You can’t have good credit unless you have debt. Sound like an oxymoron? It always has to me, but nevertheless it is a fact. As a Realtor, I am often in the position of raising awareness about repairing credit and even the importance of how the system works and what your current score is.
I can’t tell you how many times I’ve had people who have a 20% down payment on hand (in their mattress) but have no credit and are shocked when they can’t get a mortgage. Then there are those who have 15 different credit cards, bankruptcies, or repossessions, who are also amazed when they have their credit pulled and find it is rated poorly and they’re unable to secure a mortgage.
You should always know your credit score. Not only does it give you a sense of accomplishment when you see it go higher, but it will also alert you if something is happening that you’re not aware of, such as identity theft or erroneous reporting. There are various companies online that will allow you to check your score and some credit card companies also offer it.
Just be sure you’re looking at your FICO score; as this is what the majority of lenders/creditors will be looking at. FICO stands for Fair Isaac Corporation which created the system back in 1960. In order to even have a FICO score, you have to have an account of some type, whether revolving (credit card) or a set monthly installment (car loan) and it needs to have been reported to the credit bureau for at least six months.
People are often under the impression that paying off a card is a good way to raise your credit score – – Nope! Or that they should close an account to raise it – – No Sir! Paying down a credit card and maintaining it to around a 30% balance will raise your score more than paying it off. Also, the longer an account is open, the longer your history is and that is also advantageous.
It does not have to be a mystery. Keep in mind these simple steps:
- Paying your credit accounts on time has the more significant impact on your credit score.
- Don’t use more than 30% of your available credit on any one card – if you do, be sure to pay it down to that 30% at the end of that billing month.
- Don’t close out all your old accounts. Having an account open for a long period of time scores you credit score benefits.
- Use more than one type of credit, combining installment and revolving. Be sure you don’t get carried away. If you can’t pay it off in 30 days (revolving) you probably shouldn’t purchase it.
Most lenders require a credit score of 640 in order to purchase a home; though there are a few who have programs for scores less than that. It is pretty amazing though, because at 640 you’re only in the “Poor” rating for credit. If you want to secure a lower interest rate on a home, increasing your credit score is a great way to do that.
A simple way to look at it is this: Bad = 550 & below/ Poor 550-649/ Fair 650-699/ Good 700-749/Excellent 750+
If you have questions about mortgages and/or credit scores, please feel free to contact me. I work with some great lenders who are willing to help you raise that credit score and create a plan specifically for you. Purchasing a house is a great investment. Don’t get sidelined because of a surprise or non-existent credit score.
Based on number of transactions, March 2017 fell short in Saginaw County home sales when compared to a very robust March of last year, and even behind the 5 year March average. Don’t despair! If you are a buyer or seller there is still good news.
Despite the lower number of sales, Saginaw’s 12 month average sales price ending in March 2017 was at $104,314. This is up 3.33% over last year at the same time. I remember back in 2008 when the average home sale was at a whopping $64,143 – so we’ve made a lot of progress getting back to the “Pre-crash” price in 2005 and the average was just over $107,000.
Lots of numbers. What does it mean? Well, we can’t really formulate a trend from the low March sales. I’ll be keeping an eye on it to see if it was a statistical anomaly for the month. A slow March in essence is really a slowdown of activity in January. The plus side is the increase in home values for our various communities. That’s good news for sellers. This in turn, realistically is also good for buyers. Why? Well, all year we’ve seen low inventory of good homes. As word spreads that home prices are continuing to rise, more sellers are likely to get their homes on the market. This gives a buyer more choices, which also gives them more leverage when making an offer.
The March trend was different for Bay and Midland Counties, despite how closely tied our Mid-Michigan communities are. Bay County saw 25% more transactions this March over last year which is great; however the average sales price rose less than 1%. Midland also saw about a 20% increase in number of transactions over last March plus had a 6.13% increase in values.
Quarterly reports should be out soon and that will perhaps give a little more insight as to whether March was a trend or an anomaly. Always good to keep in touch with the heartbeat of your community. If you would like to know more specific information for your area, please feel free to call or email me. If you’d like to receive a free home market analysis – I’d love to hear from you.
