Position yourself as a strong contender that can move when the moment is right with these proven tactics

Are you ready to buy in this crazy hot market? Here are ways to make yourself a more competitive buyer in a seller’s market.

With so many buyers on the hunt, it is important to keep an open mind when searching the market. It is important to set your expectations that the top end of the search price range should be significantly under the top end of the budget. Making sure you are open to touring unexpected neighborhoods, it is worth it to explore adjacent areas with less interest.

A key in this market is getting pre-underwritten. it is worth the substantial; legwork compared to pre-approval but in the end, you will need to do the legwork to finalize your loan. This will provide you confidence in your budget in turn providing the seller more confidence that your funding will come through. With today’s lower mortgage interest rates, their month-to-month mortgage payment even with PMI factored in may be very reasonable.

Making it easy for the seller will go a long way, it is more important to send a string email summary with your offer and follow up consistently. Always start with your strongest offer, instead of testing the bottom where the seller won’t even consider countering, they will just move on.

Being ready to offer quickly is also key to winning in a competitive market, and considering these tips before you find the home you want to buy will help you feel ready to jump when the moment arrives.

To read more about ways to be a competitive homebuyer in this intense market, read the following article by Inman Content Studio. https://www.inman.com/2021/05/24/6-tips-to-help-your-homebuyers-in-a-sellers-market/

When beginning to shop for your first home, start with the options at the lower end of your budget.  If you find homes you like in that price bracket, then stop there. 

Let’s say you qualify for loan to purchase a 3,800 square foot home with a pool.  Very tempting, but deep down you realize that a 2,000 square foot home would be big enough for you.   For every additional $1,000 that you pay for the bigger house, you will be paying $1,000 plus interest.  By the time you’ve paid off the loan, you may well have paid double that.  Remember that buying a bigger house means bigger ongoing expenses, too: utilities, maintenance (roof repairs, painting, etc.)–and property taxes.

That’s money that might be better spent on other important goals over time, such as education, establishing an emergency fund, and saving toward retirement.

Many will argue that your house is a great investment and you should therefore push the limits of your spending ability a bit when buying.  Housing has certainly does appreciate nicely over the years, but the averaged stock values of the S&P500 have easily outpaced them over the past 50 years.  Just don’t allow yourself to be lured into spending more than you are financially comfortable doing.  Go for less than you can afford.  You can make improvements to your modest home, when you’re ready, thereby bumping up your equity in a safer, incremental way.

And do try to put 20% down on your house.  It will save you from wasting money on private mortgage insurance (PMI) and will help keep you from getting “under water” if the value of your home declines.  Aiming to put 20% down also helps you gauge whether or not you can really afford a particular house, too.  If you can’t afford 20% for that house, consider looking for a less expensive one, or else waiting—and saving up for that down payment.

Most Americans hold a deep-rooted belief in home ownership.  Its size, quality, and location are all status symbols.  We tend to say of families with a flashy car and a big, fancy house:  “They must have a lot of money!”  

Because this family is spending a lot of money on items that go beyond basic comfort levels—including the big house–we assume they’re in a great financial position.  But deep down, we know this isn’t rational.  To build wealth, you must spend less than you earn. 

Top SoCal real estate agent can help you buy real estate in Long Beach, Seal Beach, and San Diego. Find a house for sale that you will love.

To read David Weliver’s complete article, visit:

https://www.moneyunder30.com/why-you-should-buy-less-house-than-you-can-afford

The Real Estate industry can be intimidating to first-time homebuyers, especially when they begin the preapproval and prequalification process.  Below we’ll refute the most popular credit myths in today’s real estate market.

Myth #1: Closing an Old Account Will Help Your Credit 

This is a very common misconception about credit impact.  Lenders mainly review a real estate agent’s client’s credit history by looking at how long accounts have been open.  Typically, lenders average out all of your current and past accounts to get an accurate, standard length of time.  Therefore, the longer your accounts have been open, the better.  

Myth #2: All Debt is Treated Equally 

There are many different kinds of debt, and each one has a different risk and purpose.  These risks are what lenders evaluate when examining your credit.  For example, short-term accounts (credit cards) are viewed as more risky if the account has a high amount of revolving debt.  In contrast, a long term debt (a 30 year mortgage) is viewed as less risky because of the extended amount of time you have to pay off your debt.  Basically, if you have a maxed out credit card and a car loan with a high balance, the credit card is more detrimental to your credit. 

