ComeBuyAHouse.com » first time homebuyer

Keep Your Credit Report Healthy

hensley.lynette — Thu, 17 Jun 2010 17:02:31 +0000

Most people would rather think about water skiing or tulips than credit scores, at least until they apply for a mortgage or some other kind of loan. But it’s a good idea to pay attention, however briefly, to your own credit situation.

Here’s How It Works
Credit scores give lenders an idea of your ability to repay loans. But your score isn’t determined by the lender; rather, several credit information bureaus compile and calculate them. Your credit report shows all of your outstanding debts: credit cards, mortgages, student loans, car loans etc. The report also provides your payment history with respect to each of these debts.

Things to Know
Each time you apply for credit, your credit report is checked which can cause your score to drop slightly. So when you receive those junk mail “pre-approvals” don’t be tempted to apply simply because they are offered to you. Too many open credit cards, credit cards charged to the hilt, or 30+ days late payments can cause credit headaches. Judgments and collections will cause bigger problems and need to be paid before a mortgage lender will close a loan. Please call us, we’re never too busy to offer guidance with your credit. There are often very simple solutions.

Now the Serious Stuff
It makes sense that mortgage foreclosures, bankruptcies and vehicle repossessions tend to give lenders pause. However, if enough years have passed and a clean credit history has replaced any “kisses of death”, lenders will take that into account.

No Need for Hypochondria
People who tend to be very careful with credit often think that being a few days late on a utility bill is going to sink their credit scores into bad credit risk territory. Not so! Payments made after the next due date are considered 30 days late. However, you’re still better off paying your bills on time–who wants to pay credit card fees or risk a slow mail delivery?!

Yearly Checkups
It’s a great idea to get a copy of your credit report yearly. Even when you know you’ve been careful with your payments sometimes the wrong information shows up on credit reports. A similar name or an incorrectly entered social security number can appear without your knowledge. You can challenge the error with the creditor, or with the credit reporting agency. Either way, it’s important to fix it as soon as possible.

Lynette Hensley
Associate Broker

Buying vs. Renting

hensley.lynette — Thu, 22 Apr 2010 20:06:18 +0000

If you’re still renting because you don’t think you can afford to buy, try this:

Take your current rent and multiply that by 12 (months in a year). Then take that number and multiply that by 30 (number of years for a typical mortgage). If the result is greater than the average price of homes in your area, you can afford to buy!

By the way, the median home price in King County last year (2009) was $380,000. The median price in Snohomish County was $299,950.

When to Buy?

This is a GREAT time for buyers. Home prices are down, and interest rates are still at or near record lows. This makes now an affordable time to enter the market.

The Investment

Build up your equity. Don’t pay rent and help your landlord build up his equity. Homeowner tax advantages include interest and property tax deductions. Payments to principal put money back in your pocket. Money spent on rent is just gone.

The Dream

Start small. Your first house may not be your dream home, but smaller houses typically appreciate considerably faster — about 20% – than larger ones. It’s an advantage to become a homeowner sooner rather than later.

Rent for	Example of Savings	Buy For
	5% interest/30 year loan	$350K
	Loan (P&I Payments)	$1879
	Taxes & Insurance	$325
$1500	Rent	N/A
$1500	Monthly Payment	$2204
	Monthly Interest	$1458
	Property tax	$275
	Monthly deductible	$1733
X.32%	Tax rate	X.32%
	Monthly Tax savings	$485
$1500	Monthly payments	$2204
	Less Tax savings	$485
	Less Principal reduction	$421
$1500	Now Compare	$1298

At your service!
Lynette Hensley
Associate Broker

Title Shows an Unpaid Tax Balance

hensley.lynette — Sat, 04 Jul 2009 05:46:44 +0000

Question:

Schedule B in the special exceptions section B paragraph 2, where it says General & Special Taxes there shows an unpaid balance of $1345.09. Is that something we have to pay? Do we have to pay for it on or before closing?

Answer:

Property taxes are paid 1/2 at a time, in April and October. The October payment hasn’t been made yet, which is what’s showing. The taxes are prorated between the buyer and the seller as of closing day. That’s what pre-paids are for–to have enough $ on hand for your mortgage servicer to pay your taxes when they come due. So you will only pay for taxes during the period of time you own the house, not for the seller’s taxes.

Good question!

Lynette Hensley
Associate Broker

First Time Homebuyer Tax Credit

hensley.lynette — Fri, 29 May 2009 06:06:19 +0000

Realtors are working hard to make it possible for first time homebuyers who are eligible for the tax credit to be able to use that $8000 at closing. As of right now, it’s simply a tax credit, which you can take while filing your 2009 taxes, or you can revise your 2008 taxes, or if you haven’t yet filed for 2008, you can take the credit there.

There are income limitations, and you must live in the home for three years or pay the credit back. But all in all, it’s a great deal! I’ve included a link to a PowerPoint presentation with loads of details. Do you qualify?

Link to an explanation of the credit

Link to the IRS form to take the credit

Lynette Hensley
Associate Broker