Why Did My Credit Score Drop?

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Credit Score - Good to Know

Why Did My Credit Score Drop?

If you’ve seen a change in your credit score recently, you may be wondering why. There are a number of factors that contribute to a dropping credit score and it is important to know what may be causing that! When buying a home, it is important to maintain your credit and not make any major purchases that could impact your score. Here are the top 5 reasons for a drop in credit:

YOU MADE A LATE PAYMENT

Accounting for about 30% of your total rating, your payment history has a big impact on your credit score. If you make a loan or credit card payment more than a month after the due date, it could cause your credit score to drop. A payment 60-90+ days late will have an even greater impact on your score.

YOU MADE A LARGE PURCHASE

Your credit utilization ratio can largely impact your credit score. Your ratio is how much of your credit you use in relation to your total available credit. The goal is to have a lower ratio so if you’ve been using more of your available credit lately, you may see a drop in your score. If for any reason your credit limit is lowered, it can impact your credit utilization ratio and impact your score.

AN ACCOUNT GOES TO COLLECTION

Timely payments on all accounts is an important part of your credit journey. Late payments on credit cards, loans, to medical facilities, student loans and utilities can be sent to a collection agency, which could in turn show up in your credit report.

YOU OPENED A NEW LINE OF CREDIT

When you apply for new credit, you are giving lenders the permission to access a copy of your credit report, which is known as a hard inquiry on your credit. If your credit report indicates that you’ve applied for multiple new credit lines in a short period of time, your credit score may be impacted.

YOU CLOSED A CREDIT LINE

Closing a card means losing available credit, which could increase your credit utilization ratio. As a result, your credit score may drop. If closing a card helps you stop spending, it may be a good idea. Otherwise, it is usually wise to keep lines of credit open. The length of time you’ve had accounts open shows that you have a solid payment history, so that could be another reason to keep that card you’ve had awhile open if you are using it wisely!

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Home Buying Myths

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Although the internet can be a great resource for a variety of information, a lot of that information is incorrect. One of the most important and expensive decisions in your life, home buying, tends to circulate a lot of misinformation. Most of that misinformation is in regards to how much of a down payment you need or what your credit score needs to be. Let’s go over the real facts about buying a home and knock those myths out, so they don’t hinder your ability to purchase!

CREDIT SCORES

Though it may come as a surprise, you don’t need a perfect credit score to purchase a home. Traditional bank lenders will work with credit scores as low as 640, but your agent can also get you connected with local lenders that accept credit scores as low as 580. Although there are other required stipulations to qualify for the loan, you don’t need a perfect score in the 700’s or 800’s to get approved for a mortgage.

DOWN PAYMENTS

You don’t have to sell an arm and a leg to be able to purchase your dream house. There is a huge misconception that you need to pay a minimum of 20% down to buy. That information is outdated. These days, there a large variety of loan programs that only need an average of 3-5% down. Based on your income or military status, you may even qualify for mortgage programs that require 0% down. Although you’ll expect to pay an additional 3% in closing costs, which is separate from the down payment, this is still significantly less that 20% of the purchase price. If you’re in a buyer’s market, you may even be able to negotiate for the closing costs to be covered by the sellers.

Be sure to connect with Great Lakes Home Team to ensure you have the right facts. Don’t let online myths persuade you into thinking you can’t qualify or afford to buy a home. There are a variety of programs to help you get into your dream house. Since these vary by county to county, and state to state, it’s imperative you get the facts. We have credible local lenders we can put you in contact with as well.

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Ten Reasons to List Your Home During the Holidays

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As with every decision in life, there are pros and cons and choosing when to sell a home is no different. There are many factors that need to be taken into consideration before deciding when to sell a home. Many homeowners believe selling a home during the fall or winter months is not a good idea and that the spring is the only time a house should be sold. This is the furthest from the truth. Certainly most real estate markets across the United States experience a “spring market rush” every year. There is no doubt that the “spring market” is a great time to be selling and buying real estate, however, the fall and winter seasons may be the best fit for you for many reasons.

Less Competition – Most people wait until spring and summer to list their home, which means during the winter you will have far less competition than any other time of the year.

Serious Buyers Are Out There – Homes are sold and bought 365 days a year. Many homeowners believe that buyers aren’t out there during the fall and winter months. This simply is not the case. Serious buyers are always out there! Some buyers may stop their home search because it is the fall or winter, but serious buyers will continue to look at homes, no matter what time of year it is.

