 percent on types of credit.

What Is the Range of FICO Scores?

Keep in mind that the following ranges sometimes change or vary with a particular source.

In general, however, the higher the score, the better your credit rating is, as stated earlier.

At the top end of the range is the perfect score of 850. As you can guess, very few, very rich people achieve this kind of perfection(only 1% of the U.S. population)! They get the lowest and best interest rates and get their loans fast. And why not? From a lender’s point of view, they’re an extremely low risk!

Eleven percent (11%) of the American population has a score of 800. That means they’ll also get lower interest rates and have their loans closed within days (just not as fast as the “perfect people” above).

So, what’s the score of the average American? 720! The interest rate for these individuals will be higher than the two categories above, and it might take days or weeks to close the loan, depending on the market.

It’s when your FICO score gets below approximately the 620mark, that you’re going to have to work harder to get mortgage money from a lender.

Here’s why: With that score, they calculate that borrowers will default on that loan better than half the time! From their viewpoint, it doesn’t make very good business sense to lend money in such situations.

However if they do loan the money, it will carry a higher interest rate to cover the added risk. Of course, in these situations, lenders look very closely at a borrower’s financial history in order to determine whether or not there are any “red flags;” that is, missed payments, late payments, unpaid debts, bankruptcies, etc.

So, there you have it! Now you know how your credit score is calculated. I hope I’ve taken the mystery out of the whole process. If not, contact me today!

Five Reasons Why You Should Hire Us, Not Them

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In a sea of agents, trust me – you want to hire someone who can keep your deals afloat and get you the best deal on the home of your dreams.  But I’m not suggesting you hire us based only on this one statement, in fact, I can provide you a list of reasons why we are a cut above the rest.  

Whether you are considering a new home so you can move up and into something better, or you want to invest in some property to avail the fantastic low rates out there right now, we want you to hire us.  Here are the top five reasons why hiring us for your real estate buying dreams will end up in you getting your dream home and us having a fruitful relationship with years of professional friendship to come.  But don’t take our word for it – the reasons listed below have come from our actual clients, who after years of being asked why they chose us over others, collectively answered with these consistent responses:

We Listen To You

You wouldn’t believe the nightmare stories we have heard about other agents trying to impose their own preferences on buyers.  Well, where we’re concerned, we understand and value the importance of your needs and the first step to implementing them is to foster solid communication – both ways.  That way, you can count on us going after the things that are most important to you and we can count on you trusting us.

Our Team Follows Through 

Nothing is more frustrating than to send an email or leave a voicemail for your agent and then spend hours, days or even weeks waiting for a response.  Our mantra is to follow through with everything and that means that every communication we get or every item that needs to be discussed, relayed or investigated – no matter what it might be – we get it done.  If we said we’d do it, you can count on it getting done.  

We Know Our Markets

Anyone can become an agent and often there are agents who “handle” markets all over the place, regardless of whether they’ve ever stepped foot in the town or not.  Inside information on the little nuances of a place can only come from a person or a team that knows the area well.  When you’re looking at buying a property, this inside knowledge is paramount and one that we pass on to our clients by way of our knowledge of the industry and our markets.

Our Team Is Solid and Strong

The hand picked team that we have developed did not happen by accident.  With careful consideration and years of cultivated relationships, we have created the perfect blend of a solid team and strong organization that keeps its promises, while delivering everything according to plan. That, too, is not by accident.  I have personally developed a system for every aspect of our organization so that we can carefully measure our progress and provide our clients with optimum service.  

Honesty and Integrity Is Our Priority 

Finally, our priority remains honesty and integrity.  We realize that in a business such as ours there can be lots of ups and down – and there is no better demonstration of that than the current state of our real estate market and overall economy.  Our clients know that we will always be honest with them about what to expect, whether or not their expectations are realistic and anything else that may come up in the myriad transactions that take place for real estate.  We take our relationship with our clients and their needs very seriously and work very hard not to jeopardize that trust.  Poor representation can cost thousands of dollars – excellent representation is priceless.
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With these five aspects of our business, we are confident that our clients understand our priorities and have rewarded us with their business in exchange.  I invite you to come visit us to see if there is anything we can do to help you get into your next dream home.  We won’t let you walk away disappointed.

Why Use the Services of a Real Estate Agent?

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This question is often asked, especially by homeowners who consider selling their homes by themselves.

The fundamental first answer to this question is that an experienced realtor is an expert at what he or she does. Through hard work and education, they’ve acquired a set of skills that make the process of home buying and selling a lot easier than it would be by doing it yourself.

So, what are the skills in the set I’m talking about?

Well, for one thing, we have the skill of being the go-between. We’re the people who handle people and calls and separate the “wheat” (real buyers) from the “chaff” (non-buyers) without you ever having to deal with such situations. In Internet terms, we make sure you’re not “spammed” with worthless offers and target real deals for you.We’re also the ones who save you a lot of time by making sure you’re looking at appropriate properties and neighborhoods right from the get-go.

And, speaking of neighborhoods, an experienced realtor will know them inside-out or will know how to find the latest information on them. That means he or she can get you into neighborhoods where the crime rate is low or non-existent, find you ones with great school systems, rising property values, etc.

By the same token, an experienced agent will steer you away from neighborhoods where the trends are downward; that is, rising crime, falling property values, and so forth.

