Understanding your Credit Score when Buying a Home

Your credit score dictates whether you will be approved for a home loan or not, and what mortgage terms you are qualified for. If you really have a plan to buy a house, it is important that you know your credit score early on. Your FICO score is indirectly proportional to the interest rate that will be offered to you. If you have a higher credit score, you might get a smaller interest rate; if your credit score is low, you might receive a high-interest rate. 

You can determine your credit score by typing the required data into the software that analyses it and gives it values. Keep in mind that different lending institutions are not necessarily using the same scoring system, so don’t be surprised if you will be given different credit scores from different banks. 

Your credit score will be determined by the following factors:  

35% – Your Payment History  

30% – Amounts You Owe 

15% – Length of Your Credit History 

10% – Types of Credit Used 

10% – New Credit 

What is the ideal credit score? In general, a good credit score is from 340 to 850. If your credit score is within this range, it could mean that you will be getting a better deal from the lender. The lender believes that when you have a good credit rating, you pose a lesser risk of not paying what you owe them. 

If you will score more than 700 points, typically you will be given more financing range and lower interest rates. However, this doesn’t mean that you will be automatically not receiving any loan if your credit score is very low. Here is a look at the credit score to interest rate ratio: 

Up to 499: 1% 

500 – 549: 5% 

550 – 599: 7% 

600 – 649: 11% 

650 – 699: 16% 

700 – 749: 20% 

750 – 799: 29% 

Over 800: 11% 

The average credit score in America in 2016 is 695, that’s according to Value Penguin. 

When you apply for a home loan, most lenders use credit reports and scores from all three major credit reporting agencies which include Transunios, Equifax, and Experian. Once they receive your credit ratings from three different agencies, they will take the average scores from the three to use for your loan application. 

Before you apply for a mortgage, make sure that you all the things related to your finances are ironed out. Getting a good credit rating might mean that you can save thousands of dollars by having a low-interest rate.   

Luxury Real Estate – The Importance of Staying Positive

It is easy sometimes for homeowners to get overwhelmed by negative news and downward trends in the real estate market, including luxury real estate. In light of the recent news about home values across America hitting new lows, it is important to try your best to stay positive.

Owning a home is still one of the most sound and time-tested investments one can make. The luxury real estate market always goes through cycles – values go up, values go down. At each of these points, it is important to note that at any given time, either the buyer or the seller is at an advantage.

The Positives for Buyers:

Right now, it’s pretty easy to see that the advantages lie with the buyers. Now is a PERFECT time for anyone who has been looking for luxury real estate and luxury properties. There are so many amazing luxury properties for sale right now that if you have the means; incredible values are there for the picking!

During down economic situations, many families and homeowners are trying to find ways to cut expenditures and decrease their debt. Sometimes, this means selling their luxury property and finding something slightly more economical. These situations provide great opportunities for new luxury homebuyers.

With more and more luxury properties going on the market – the number of choices is increasing exponentially. It is becoming easier for buyers to find the luxury home that has everything that they are looking for. Each buyer has different needs and expectations, so having more and more options available, it is more likely that that perfect home will be available.

The Positives for Sellers:

So, how is any of this positive for sellers? Well, if sellers think in terms of the value lost, since the burst of the recent housing bubble – it might not seems very positive at all. However, just like any free market system, when prices go down, demand goes up! Sellers may not be getting the full value of the home in terms or recent prices, but most likely – depending on how long the sellers have owned the property – the value, in most cases, is still higher than the purchase value. It can still be a salvaged as a sound investment.

5 Important Things to Know When Selling Luxury Real Estate

Luxury real estate like villas, penthouses, and mansions, has started gaining prominence amongst affluent buyers. A luxury property owner can fetch some easy money, if he markets the property efficiently. As luxury property buyers rarely complain about a dearth of money, the deciding factor here would be the specifications, design, and the value for money that the luxury property has to offer. Here are 5 important things you should know when selling luxury real estate.

  1. Exuberant Staging Is Beneficial

Since the main appeal behind high-class property is its magnificence, the seller must capitalize on this. An important step in the selling process is the house staging. The seller must highlight all the good things about the property like a fancy kitchen counter, enormous library, trimmed gardens, and expensive furniture. The proper staging of the house always has a positive impact on the mind of the buyer. Seeing a place in all its glory is enough to convince buyers that they want the place.

  1. The Property Must Be Advertised

Luxury real estate demands a proper marketing plan that will bring it to the attention of prospective buyers. Since a lot of money goes into constructing luxury property, getting back the money with interest requires planned out advertising. Post an advertisement on every local property website and get in touch with realtors to inform them that your property is for sale. Every effort you make to advertise the property will further increase your chance of finding a buyer who would be willing to pay your asking price.

  1. Working with Your Agent Helps

It’s understandable to be a little wary of your agent, especially when it comes to an expensive, high-end property. Before hiring an agent, it’s always best to do some background research on their prior realty experience. If you’re impressed, it’s best to hire the agent as they will have more insight on selling your property.

  1. Don’t Avoid Showing the Property

While in some cases, creating an aura of mystery is an effective tool, this isn’t one of them. Don’t shy away from inviting potential buyers into the property. Show-off the property in all its magnificence. The more you display the property, the more buzz it will create in the realty market as this will ensure that you have a variety of buyers to choose from.

  1. Extra Incentives Are Advisable

Sometimes an extra push in the form of incentives is all it takes for sellers to convince buyers to purchase their property. In the case of luxury real estate, these incentives include things like an expensive painting, a collector’s edition of a renowned book, imported furniture, and high-end art pieces. When a potential buyer is conflicted between two similar properties, it’s incentives like these that are sure to make your property the chosen one.