Sunrise Homes & Renovations, Inc.

How To Get Your Free Annual Credit Report And Why You Need It

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How To Get Your Free Annual Credit Report And Why You Need ItYour credit report influences whether or not you’ll qualify for a mortgage and what kind of interest you’ll pay on that loan. This isn’t something you can safely ignore. Smart homebuyers understand the importance of monitoring credit scores and credit reports. Here is some information about how to get your credit report.

Free Credit Report Available

You’re entitled to free credit report, according to the Fair Credit Reporting Act. You can get one free report each year from each of the three major credit bureaus; Experian, Equifax and Transunion.

The easiest way to get your free report is to go to AnnualCreditReport.com. This is the official site that was originally established by the Fair Credit Reporting Act. 

How To Get Your Free Credit Report

Once you reach the site, create an account by registering. Have as much of your available credit information available when you request your free credit report. The reason is because the site will need to verify that it’s actually you requesting the credit report. If you have your information at hand, it will be easier and faster to confirm your identity.

This is just a process that the site has in place to protect your identity from fraud. They might ask you things like past residences, past credit card companies, or something else. 

Why You Need To Get Your Free Annual Credit Report

When you apply for a home loan, the lender will pull your credit report and review it. They’ll look for signs that you are a good credit risk. Things they consider include how you handle your debt to income ratio, whether or not you pay your bills on time and if you have any negative notations on your credit report.

For this reason, you should look at your own credit report before applying for a mortgage. This gives you a chance to fix anything that is incorrect in your credit report and an opportunity to improve your credit report if it’s not in great shape. 

You Can Help Prevent Identity Fraud

Another important reason to review your free annual credit report is to prevent fraud. If you see anything unfamiliar on your report, such as loans you didn’t take out or balances for things you don’t recognize, you can immediately act on those issues so they don’t affect your chance at getting approved for a home loan.

Always be proactive when it comes to your credit history. By availing of your right to a free annual credit report, you can ensure that your credit is in as good as possible condition when you go to apply for a mortgage.

If you are looking for a new home or interested in listing your current property, be sure to consult with your trusted real estate professional.

More Home Loan Options Now Available For Borrowers With Bad Credit

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More Home Loan Options Now Available For Borrowers With Bad CreditFor a long time after the real estate housing crisis in 2008, buyers with a poor credit history had a difficult time finding mortgage financing. It was a problem that trapped those seeking to buy a home because so many lost their homes from the inability to pay their mortgages.

Some suffered damage to their credit history that was severe. Millions filed for bankruptcy.

Not only did mortgage lending requirements get stricter for home buyers, but the funds available for home loans were also severely reduced. Even those with a good credit history found it more difficult to qualify for mortgage financing.

Time For A Second Chance

Now, there is a much better environment for homebuyers with a bad credit history who are seeking a loan. Those with a bankruptcy on their record, which was settled at least ten years ago, will see the bankruptcy taken off their credit history. Suddenly, their credit score may increase dramatically.

Unconventional Financing

Conventional financing is available for those with decent credit. This includes attractive terms and conditions for FHA loans and other federally-based loan programs. Those with bad credit may not qualify for these loans. If they want to buy a home, their only option is to use unconventional financing, also called non-qualified mortgages (non-QM).

Unconventional financing has higher costs and no federal insurance. In 2008, these non-QM loans were a total of $65 billion per year. In 2009, this figure dropped to $10 billion and, in 2010, the low of $8 billion.

Since 2010, the availability of these non-QM loans steadily increased. By 2018, the total amount of these loans was up to $45 billion. That figure will be higher in 2019.

Is There Another Real Estate Bubble Happening?

Are we back to where we were before when the real estate market collapsed in 2008? As far as the total amount of non-QM loans, we are close. However, the qualifying standards for these loans are stricter than a decade ago.

There is less predatory lending where borrowers who do not truly qualify get a no-doc loan without proving income. Before those predatory loans often had a teaser introductory rate that quickly escalated to an amount that made it impossible for the home buyer to continue to make their mortgage payments. There are fewer of these loans now.

Summary

Besides the big picture real-estate-bubble worries, the positive news is that borrowers with a poor credit history can now participate in the housing market again.

Be prudent when considering a mortgage and carefully think about the ability to make the monthly payments. Read all the details of the loan requirements carefully. Use competent professional advice from a trusted home mortgage professional to make sure there is a very clear understanding of the loan terms and conditions.