And what about the prices of homes? Well, some people believe that we select them for our clients. Not true! We have no way of setting prices. They’re set by the market! However, we can guide you toward properties that fit your individual needs and are comfortably within your price range. Frankly, it’s not in our best interests to put you into a home beyond your means or that’s not right for you. When that happens, we lose clients and money!

So, we’ll do our best to work within your price range and, based on current information (market supply, demand, etc.), we’ll come up with the best negotiation strategy possible. Current information can include cost-per-square-foot of homes, ratios of list-to-sold prices, knowledge of the buyer/seller, etc. All this information is gathered by the agent and used to formulate solid offers.

Another important skill experienced Realtors possess is objectivity. We have the ability to stay out of the emotional process that often occurs with the buying and selling of a home. Instead, we present your case in the best light possible, all the while holding your information confidential from any competing interests.

One realtor skill that’s often not apparent is our ability to network with other service providers (housing inspectors, title companies, etc.) Professionally, we can’t recommend one specific vendor over another. However, we do keep lists of vendors with excellent reputations as well provide references for the vendors. This service allows you to choose the best provides for your particular situation.

Now, here’s one realtor skill that everyone truly appreciates – the ability to handle tons of paperwork! Today, purchase agreements can run 10+ pages, and that doesn’t even include all the state and federal disclosure statements that are required in the current market! Heck, a real estate file can end up being 2-3 inches thick with paperwork these days!

And it’s not only the heavy paperwork handled by realtors; it’s also the attention to detail within that paperwork. It’s their job (or a lawyer’s, depending on the state) to make sure all the information is correct because if it isn’t, it can end up costing the client hundreds of dollars. 

So, as you can see, there are many reasons why it’s wise to use an experienced Realtor for the purchase or sale of a home! To find out about the services I haven’t mentioned in this article, contact me today.

Stay Within Your Means to Get the Best Value When Buying a Home!

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Before you make any kind of investment in a home, check your financial "pulse" to make sure you're financially healthy and able to comfortably afford both the down payment and the monthly payments. Below are common-sense guidelines to follow in this regard:

Guideline 1: Check your credit rating!

One of the first things lenders will check before loaning you money is your credit rating. If it’s good to excellent, your chances of borrowing money for a mortgage are very much improved. Currently, depending on circumstances, you need a credit score of at least 620 and the money for a down payment (the percentage varies with the type of loan).

If you have a credit score below the 620 benchmark, then additional documentation (and more time) will be required to prove to the lender that you're worthy of a loan - and even then there's no guarantee that the mortgage will be granted. So, as you can see, it's important to know what your credit score is before you approach a lender. You can find out this information from one of the "Big Three" major credit reporting agencies shown below:

• Equifax (exquifax.com)
• Experian (experian.com)
• Transunion (transunion.com)

If you're wondering exactly what such agencies do, the best explanation is that they act as a clearinghouse for lenders. That means they collect financial information. They then sell it to banks, credit card companies, mortgage companies and other lending agencies. In essence, lenders use that information to decide if you’re a good financial risk.

So, if you have a credit score of 620 or better, no problem! But what if that score is below 620? What can you do then? Follow the guideline below.

Guideline 2: Reduce or Eliminate Debt!

The only method of raising your credit rating is to pay off credit cards or any other kind of debt you have. Now, no matter what you hear or see on television, radio or the Internet, there's no "magic bullet" for reducing or eliminating debt. It has been and always will be a matter of personal discipline on your part! You can accomplish that discipline by taking the following steps:

Step 1: Pay your bills on time—all the time.
Step 2: Don’t open unneeded credit card accounts to increase available credit.
Step 3: This is the most important step. You must figure out where you stand financially by budgeting. In other words, you have to reduce unnecessary expenditures so you can apply saved monies to your debt and improve your credit score.

In this step, you must analyze your current financial situation. The first question to ask yourself is, "How much debt is too much?"There’s an easy formula for coming up with an answer to that question. It’s called the debt to income ratio. It’s a simple method of measuring your net monthly income against your debt.

For purposes of illustration, let's assume the following: Your net monthly income is $2,000. Your monthly debt payments are $500. Divide $500 by $2,000, and you’ve calculated your debt to income ratio:

500÷2000 =.25 (25%)

Financial experts generally agree that debt expenses should be 25% or less of your income. A ratio of 10% or less is great. Anything above 25% waves a red flag in the face of lenders in general. In that case, you definitely need to reduce or eliminate debt. So, what is your debt to income ratio?

Answer that question by doing the following:

• Review last month’s bills. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

• Review your credit card bills. Add up the minimum payments owed on each card.

• Figure your monthly take-home pay (net salary).

• Now divide monthly fixed expenses by monthly income.

What percentage did you get? If it’s 25% or greater, then it's time to take action to reduce your debt. It’s time to budget!Okay, let's assume that your credit rating is in the good to excellent category and you have the money for a down payment on a house. That's great news!

But, you still need to stay within your means! So, upfront decide what you want in a home (two bedrooms, attached garage, etc.) and then stick to those guidelines!

Don't get swayed by an ultra-beautiful home with, say, four bedrooms and a state-of-the-art kitchen. If such a house is beyond your means, it won't look very beautiful when you can't make the monthly payments!

The best approach to take is to tell your Realtor upfront about your guidelines and ask him or her to show you only homes that meet them.

Believe me, I or any other Realtor love to work with customers who know what they want! It not only helps you but us as well because we can locate such properties faster and easier and get you into a new home that much more quickly!Please contact me so I can answer any more questions you might have about buying a great new home within your means!