Mortgage Rates Are Low – If you’ve read about real estate in the past year, it’s likely you’ve read that the mortgage rates are low.  You also probably read that there is an expectation that the rates will increase very soon. Since mortgage rates are so low right now, buyers are able to afford more expensive homes. If mortgage rates increase over the fall and winter months while you’re waiting for the spring market, it could cost you thousands of dollars as it could eliminate many buyers from the real estate marketplace! Less demand for your home will mean less money. Bottom line: take advantage of selling your home while the rates are this low.

Quicker Transactions – Right now, there are fewer real estate transactions than there will be in the spring. The fewer number of transactions means the mortgage lenders have fewer loans to process and home inspectors have fewer inspections to do. All of these factors should lead to a quicker transaction and closing for all the parties involved. A quicker transaction is going to be less stress for you.

Homes May Show Better During the Holiday – Buyers love homes that can tell a story.   The holidays are a great time to show homes because the home is usually dressed up for the holiday season. Simple “seasonal” staging such as adjusting the color of the decor or having an aroma in the air that is relative to the time of year can go a long way with some potential buyers and possibly be the difference between a home selling or not.

January is the Biggest Transfer Month – Did you know that more corporate moves happen during January than any other time of the year? This may be a great reason to list your home during the holiday season.

More Time to Get Top Dollar – By starting to market your home early you may be able to secure a higher price.

Tax Benefits – By selling now you can have a closing before or after the new year for tax purposes.

More Time – Buyers may be looking at homes more during the holidays because of vacation time.

Showings – Yes, there may be fewer buyers during the winter months, but great prospects!

By considering all of the reasons above, you will be able to determine whether now is a good time to sell or if you should wait until the spring.

The Incredible Joy of Owning Your Home

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If you haven’t bought a home yet, you’re missing out on a wonderful feeling! That moment when you walk through your doors, throw your purse or keys on the floor, plop down on your couch and breathe a sigh of relief while thinking, “Finally, it’s ours (or mine)!” And the joy of looking at all of your boxes, getting to roll your eyes about why you buy so much stuff, then giving yourself a moment to take a nap because you worked hard to get here and earned it! Yes that’s a real feeling!

We often hear, and read, about the cost effectiveness of home ownership. The equity build-up, the freedom it can give us from finances in our retirement years, and a plethora of other ways owning a home can be a positive impact on your bottom dollar. But we don’t often hear about the emotional impact owning a home can have. Yes there will be days the fridge is acting silly and you need to call your home warranty, or days you have to get outside to mow your own yard, but nothing beats the pride and joy of owning a home.

There is a sense of security, and a sense of “this is mine and I worked my way up to this moment,” that provides moments of bliss. The ability to do with your home as you please, not pay a pretty penny for every member of your fur family, and the privacy it provides can’t be beat.

Home ownership also gives you the ability to put down some roots. And we mean that figuratively and literally. You get to build memories through the holidays and go through many milestones with your family, that leave a significant impact into the later years. You also get to build bonds with your neighbors, and grow in a community oriented neighborhood. With rentals, people come and go annually, but there are deeper roots planted with building relationships with those living next to you. Potlucks, 4th of July and New Year’s Eve spent lighting fireworks, and just the excitement of getting to know each other and build new relationships.

Buying a home isn’t about the dollars and cents for everyone, sometimes it’s just about the joy of owning your own place, and getting to build amazing memories in it. If you’ve been longing for this, get in touch with a real estate agent, and make it happen. You owe it to yourself to make your dreams come true!

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Key Professionals in a Real Estate Transaction

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When you are buying or selling a home there are a number of individuals you will come in contact with.  Here are some of them:

  1. REALTOR® – A REALTOR® is a licensed real estate agent and a member of the National Association of REALTORS®.  They also belong to their state and local Associations of REALTORS®.
  2. Listing Agent – A listing agent or broker forms a legal relationship with the homeowner to sell the property.  The listing agent’s responsibility and fiduciary duties are to the seller.
  3. Buyer’s Agent – A buyer’s agent or broker works with the buyer to locate a suitable property and negotiate a successful home purchase.  The buyer’s agent’s responsibility and fiduciary duties are to the buyer.
  4. Home Inspector – A home inspector can be hired by the seller before they put their home on the market or by the buyer when an offer has been accepted.  The inspector provides a comprehensive analysis of a home’s major systems and components.
  5. Loan Officer – A loan officer is a representative of a bank or financial institution.  They help customers identify their borrowing options and help them understand the terms of the loan.  A seller should also meet with a lender before putting their home on the market so they know the “big picture” of their financial situation.
  6. Appraiser – An appraiser works on behalf of the lender and provides a market analysis of the subject property. An appraiser’s finding is subjective and combined with market data of sold properties within the surrounding neighborhood.
  7. Insurance Agent – An insurance agent helps a home buyer determine the coverage needed and finds the right insurance policy for the home.
  8. Real Estate Attorney – In some states, real estate closings can only be conducted by an attorney.  They can give advice on all legal aspects of a real estate transaction. Such as drafting and reviewing contracts, help with how to take title and assist with the closing process.
  9. Escrow/Closing Officer – An escrow or closing officer is a non-biased third party who works with all participants to facilitate a successful closing of a real estate transaction. At the closing, the closing officer will collect the purchase money funds from the buyer and settlement costs from each party.  The will prepare and record all necessary documents to transfer ownership of the property.
  10. Title Company – The title company will search the title and provide title insurance policies to produce clear property titles and enable the efficient transfer of real estate.

Get my free ebook…7 Home Seller Tips before You Sell.  Do you live in Northeastern Ohio/Cleveland area and want to know what your home is worth?  Find out Today.  Looking to find a home in the Greater Cleveland area, get the most up-to-date listing…Search Like an Agent.  Get my free-ebook…10 Things You Need to Know Before Buying a Home.  Was your home listed and it expired?  Get your free expired report on what went wrong and how to fix it!

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Improve Your Credit Score

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creditscore10 Tips to Improve Your Credit Score 

There are no quick fixes for improving your credit score but over time you can raise it by consistently managing your finances.

  1. Pay your bills on time – This is the best way to improve your score.  It is never to late, find a system (calendar, App) to keep you on track. If you are going to be late, don’t avoid your creditors keep in contact with them.
  2. Keep credit card balances low – High outstanding debt can pull down your score. Don’t max out your credit cards all the time.
  3. Check your credit report for accuracy – It is possible there may be inaccurate information on your credit report that can be easily cleared up.  It this is the case, then you should contact the three credit reporting agencies to get it corrected (TransUnion, Experian, Equifax)
  4. Pay off debt rather than moving it around – Consolidating your credit card debt onto one care or spreading it over multiple cards will not improve your score in the long run.  The most effective way to improve your score is by simply paying down the amount you owe.
  5. Keep your credit cards – manage them responsibly – In general, having credit cards and installments loans that you pay on time will raise your score.  Someone who has no credit cards tends to have a lower score than someone who has managed credit cards responsibly.
  6. Don’t open multiple accounts too quickly – Opening too many accounts in too short of a time period can look risky because you are taking on a lot of possible debt.  Too many inquiries can hurt your credit score.
  7. Don’t open accounts you do not need – This approach could backfire and actually lower your score.
  8. Don’t close an account to remove it from your record – It is a myth that closing an account removes it from your credit report. In fact, closing accounts can sometimes hurt your score.
  9. Shop for a loan within a short period of time – FICO scores distinguish between a search for a single loan and a search for many new credit lines based in part on the length of time over which recent requests for credit occur.  If you shop for too many loans over a long length of time this could hurt your score.
  10. Contact your creditors or see a legitimate credit counselor if you are having financial difficulties –  This won’t improve your score, but the sooner you start managing your finances well and making timely payments will improve your score overtime.

Get my free e-book 7 Home Seller Tips before You Sell.  Looking to find a home, get the most up to date listing…Search Like an Agent.  Do you live in Northeastern Ohio/Cleveland area and want to know what your home is worth?  Find out Today.

New Year’s resolutions for homeowners

The end of the year is always a great time to reflect on the past year and look forward to the new one. Many people signify this fresh start with a New Year’s resolution. If you’re a homeowner, here are a few resolutions you may want to consider for your home.

Save energy

There are some simple ways to save energy (and a few bucks). Turning down your thermostat when you’re at work or sleeping is a great first step. A better option is to replace it with a programmable thermostat that will remember to do it for you.

