You probably know the FICO score as a three-digit number that helps determine certain things in your life–such as whether you’ll qualify for the best credit cards, or get a favorable rate on a mortgage.
FICO was created by the Fair Isaac Corporation, an analytics software company headquartered in San Jose, California. Fair Isaac was founded in 1956 by engineer William “Bill” Fair and mathematician Earl Isaac on the premise that data and algorithms could help businesses make decisions. Ultimately, the score is intended to predict the likelihood that you’ll pay a lender back.
Factors and Their Level of Influence on Your Score:
Payment history (35%): Your payment history shows whether you’ve made payments consistently on time.
Amounts Owed (30%): You can have multiple credit cards and not be a credit risk. It’s only when you
use a significant amount of your available credit that it begins to negatively affect your score. This is also
referred to as your “credit utilization”.
Length of credit history (15%): FICO considers the age of your oldest account, the age of your youngest account average age of all of your accounts. FICO also notices how frequently you use your accounts.
Credit mix (10%): This is about the type of credit you have, such as installment loans, credit cards and mortgage. You don’t need each one, but having more than one type of credit is positive.
New credit (10%): This looks at the number of new credit accounts and loans you have opened (or tried to open) recently.
What Are the FICO Score Levels?
Poor 300 – 580
Fair 580 – 669
Good 670 – 739
Very Good 740 – 799
Excellent 800 – 850
Things That Hurt Your Score
Your FICO score fluctuates. Positive behavior, such as making on-time payments, can result in an improved score. Negative behavior, such as missing payments, results in a lower score. According to FICO, there are certain behaviors that will certainly hurt your score.
- Missed or late payments
- High credit utilization (or close to reaching your overall credit limit)
- Opening multiple new credit or loan accounts around the same time
- Errors on your credit report
For most of us, our bedroom is little more than a place to sleep and relax. However, just because it’s always been that way doesn’t mean that we have to settle for drab and dreary.
One trend that’s gaining steam these days is converting your current bedroom into a luxury suite (or something comparable). If you want to live like you’re renting a room at the Ritz, then you want to follow these tips.
Compartmentalize Your Activities
Making your bedroom more functional is going to make it more luxurious. Add a gorgeous desk for working and a TV area for entertainment, and you’ll be living it up in no time.
Make it Chic
Choose a color palette that is both luxurious and classy. Silver and gold can seem tacky, so choose muted shades that compliment each other.
Also, a brilliant and commanding headboard can instantly upgrade the look of your room without any other changes.
Light it Properly
Finally, make sure that you have the right light to show off your designs. If it’s too washed out or yellow, then it will look drab and run down. Switch to brilliant LEDs and see the difference.
Choose Your Accents Wisely
We already mentioned a headboard, but some elegant drapes can also make your room feel more royal. Being strategic with your furniture accessories is going to both keep you under budget and avoid doing too much with the space.
Are you ready to lux your bedroom? You’ll be impressed by the results, and the feeling of decadence will make you more confident in your surroundings.
Moving into a new home is an exciting time, and you’re probably daydreaming about decor and paint schemes and new furniture. But before you get into the fun stuff, there are some basics you should cover first.
Change the locks
Even if you’re promised that new locks have been installed in your home, you can never be too careful. It’s worth the money to have the peace of mind that comes with knowing that no one else has the keys to your home. Changing the locks can be a DIY project, or you can call in a locksmith for a little extra money.
Steam clean the carpets
It’s good to get a fresh start with your floors before you start decorating. The previous owners may have had pets, young children, or just some plain old clumsiness. Take the time to steam clean the carpets so that your floors are free of stains and allergens. It’s pretty easy and affordable to rent a steam cleaner—your local grocery store may have them available.
Call an exterminator
Prior to move-in, you probably haven’t spent enough time in the house to get a view of any pests that may be lurking. Call an exterminator to take care of any mice, insects, and other critters that may be hiding in your home.
Clean out the kitchen
If the previous occupants wanted to skip on some of their cleaning duties when they moved out, the kitchen is where they probably cut corners. Wipe down the inside of cabinets, clean out the refrigerator, clean the oven, and clean in the nooks and crannies underneath the appliances.
Unfortunately, our homes don’t always grow with us. What may have initially worked fine for a single person, a young couple’s starter home, or a family with a newborn can quickly become too small as families expand and multiple generations live under one roof.
Remodeling and adding to your home is one option for creating more space, but it can be costly, and the size of your property may be prohibitive. That’s when moving to a bigger home becomes the best solution.
