Sunrise Homes & Renovations, Inc.

Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge Headaches

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Understanding Your FICO Score and Why Small Credit Mistakes Can Cause Huge HeadachesMany people all over the world are dealing with issues involving debt or poor credit history, but most aren’t necessarily aware of what exactly makes up their credit score. Unfortunately, it might seem like it’s the big stuff that counts when it comes to credit, but little things can have a significant impact on your financial health. If you’re looking to improve your understanding and your finances, here’s what you need to know about small mistakes and your FICO score.

Making Late Payments

The due date on your bills might seem like an advisory, but whether we’re talking about a student loan, a credit card payment or your telephone bill, late payments can add up. Your payment history constitutes 35% of your total FICO score, which means that even a couple of late payments can have a marked impact on your overall credit. Instead of leaving this to chance, set aside a day each month before your bills are due to ensure they’re all paid off.

Applying For New Credit

It’s often the case that a store will offer special deals if you sign up for their own in-house credit card, but this can cost you big since the amounts you owe make up 30% of your credit score. Also, because lenders will often assume that you’ve run out of credit if you apply for a new card, applying for new credit can be a red mark against your FICO score. 

Forgetting Credit Altogether

It might seem like the best possible option for avoiding credit issues is to avoid using credit altogether, but your credit history constitutes 15% of your FICO score. This means that you should have at least one credit card in your possession so that you can use it to build a history of lending success. While you won’t want to use more than 30% of your credit limit, it’s important to show proven experience in paying back your lenders.

Many people think that bad credit is the result of overspending and huge debt amounts, but your FICO score is largely determined by your payment history and your available credit. If you’re trying to buy a home in the near future, contact your local real estate professional for more information.

Finding Your Latte Factor: 3 Ways to Find the Money to Make Extra Mortgage Payments

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Finding Your Latte Factor: 3 Ways to Find the Money to Make Extra Mortgage PaymentsIt’s not uncommon for a homeowner to want to pay more than the minimum monthly mortgage payment on their home. However, just because it can seem hard to come up with the funds on a monthly basis doesn’t mean it’s not possible to find the money for extra mortgage payments each year. If you’re wondering how you can pay down your mortgage debt much sooner with extra money, here are some tricks you may want to try.

Relinquish Your Refund

Many people look forward to tax time because it’s an opportunity to spend their refund on shopping, dining or a much-needed vacation. However, using your tax refund to pay down your debt can actually be a satisfying way to put more down on your mortgage and achieve something lasting from that extra bit of cash. While you may want to set some aside for an outing or a special treat, the amount remaining on your mortgage will seriously benefit from the extra payment.

Re-Tool Your Budget

If you’ve been successful at making your mortgage payments, it’s likely that you have a working budget that you stick to each month. But like any plan, a budget can change. If you haven’t done so in a while, it’s worth sitting down to re-calculate your monthly income and expenses. There’s a good chance that some expenses exist that you can pare down or get rid of entirely. While it may not make a significant difference in one month, small amounts will add up over time.

Plan A Yard Sale

It’s easy to acquire a lot of things that you don’t necessarily use, whether it’s technology or kitchenware or home decorations. Fortunately, planning a yard sale for your infrequently used items can be a great way to come up with a small fortune to pay off your mortgage sooner. Of course, you’ll need to be ready to haggle to get the prices you’re looking for. And don’t forget to get the locals involved and make it a neighborhood event for even more selling success.

It may seem nearly impossible to come up with the money to put more down on your mortgage, but using your tax refund and re-tooling your budget can easily add up to savings that make a difference! If you’re considering buying a new home in the future, contact your trusted real estate professional for more information.

With Mortgage Rates This Low, Should You Dive In? 3 Reasons Why Now Might Be the Time

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With Mortgage Rates This Low, Should You Lock In? 3 Reasons Why Now Might Be the TimeWhether you’ve just finished school or are about to start a family, investing in a home can be one of the biggest financial decisions of your life. But as you’ll soon discover, there are a number of considerations you’ll need to make. It can be difficult to know whether to get a short-term or long-term mortgage, or how long of an amortization period you’ll need. Read on below for three questions that will help you to make your decision, as now is the best time to dive into the market.

Do You Have A Down Payment?

There are a lot of numbers mentioned when it comes to the down payment, from 5% to cash only offers, but 20% is the ideal percentage to put down when it comes to buying a home. Because putting 20% down will enable you to avoid having to pay Private Mortgage Insurance (PMI), you’ll be able to lower your costs of home ownership over time. While 20% isn’t the be-all-end-all if you’re really ready to hit the market, it’s worth re-tooling your budget to save up.

Will You Struggle To Make Ends Meet?

Lower mortgage rates can certainly improve your overall outlook for investing in a home, but buying a home can be financially debilitating for many people. While you’ll be required to make your monthly mortgage payment, there will also be insurance costs, property taxes, home maintenance and other associated fees that add up. If you feel it’s going to be a huge financial risk to sustain home ownership, it may be worth sitting down with a mortgage professional to go over the numbers.

Are You Ready For Ownership?

Home ownership is often considered a rite of passage as one gets older, but it’s important to determine how a new home will fit into your current lifestyle. The costs of home ownership are usually higher than renting and you’ll have to take care of things like the yard and general home maintenance yourself. It might not be the best time if a home strongly imposes on your lifestyle, but if you’re looking forward to domestic duties, it can be a step in the right direction.