Myth #3: Your Credit Can Be Improved With the Help of Credit Repair Companies 

Popular companies, such as Credit Karma, Credit Sesame, Equifax, Experian, and TransUnion advertise their ability to supposedly improve your credit.  But before you buy into all of their promises and craft a utopian view of your credit, remember the saying, “if it looks too good to be true, it probably is.”  These companies can only help you establish a plan to consolidate your debt.  They cannot reverse your debt, nor magically make it disappear.  To put it simply, in order to reduce your debt, you need to pay off your account.  If homebuyers want to create this plan by themselves, they need to make a spreadsheet with their periodic expenses along with their monthly income to map out a timeline for debt payments. 

Myth #4: When You Pay Off Your Debt, It Gets Removed From Your Credit Report 

False.  A missed payment or a collection has the ability to remain on your credit report for up to 7 years.  Even though paying off this debt will stop banks from trying to collect on it, there is no possible way to remove a derogatory mark from your credit history unless it was reported incorrectly. 

Myth #5: Your Credit Report Reflects Your Relationship Status 

Questions regarding information like employment, income, and relationship status are not reported to credit bureaus and will only come up during the credit application process.  Your relationships, whether past or present, do not appear on your credit report.  Therefore, if one partner does not pay a debt and you are on the account, you will both be impacted negatively. 

As a homebuyer, you should schedule consultations with lenders about entering the preapproval process for a loan and to formulate a plan for debt payment that allows you to have a better interest rate.  Real estate agents have an abundance of information about the homebuying process from their years of experience, so feel free to call our top notch agents at VB Realty Group for your credit questions and real estate endeavors. 

If you want to read Vance Kellogg’s full article, click the link below. 

https://www.inman.com/2020/06/30/5-credit-myths-to-explain-to-first-time-homebuyers/?unl=70030fad32f1e7eb5545778556a28aed6016077c&utm_source=referral&utm_medium=email&utm_campaign=sharedarticle

When applying for credit or loans, your clean report will mean lower interest rates.  So if you have one or more negatives on your credit report, use the following strategies to fix it:

1. Dispute: If the business/company that reported the an item (the “Reporting Business”—this can be a bank or credit card, too) made a mistake, then contact them and dispute it !  Businesses are required by the Fair Credit Reporting Act (FCRA) to investigate and correct errors.  Insist that they correct their error with all three credit-reporting bureaus.  

2. Dispute Again: If the reporting business doesn’t fix it, contact the three Credit Reporting Bureaus yourself (again, this is if there’s an error involved).  The bureau is required by the FCRA to investigate and correct items that are wrong.

3. Pay to Delete It.  If it wasn’t an error, you can offer to pay the debt (with a pay-for-delete letter) if they will delete it from your credit report.  You could try offering a settlement instead of the full amount—no harm in trying!

4. Write a Goodwill Letter.  Ask the creditor for a “Goodwill Deletion.”  This works best if it was a one-time mistake on your part, such as a late or skipped payment.  The company doesn’t have to do it, or even respond…so just persuade them that you realize the error you made and explain that you’ve become more responsible now.  It’s worth a shot.

5. Wait It Out: This can take a long time, and the length of time varies.  However the impact of a negative item on your credit score will diminish with the years, even while it’s still there on your reports.  Meanwhile, try hard to keep new negatives from hopping onto the bus.

6. Hire a Professional Credit Repair Service.  For about $100 per month, a reputable service can help you correct errors, dispute negative items, and negotiate with creditors.  You can do these things on your own, but if your situation is complicated, this might be for you.  

Strategies That Won’t Work:

1. Filing for bankruptcy.  Sure, it can eliminate your debt—but it will ruin your credit score and will be visible on your credit report for seven long years.  Only do it if you are desperate!

2. Closing the account with the negative item.  Just don’t.  Doing so will not remove the debt.  It will lower your amount of available credit, thus damaging your credit-to-debt ratio on your credit score formula.

Regularly reviewing your credit reports is the best way to stay on top of your score.  Be patient and pursue all avenues when addressing problems.  Your credit score affects your ability to obtain credit cards, loans, insurance—and the interest rate for each of these.  For the full article, click here:

https://money.com/get-items-removed-from-credit-report/