~Build a better world by building a better you
- Monique Gilbert – Your Real Estate Matchmaker – Connecting Buyers & Sellers for a Perfect Match
Recently Saginaw was deemed the 2nd Best Housing Market in the United States. I know that seems to be contrary to what most people think when they ponder the state of Saginaw, with its loss of population and manufacturing jobs over the past decade. There were a lot of factors that went into the study which gave us this infamous title. Though many of the factors are good things for us; higher number of residential sales in 2016 than any other in 10 years, average sales price climbing, etc – there’s more to it than that; and it and of itself could be a series of articles. But my point today is with the current changes in our market, could real estate investing be a good avenue for you?
If you are active in the stock market you are well aware of the volatility over the past years. If you’re toward the end of your working age, or recently retired – you may have had to make drastic changes to your retirement plans due to extensive losses. What do you consider a good Return On Investment? (ROI) Many in the stock market are averaging 5-8%. You might be thrilled at a higher amount.
What if you purchased a home for $25,000 and put in $3,000 of repairs and rented it for $650-$800/month? Taking out taxes and insurance, even on a $650/month home, your income would be about $5,500. That in one year would be an APR ROI of almost 20%. Granted, you will occasionally need to do maintenance, perhaps pay a fee to a property management company. I would always suggest that for the first year, all of your rental income be kept in a designated savings account for future maintenance issues, as well as a good 10-15% each year.
With this income of 19.6%ROI annually, you would have a steady income and when the day came you wanted to sell, history tells us that you should get at least 100% of your original investment back as well. Why isn’t everyone doing this? Well, a lot of people are. I don’t have any stats about the percent of homes being purchased in Saginaw by out of area investors but I know it is much higher than any other time in the past ten years.
Let me be very clear that being a landlord, even if you hire a property management company, is not risk free. You need to do a great job in selecting tenants (or the PM co. does) You need to be sure you’re setting those maintenance funds aside. There will be tenants who do crazy things and cost you money.
You may decide the risk for damages would be less if you were dealing with more expensive rentals. For example I recently had a client who purchased a home for $60,000 in the Township and then rented it for $1300/month. That’s an awesome ROI, but a higher initial investment. You have to do what you think is best. And that might be nothing at all! But I believe it bears thinking about.
If you think investing might be worth looking into, feel free to call or email me. We have a great property management division here at Berkshire Hathaway too. If you want some honest advice I would be happy to sit down with you.
Is there anything worse than having a “Nightmare Neighbor”? I can think of one thing – being one! For any of you who might read my blog regularly, this topic might not seem to fit the norm of MoniqueKnowsRealEstate.com where most of my posts are topical issues about real estate stats, design ideas, & buyer or seller tips. A recent confrontation with a neighbor of my own prompted this article.
A typical Michigan Spring means anything goes. This year was no different with random snow flurries, cold temps, and a whole lot of rain. The rain played the instigator in my Nightmare Neighbor scene. My yard is just over an acre. It is quite long and narrow, with the house being situated about half the distance back. Last year I had a professional landscaping service do my weekly lawn maintenance. This year however, because my college daughter was going to be home and the fact I have 4 investment properties to maintain – I thought it would be a perfect time to get a rider and give my daughter a little extra cash. It so happened I had a client whose home I had for sale was moving out of the area and I purchased her mower. I brought it home, was able to get the front yard mowed, but the back was way too wet. A week passed, I had to get that back mowed! I went out to discover that my “new” used mower was broken. Ugh!! I couldn’t get anyone out right away to repair it and the landscaping company had already started their new season of routes and couldn’t fit me in.
The next weekend I took an entire Sunday off of work (which is a real rare thing) so I could spend the day mowing, weed-whacking, planting flowers and my vegetable garden. I was super excited because I love to work outdoors. I had gone to Lowe’s the previous Friday to purchase a new John Deere and it was to be delivered on Sunday. Let’s just say they had to make 3 deliveries on Sunday but I did end up with my mower. I hopped on with a smile on my face a vroomed right out to the back yard. I made it just around the back corner when I noticed a neighbor waving his arms frantically. I thought there was an emergency so I stopped and shut the mower down. He began screaming at me. What a disrespectful neighbor I was to have that long grass, my dandelions were blowing in his yard, my trees dropped sticks in his yard, I had a dead tree that needed to be cut… Which then escalated into “all the neighbors hate you” and a train of yells, shouts of obscenities, and criticisms which had absolutely nothing to do with the back part of my lawn being long. I was dumbfounded. I really just wanted to run, hide, and cry. Who was this person? What on earth prompted such rage? Never before in the almost 3 years I’ve lived there has my lawn been overdue for a cut – ever.