When you have your financing secure, be sure to consult with your trusted real estate professional to help you find your new home.

What Causes Mortgage Interest Rates To Fluctuate?

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What Causes Mortgage Interest Rates To FluctuateThe mortgage interest rate represents the cost of borrowing money to purchase a property. Mortgage interest rates are not fixed; that is, they fluctuate from one period of time to the next.

Many different factors play into what your mortgage interest rate will finally turn out to be. Some of these factors have to deal with the economy and government decisions. Other factors have to do with your personal financial situation.

Finally, mortgage interest rates can differ between lending institutions, which is why you may get different mortgage interest rate quotes from different places.

Economic Factors That Cause Mortgage Interest Rates To Fluctuate

Mortgage interest rates are somewhat connected to the stock market. When the stock market indexes go up, mortgage rates tend to rise as well. The Consumer Price Index is a measure of inflation rates. When inflation rises, you can expect to see mortgage interest rates go up, too. Other economic factors that affect mortgage interest rates include Data from the Gross Domestic Product, Consumer Confidence, and Home Sales reports.

Government Decisions That Lead To Mortgage Interest Rate Changes

The federal government keeps close tabs on the economy. Government officials are always making adjustments in order to keep the economy strong. Periodically, the government will raise or lower key interest rates in order to adjust bank lending economics. When the government raises or lowers the Federal Funds interest rate, it is always announced in the media.

Personal Financials And Your Mortgage Interest Rate

Finally, your personal financial situation influences what kind of mortgage interest rate your lender offers. A higher credit score will generally get you a lower mortgage interest rate. This is another reason why it’s always a good idea to review and improve your credit score before applying for a mortgage.

When you are ready to apply for a mortgage, meet with a trusted home mortgage professional. Because mortgage interest rates fluctuate often, you could find that the interest rate gets higher in the short time in which you’re still shopping for your home. Once you do find an attractive program for your personal situation, be sure that you are ready to take the necessary steps to lock in that rate.

If you are interested in buying a new home or listing your current property, be sure to contact your trusted real estate professional.

 

 

Expanding Opportunities For Home-Buying In ‘Opportunity Zones’

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Expanding Opportunities For Home-Buying In 'Opportunity Zones'Opportunity Zones were created by the 2017 Tax Cuts and Jobs Act to encourage investors with capital gains on other investments to invest that money in low-income and undercapitalized communities. They get a reward of deferring capital gains tax. They avoid a portion of it altogether if they keep the investment for five years or longer. 

What started with a trickle of a few Opportunity Zones scattered around the country is now a deluge with over 3,000 approved Opportunity Zones approved in just about every part of America. 4,700 more areas may also qualify.

Opportunity Zones Expanded Dramatically

The very generous definition of Opportunity Zones not only includes poorer areas but it also includes wealthy areas within larger poor areas. Some are wealthier areas adjacent to poor areas. For example, there are Opportunity Zones in Manhattan, which is an area not typically thought of as low-income or undercapitalized.

Opportunities In Opportunity Zones

The tax incentives along with the current easy financing from real estate lenders are stimulating development projects in Opportunity Zones. Investors may increase returns on real-estate investments by up to 50% for projects in these areas. 

The highest returns, based on the tax savings, are for those that invest before the end of 2019 and hold the investment for seven years until 2026. They get a capital gains step-up of 15%. After that, the tax benefits go down to a capital gains step-up of 10%.

Homes In Opportunity Zones

Another attractive characteristic is that the price of single-family homes in many Opportunity Zones is a bargain. The median price of homes in almost half of the Opportunity Zones is less than $150,000. This compares favorably to the national median home price of $266,000. 

Moreover, homes in many Opportunity Zones are less than half the price of an adjacent area. The median rents in the Opportunity Zones are not as depressed as the home prices.

For real estate investors looking for cash-flow positive rental properties to acquire for a portfolio, these homes may rent for enough to pay the carrying costs.

For home buyers, these bargain prices may mean it pays to buy a home on the edge of an Opportunity Zone. If the home is adjacent to a nicer neighborhood, the upside potential for appreciation in home value may be enhanced.

Opportunities for low-cost homes exist in the Midwest, which has 73% of its Opportunity Zones with homes that cost below $150,000. The portion in the South is 57% and in the North East, it is 53%. Florida has over 300 Opportunity Zones. Pennsylvania has over 150. Tennessee has about 140. Those are states worth considering.