Mortgage rates have been hovering relatively low for a few years, but it’s important to know that home ownership is right for you before moving forward. If you’re currently contemplating a home in your area, contact your trusted real estate professional for more information.

Forget About the Bank of Mom and Dad — Here’s How You Can Save Your Own Down Payment

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Forget About the Bank of Mom and Dad -- Here's How You Can Save Your Own Down PaymentAre you considering buying a home for the first time? For some, it can seem nearly impossible to come up with the funds for the down payment. Fortunately, there are a few ways that you can save a little over time and not have to borrow from the “Bank of Mom and Dad”. If you’re looking to invest in a home in the short-term and are looking for solutions to save up, here are some tips on how to get to your down payment amount more quickly.

Create A Budget

Most people don’t like the idea of a budget, but few things are going to help you reach your financial goals like having one. Instead of sticking your head in the sand, add the numbers up and see approximately how much you’re spending each month. It may not seem like it, but getting a sense of what your monthly costs are can help you get a good idea of your overall financial picture and how much you really should be spending.

Get An Extra Job

Whether you want to do a freelance job on the side or get some part-time work, there are few things that are going to help you achieve your goal of home ownership like a little extra money. It may seem like a drag to go to a part-time gig from your full-time job, but it can be well worth it when you begin to see your bank account fill up. It’s just important that your part-time gig pays enough that it’s going to make up for the extra time you’ll be giving up.

Trim The Excess Costs

Now that you’ve got some extra money coming in and you’ve crafted a budget, you’re certainly on the right track. However, indulging in life’s little luxuries can eat away at your savings. While you’ll want to keep a little aside for meals out or entertainment, if you have other sizeable costs you’ll want to eliminate these in order to save for your greater goal.

It can take some time to save up for a down payment, but you may be able to avoid borrowing money if you bring in more each month and get rid of excess costs. For more information, contact your local real estate professional and we’ll be happy to help.

Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes — and Here’s How

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Can I Qualify for a Mortgage After Declaring Bankruptcy? Yes -- and Here's HowIt may feel like a daunting task to consider buying a home after you’ve declared bankruptcy, and there’s no doubt that it’s an uphill battle. Fortunately, while you’ll have hard work ahead, there are things you can do in order to make your dream of home ownership a possibility. Whether you’ve just declared bankruptcy or some time has passed, here are some things you should consider before getting into the market.

Wait It Out

It might not be what you want to hear, but you’ll have to wait before you purchase a home following bankruptcy. Since lenders will not want to take the risk on someone that has proven to have poor financial habits, they will require a waiting period in order for the credit risk you pose to improve. While this may seem like a long time, take the opportunity to improve your financial habits so you can be amply prepared when the time comes.

Build Up Your Credit

In order to own a home, you’ll need to develop some solid financial habits, and that means getting on top of your finances even in times when it feels like you have no leverage. Ensure you get a copy of your credit report and, if you notice any errors, reach out to the credit bureau for corrections. It’s also a good idea to consider applying for a secured credit card and ensure that you pay all of your bills on time. While it might feel like a lengthy task, developing good habits will have a positive impact on your credit over time.

Prepare For Your Payment

When it comes to a poor credit history, you’ll need to pull out every stop you can to convince lenders that you’re a solid financial bet. Write up a budget for yourself and save a sizable sum for your down payment each month. It’s possible that 10 or 15% down will do, but a 20% down payment will help you avoid private mortgage insurance (PMI) and will go further in convincing lenders of your reliability.

It’s more than a little disheartening to have to deal with bankruptcy, but by waiting it out and developing good financial habits in the interim, you’ll be well on your way to buying a home. If you’re currently preparing to purchase, contact your trusted real estate professional for more information.

The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best Option

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The 10-year Mortgage: Why a Shorter Amortization Period Can Be Your Best OptionFrom ‘down payment’ to ‘adjustable rate’ to ‘debt-to-income’ ratio, there are so many terms involved in the mortgage process that it can be hard to learn them all and keep them straight. However, whether or not you’ve heard it, the term ‘amortization period’ might be one of the most important ones associated with your financial well-being. If you’re currently considering the period of loan you should choose, here are some things to think about before taking on a term.

What Is Amortization?

Used to refer to the length of time it takes to pay off your mortgage loan, a typical amortization period is 25 years. However, there are many periods over which homebuyers can choose to pay off their mortgage. While many homeowners opt for what works best for them, it can be the case that a shorter mortgage period will actually be more financially beneficial in the long run. It may not only mean lower overall costs, it may also mean financial freedom from a loan much sooner than originally anticipated.

The ‘Principal’ Of The Matter

It’s important to have a monthly mortgage payment amount that’s sustainable, but a shorter amortization period means that you will be paying a higher amount on the principal and paying more on the actual loan amount. While a longer amortization period will add up to more interest payments and less paid on the loan cost each month, a shorter period can end up costing you less for your home when all’s said and done.

Considering Your Loan Period

It goes without saying that a shorter amortization period will pay down the principal sooner and cost less over time, but that doesn’t mean that it’s the best choice for you. Because your monthly payment will be taking a sizeable chunk out of your salary, it may be difficult to swing a higher payment in order to pay off your loan in 10 years. If it’s doable without compromising your quality of life, you may want to choose this option, but if there’s too much sacrifice you may want to opt for a longer loan period.

Everyone has a choice in the amortization period that works for them, but it’s important to make your decision based on what works for you and will be beneficial for your finances. If you’re currently getting prepared to invest in a home, contact your trusted real estate professional for more information.