I thought about it long and hard. It was easy to decide my neighbor was a “Nightmare”. Who would get so crazy about a lawn? And why, I thought, if he had an issue – didn’t he just say something to me. Back came memories of growing up in a farming community, where when something needed to be done like a barn raising, a fencepost, or even a wedding reception – the neighbors all came! We were all friends or at least very friendly. We knew each other. I reckon if our lawn suddenly looked shabby – someone would have shown up with a casserole – on their lawnmower – dropped it off and cut the grass knowing something had to be wrong. That’s the life I grew up with.
What’s my point in sharing this story? Certainly not to trash my neighbor. I think however, that we need to remember “the old days” and apply them to today. Do you know your neighbors? You should. I imagine if I knew this neighbor a little bit better, he may have approached me that my dandelion seeds were bothering him. Or I may have known that something crazy was going on in his life that caused him to be extra stressed. Most of all though, it made me stop and think about what my neighbors might think. Just because it doesn’t bother me to have a random dandelion in my backyard doesn’t mean my neighbor doesn’t despise it. When I set my trash out on to the street on the day before trash pick-up, my neighbor might think it is horrible. When I drive my lawn tractor around the trees that are along the property line, which means the blade is facing out and it blows a bit of grass in their yard, I might think it is ok – they have a 5 acre yard after all and how else am I going to go around the tree closely? They might think it is rude. So, the crux of it all is as with many things; communication. Talk to your neighbors, ask them what they think. Find out what’s important to them, even though you might think it is ridiculous. Gee, kind of sounds like any relationship, right? And, I think a nice plate of homemade chocolate chip cookies goes a long way! Make your neighborhood a special place to be. 🙂
Thanks for reading my story – Feel free to check out my other blog posts, videos, and website for all kinds of real estate information – They’re all available on my website. http://www.homesofmidmichigan.com
I always love to read those letters people put together at the beginning of the New Year. It seems time passes so swiftly and many of the people we know and care about, or those whose adventures we like to follow, have drifted away and it gives us a chance to catch up. A quiet moment spent reading a note that brings smiles, sometimes tears, and often times a renewed sense of: It’s a new slate, a new beginning, let’s go get ’em! So, here I am on my blog writing my note about this past year. (a little late too! but it has been busy!!)
On a personal side my big events were: wedding, and off to school. I married off my oldest beautiful daughter, Cassandra Skylar to a wonderful man from Peru’. She has finished her Masters degree and is making a great contribution to the world as a social worker. Her hubby Ruben is currently obtaining his Master degree as well and will bless a lucky congregation as pastor. It was a wonderful event that brought lots of joy and floods of memories. Gone is my girly with the little ringlets who loved to run the house in her undies. (sorry Cass). Our youngest, Raven Leigh is now a sophomore in college, moved out this fall, and is pulling in a near 4.0 while studying the field of Speech Pathology. I am truly blessed as a mother. Oh, I can’t forget my new dog – or the old one! We were grieved to have lost our fabulous Scruffy the labradoodle of 9 years. 😦 He was about the smartest and most loyal dog I ever knew. Just a few months ago we have added Abbott, AKA #AbbottTheRealtorDog. Lol. He accompanies me to work most days and loves to pester the cats. 🙂
One year ago I was just beginning my dream of becoming one of Mid-Michigan’s best and well known Realtors and establishing my new property investment company…. formulating a dream of success, figuring out the keys to unlock the doors of a new level. It became so much more than that. As I began working with Gary Holt of Holt Marketing & Management, I realized there’s a whole lot more to it than just a business plan. He made me study myself. I can’t tell you the countless hours I spent testing, researching, etc. both myself and the dynamics of others. I needed to find out my strengths and weaknesses as a person in order to better be able to serve my clients. It isn’t just about the advertising, but about serving people, gaining trust, providing excellent customer service, answering questions, honesty, and being real and being available.