Summary

Looking for home-buying opportunities in newly-designated Opportunity Zones is attractive for real estate investors building up a portfolio of rental properties and for homebuyers who are looking for a bargained-price home.

If you are in the market for a new home or investment opportunity, be sure to consult with your trusted real estate professional.

How To Crowdfund A Renovation Project

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How To Crowdfund A Renovation ProjectCrowdfunding came into prominence with the Jumpstart Our Business Startups (JOBS) Act that President Obama signed into law during 2012 and subsequent enhancements. The JOBS Act made it easier for startups to raise money and for the first time allowed the legal ability to advertise the investments and accept small investors.

Innovate And Renovate

Crowdfunding is useful for many projects. The method raises money to create new products, make documentary films, and for many kinds of fashion items. Crowdfunding successfully raises money for real estate transactions. 

Smaller investors participate in real estate projects that they would otherwise not have enough investment money to create on their own. They may invest a few hundred or a few thousand dollars. When their smaller investment money combines with all the others, the project raises enough money.

One thing that makes crowdfunding projects work is their popularity. Affinity groups who have a special interest in certain things invest money in projects related to something that they like.

One application of this motivational factor is to raise money using crowdfunding to renovate buildings with a historical value or that otherwise attract the interest of the public. The process does not have to start with money. It can start with crowd sourcing ideas.

The CLUE® Mansion

A fun example is the Hasbro Company teamed up with Houzz to get innovative ideas from interior designers about how to renovate the CLUE® Mansion. The mansion is a backdrop for the popular board game.

This promotion celebrates the game’s 70th anniversary. The mansion’s style in the game stayed the same since the game debuted in 1949. The winning room designs, selected by fans, will be part of a new version of the game.

There is no reason to stop there. A real mansion can be renovated to match the game. This could be a CLUE® museum and could offer escape rooms as a money-making enterprise. This is just an idea at this moment. Perhaps, someone will take this up and run with it.

Crowdfunding Renovations

The point is, historic buildings that are of interest may need renovation funds that can be raised using crowdfunding. Those who have an interest in the building from the local community and elsewhere can support the project by investing in the renovation with a small comfortable amount.

Summary

Renovation projects are not easy to finance using traditional lenders. However, if a thousand people invest $100 each that is $100,000 for a renovation project in your community. Paying back the loan can come from a portion of the entrance fees.

Hopefully, this will spark continued interest in preserving and restoring historic homes, which are a terrific part of the American heritage.

If you are interested in purchasing a new home or listing your current property, be sure to consult with your trusted real estate professional.

What Makes Up A PITI Mortgage Payment?

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What Makes Up A PITI Mortgage PaymentMany mortgage payments are made up of four parts, called PITI. PITI is an acronym that stands for principal, interest, tax, and insurance. It’s important to understand PITI because it is the real number you need to use in order to find out how much mortgage you can afford to pay each month.

One of the biggest mistakes first-time homebuyers make is using only the principal plus interest figure to calculate how much they’ll be paying every month for their mortgage. Then, when the lender comes back and denies them, the prospective buyer is confused. Knowing and understanding PITI will put you back in the driver’s seat with your home buying goal.

Principal

The principal part of your mortgage payment represents the amount of money that you borrow over the terms of the loan. For instance, if you borrow $100,000 and you have 20 years to pay them back, the principal that you’ll pay each month equals $100,000 divided by 20.

Interest

The interest portion of your mortgage payment is the percentage rate that your lender is charging you to borrow from them. Another way of looking at the interest is to think of it as the cost of borrowing money. Interest will be spread out over the length of the loan, just like the principal payment.

Tax

The tax portion of your monthly mortgage payment pays for real estate and/or property taxes. Real estate taxes are assessed by the local government where the properties located. The tax rate is determined by the government and is not influenced by your personal credit score.

Insurance

The insurance part of your monthly mortgage payment pays for homeowner’s insurance and/or private mortgage insurance. If you put less than 20% down on your home purchase, you’re required to have private mortgage insurance. This amount can add considerably to your monthly mortgage payment, so it’s worth it to try to hit that 20% threshold.

Otherwise, you have to wait until your loan to value ratio is 80/20. After that, you can request to drop the private mortgage insurance, but the homeowner’s insurance will still be part of your monthly payment.

Now that you understand what makes up a PITI mortgage payment, you’ll be better prepared to plan for your monthly budget that includes a mortgage payment.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.