WHERE DO YOU NEED MORE SPACE?
The first thought when upsizing your home is to simply consider square footage, bedrooms, and bathrooms. But it’s important to take a more critical approach to how your space will actually be used. If you have younger children (or possibly more on the way), then focusing on bedrooms and bathrooms makes sense. But if your children are closer to heading off to college or starting their own families, it may be better to prioritize group spaces like the kitchen, dining room, living room, and outdoor space—it’ll pay off during the holidays or summer vacations, when everyone is coming to visit for big gatherings.
If you need more space, but don’t necessarily want a more expensive home, you can probably get a lot more house for your money if you move a little further from a city center. While the walkability and short commutes of a dense neighborhood or condo are hard to leave beyond, your lifestyle—and preferences for hosting Thanksgiving, barbecues, and birthdays—might mean that a spacious home in the suburbs makes the most sense. It’s your best option for upsizing while avoiding a heftier price tag.
You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.
But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.
The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.
The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.
THE HAPPY MEDIUM
Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.
CONDITION – The pricing of your home must accurately reflect its condition. The general upkeep and presentation is critical in obtaining the highest value for your home.
LOCATION – The pricing of your home must reflect its location. School districts, high or low traffic and highway accessibility all need to be considered in determining the value of you home’s location.
MARKET – Recession, inflation, interest rates, mortgage availability, competition, and the public’s perception of the general economy all make up the market.
TERMS – The more financing terms and options you accept the more potential buyers there will be for your property.
PRICE – Price is the #1 most important factor in the sale of your home. The value of your property is determined by what a ready, willing and able buyer will pay for it on the open market, which will be determined by the value of other recent closed sales. Failure to property price your home can cost you time and money.
As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.
A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.
On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.
On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.
After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.
Refinancing your mortgage is something most homeowners consider at least once throughout the lifespan of their home loan. It allows you to pay off your previous loan by applying for a new one that has better financial advantages. While there are many good reasons to refinance, here are five common ones.
- Scoring a lower interest rate. The number one reason homeowners decide to refinance is to secure a lower interest rate on their mortgage. Not only does this save you money in the long run and decrease your monthly payment, but you can start building equity in your home sooner.
- Using an improved credit score. Even if interest rates have not dropped in the market, if you’ve improved your credit score over the last few years, you may be able to reduce your mortgage rate.
- Shortening the loan’s term. If interest rates are decreasing, there is a chance you may be able to get a shorter loan term with little to no change in your monthly payment, allowing you to pay off your loan sooner.
- Switching from an adjustable rate to a fixed rate. If you chose an adjustable-rate mortgage with great introductory rates when you initially financed your home, that rate may increase significantly over the years. By switching to a fixed rate while interest rates are low, you can protect yourself from future increases.
- Cashing out home equity. If there is a big purchase or payment on the horizon, such as funding a wedding or going back to school, your best option may be to use the equity you’ve built in your home to borrow money at a lower cost.
Make Sure You’re (Really) Ready
– Can you see yourself living in the same town for
the next 5 to 10 years?
– Be prepared for the extra work that comes with
Create Your Home Wish List
– Check out different neighborhoods, home styles to
get a feel for what’s most important.
Figure Out What You Can Afford
– Determine the down payment amount.
– Calculate how much you’ll need in reserves for
maintenance and repair costs.
Gather Necessary Documents
– Last Tax returns and proof of employment.
– Bank and Investment statements.
– Compare fees charged and shop for loans.
– Get a pre-approval letter from the lender. Many
Sellers will not consider and offer without one.
Assemble Your Team
– Find a real estate agent you trust and
communicate well with.
– Ask a friend or family member for second
opinions as you go through the buying process.
A Comparative Market Analysis is how we arrive at a recommended listing price for your home. It is both an art and a science.
Find and analyze the comparable neighborhood homes by number of bedrooms, bathrooms, square footage, lot size and an untold number of additional features. Using the information on how much those homes listed and sold for, can determine your home’s fair market value.
Decisions must be made about how to adjust the value of your property as it compared to other homes. EXAMPLE: if an active listing as been on the market for over 30 days, it’s safe to assume it’s overpriced for the condition or features. On the other hand if the property is the only one on the block with a view, its value goes up, compared to others.
The Comparative Market Analysis (CMA) requires technical experience, neighborhood knowledge, and critical thinking. A poorly executed CMA might compare your home to properties that are not similar enough, or it could draw the wrong conclusion from incorrect data.