Once I began to understand myself on a personal level, we began to formulate a very specific plan. Then we began the process of working with Rich, also of Holt, to build a brand around me. That was an adventure too! I have been so pleased with the results from both Gary and Rich. Not only was “Your Real Estate Matchmaker – Connecting Buyers and Sellers for a Perfect Match” born, but the inner workings of a very structured plan. It is a huge amount of work and a huge amount of stress and responsibility. We’re getting there and it is paying off. I am proud to bring integrity, experience, knowledge, and professionalism to my field and my community.
If you’ve received this in your email – chances are I’ve been blessed to work with you in the past or perhaps call you family, friend, or all of the above. Thank you for making my life full of blessings. A special thanks to my family; Don, Cass, Rave, & Ruben for all your support this last year. It has been tiring, it has been fulfilling, and I know it is just the beginning to a great year!
The new year has begun with a bang – 4 purchase agreements just today! I would love to assist you or a family member, or friend you may have who is in need of a Realtor or a referral. As always, feel free to give me a call at 989-475-2958 or email me today! Many blessings to you and yours this coming year! God bless. 🙂
Why, Why, Why YOU should know your credit score!
Come on, shout it out! What’s your score? Don’t know? Let me tell you why you should, how it could be costing you money, what to do about it and so on.
In this crazy world of identity theft and online everything, one would think we all pay attention to our credit score. But, I’m here to tell you that most people don’t. And it is costing a lot of them a small fortune – and putting a big ole damper on their home-ownership dreams. Not only that, a poor credit score costs you thousands by way of higher auto insurance and interest payments! I have a really cute home here in a really nice city neighborhood in Saginaw for sale at $69,000. When I started my FB advertising, I literally had more than 100 people respond within days. I have showed this home a good 30 times (Because I semi pre-qualified over the phone). I have yet to find a buyer with a credit score higher than 580. And most of them it seems, are working folk who simply don’t understand what a credit score is, how various things affect it, and how to make it better. Oddly enough, not being in debt is not the key to a high credit score!
I interviewed Doug D’Angelo, of Lake Michigan Credit Union recently for some simple facts and tips about credit scores. He has been a great resource to me over the years, working to assist buyers achieve their home-ownership dreams. Here are a few tips:
- Pay your bills on time – even a few days late makes a difference; not only with your credit score but the interest you’re paying.
- pay off any collections and judgments; they have a large impact.
- Keep your balance below 30% of the credit limit (but not at a zero) for the optimal credit score help.
- Minimize outstanding debt, but having a solid 3 sources reporting is best (auto, credit card) But again, keep your sources of debt at or below that 30%.
- Avoid overextending your self. Lenders don’t like to see that 50% of you income is going to pay off your debts
- AFTER BANKRUPTCY or Foreclosure….
- The quickest you can apply for a mortgage after filing Chapter 7 is two years from the date of discharge.
- The quickest after Chapter 13 is after 1 year of payments made by the trustee with ZERO LATE payments
I have found keeping a good old fashioned budget book works the best for me. Log in what your expected income is each week and plug in where all your bills are due, so that when you get your paycheck, you already know what bills you need to pay. If possible, set your bills up for online payment with your bank. I don’t like to do that with each individual creditor, as I don’t have control in case of an emergency but I have all my credit reporting bills set up for an auto payment with my personal bank online. This allows me to schedule them monthly and change the amount I’m paying, right up to the day before it is paid. 🙂
I am amazed each and every day at how many people would like to own a home and can even afford one; but their dreams are dashed because of credit score. You know how you always say, “Time flies”? Well, it does; so get to work on your credit and before you know it – you can call me and say, “Monique find me my dream home!!” …. and I’ll get right on it! 🙂
For those of you with excellent credit scores – Congratulations! and maybe you’d like to comment about how you like to organize and stay ahead of the game. Anyone who would like some specific information about their credit is welcome to call me. If you aren’t able to get yourself a home for Christmas this year – I’m sure with a little diligence, we can get you one for the next! Have an awesome day and remember I love referrals too.