Keep your home safe

Many people install new batteries in their smoke detectors on the day the time changes in the fall and spring. Did you forget? Make it a point to ensure that you have fresh batteries in your smoke detectors and carbon monoxide detectors. Don’t have a carbon monoxide detector? They are fairly inexpensive and as easy to install as a smoke alarm. While you’re at it, check to make sure your fire extinguishers are in working order.

Help the environment

Whether your community requires it or not, recycling helps the environment and is everyone’s responsibility. Save water by repairing dripping faucets, installing low-flow showerheads, and replacing old toilets with new water saving or dual-flush models. When buying new appliances or electronic equipment, be sure they carry the federal Energy Star seal for energy efficiency.

Save money

Home maintenance projects can help you prolong the life of your home and make things more efficient, and therefore, save you money in the long run. Changing the air filter on your central air unit every month or two helps you save energy and allows your system to run more efficiently. If you still have a standard water heater, draining the tank once a year removes any sediment buildup, which can make it last longer and work more efficiently.

Safety tips for fireplaces

If you’re in the market for a new home, no doubt you made the list of features that you want in your dream home. For many, a fireplace is one of those must haves.

Of course, there are several reasons to want a fireplace. From a practical standpoint, it is a cost-effective way to provide heat during the winter. It becomes a focal point for the gathering of friends and family, lending ambiance to the room it is in. At this time of year, it becomes a place for many homeowners to hang decorations during the holiday season.

There is, of course, a price to be paid for the warmth and memories. Every homeowner has to keep safety issues at top of mind when it comes to having a fireplace. You’ll keep your fireplace safe and operating properly and safely if you keep these safety tips in mind:

Keep it clean

Depending upon how often you use your fireplace, it is recommended that chimneys be swept at least once a year. Find a certified chimney sweep to come out in the late fall or early winter to remove soot and debris.

Check for damage

In addition to cleaning, most chimney sweeps should inspect the chimney structure for cracks, loose bricks or missing mortar when they are on the roof. In addition, chimney liners should be checked for damage.

Cap the chimney

In order to keep debris, birds and small animals from entering the chimney, a cap is placed on the chimney. The cap also needs to be examined for damage when the sweep is there.

What you burn makes a difference

Hardwoods include dense woods such as oak, hickory, ash and some fruit woods. “Seasoned” implies that the wood has been split and stored to dry for at least six months. Green woods and soft woods produce a flammable by-product called creosote, which can build up in the chimney and become flammable.

Building it right

Small fires generate less smoke and less creosote build-up. Additionally, a fire that is too large or too hot can damage the chimney. Logs should be placed at the rear of the fireplace on a metal grate. Don’t use flammable liquids to start the fire.

Use a spark guard

Even seasoned wood can crackle and pop. You can prevent embers from shooting out of the firebox with a mesh metal screen or glass fireplace doors.

Replacing the driveway: asphalt vs concrete

Whether you’re building a new home or have made the decision to replace your existing driveway, you’re going to face a decision as a homeowner: asphalt or concrete?

Although they are similar, the key differences will tell you whether you should choose asphalt or concrete. Here are the key points to consider what material your new driveway should be.

Price

Asphalt tends to be cheaper, but because it’s made of oil, when the price of oil is high, the cost of your asphalt driveway will be more. That being said, asphalt is more cost-effective than concrete, which means it could be a better choice if your driveway is very long.

Weathering

Asphalt is more desirable in areas where it gets cold because it’s less susceptible to cracking. Concrete offers advantages in warmer climates because it doesn’t get soft like asphalt does.

Longevity

Concrete driveways can last as long as 50 years when proper maintenance is performed. Asphalt, on the other hand, will typically last about 30 years.

Staining

Concrete and asphalt are both prone to staining; however, any discoloration is much less noticeable on the asphalt because it’s dark. The downside is that the oils in an asphalt driveway can be released and stick to the soles of your shoes, which can damage the carpet in your car or the rugs and furniture inside your home.

Aesthetics

Concrete comes in several decorative options. It can be stamped and can come in different colors. Asphalt comes in black.

Installation

Asphalt has the advantage over concrete. Asphalt driveways take about two days to install and you are able to drive on them the day after installation is complete. Installation of concrete driveways can take up to four days to install and you’ll have to wait 5-7 days after the installation is complete to drive on them.

A new driveway is not only functional, it increases the curb appeal of your home. When you make the decision to replace the driveway, make sure to check with the city codes administrator to determine what permits and licenses are necessary. Do your research before choosing a contractor and get several estimates before hiring one