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Boost Your Credit

Looking to boost your credit score? Here are some actions you can take to make an impact quickly!

 

1. Even the score. Any inaccuracies in your credit history can lead to an unfair score. Check your report at least once per year to confirm the accuracy of the information being reported. If you do find something that looks wrong, you can file a dispute with the major credit bureaus. Be sure to have your bank statements and receipts handy to show as proof as they may request it.

 

2. Know your limits. Make sure your report matches up with reality. Sometimes companies may be slow to update a recent increase to your credit limit or the amount you have paid off. Either omission could impact your score negatively. Also, make sure that your credit card issuers are reporting the correct limits on your accounts to the three major credit bureaus. A credit card company that fails to report your available limit can negatively impact your credit score.

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3. Do not close out a card. As much as simplifying might feel good, a sudden drop to your credit-spending power does not look good to the credit bureaus. Try to keep your longest standing credit cards active, even if that means only swiping them once per month to buy gas.

 

4. Pay your bills on time. Obviously, no one wants or intends to be late on credit payments. Considering your on-time payments (or lack thereof) make up for 35% of your score, we cannot stress enough the importance of paying on time.

 

 

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5. Create some balance. While paying down installment debt (car, school, mortgage, etc.) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards, can cause a quicker spike in your credit score. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt.

 

“How do you want to hold title?”

Once in contract, this will be a question that you will have to answer. In laymen’s terms, they are asking in who will be the owner(s) and what rights will each have with regard to the property, both during their life and after they die (heavy, right?). There are 3 common ways to hold title and each option comes with its own set of pros and cons. Here is some information that hopefully will make it a little easier to understand each of the most common options:

1. Community Property With Right of Survivorship

This choice would be for spouses or domestic partners and would provide equal division of interest and possession. Additionally, title would be in the name of the individual owners. If either person passes away, the decedent’s interest passes to the survivor.

2. Joint Tenancy
This choice could include any number of persons and would provide equal division of interest and possession. Also, title would be in the name of the individual owners. If any person(s) passes away, the decedent’s interest is passed onto the survivor(s).

3. Joint Tenancy in Common
This choice could include any number of parties and the parties involved could choose any number of interests, equal or unequal. Title would be in the name of the individual owners and each interest would be willable and saleable.

* Trust
This choice could include any number of beneficiaries of the trust and beneficial interests under the trust could be equal or unequal. Possession would be according to the trust agreement and title would be in the name of the trustee, “as trustee”.

With rates increasing, is now the right time to buy?

We’ve all seen it. Rates have increased over the last handful of weeks and months. Clients are hearing it on the news, internet and TV and questions are arising. The question we keep hearing is “With rates increasing, is now the right time to buy?”

Most times, we discover that people are asking the question as they believe home prices will drop as interest rates rise. While this makes sense on the surface, let’s take a look at history:

According to calculatedriskblog.com, the last four significant mortgage rate hikes were in the years ’83-84, ’87, ’93-94 and ’99-00. On average, interest rates increased 2%. What do you think home prices did during these same timeframes? They went up!

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During those same timeframes, home prices went up 5.975% on average. Crazy right?

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So why did home prices go up as interest rates were rising? Namely, mortgage rates tend to rise steadily when the economy is strong (much like it is now in early 2018). Similarly, home prices tend to rise when when the economy is performing well, too. This is what we see happening today. Interest rates are on the move but it appears, at least locally, to have little to no impact on the continued increase in home prices.

 

Repairing Bad Credit

Repairing Bad Credit – Most Ignored Big Wins

In today’s day and age, credit is more important than ever. Good credit history can save you thousands when making large purchases and sometimes be the difference between a yes and a no. It isn’t a matter of if you will buy a car or home (or boat, helicopter, jet airplane, etc) but when. If you haven’t made a large purchase before then your credit score may not be in the forefront of your mind but it should be.

We are here to tell you real money savings occur over time by having excellent credit and can create real opportunity for your financial well being. It can be boring to look at the numbers for those who don’t nerd out over finance and mortgages, like us here at O2, but were here to help. By taking the right steps, good credit can be worth over $100,000 to you over time.

If there are two individuals both in their thirties looking to buy a home within the same price range, the difference being one has excellent credit and the other bad credit, the borrower with poor credit will pay over $172,083 more then the borrower with excellent credit (see below).

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So what if you don’t fall in that excellent or even good category and you are getting ready to buy a home…. Do you accept your not good credit and continue to save for a down payment…

We Say NO!

It is better to repair bad credit then to have bad credit and save!

Taking some time over 3, 6 even 12 months to improve your credit can make a big difference in the type of interest rate and programs you can get.

Here are three easy and effective first steps, You can do TODAY that can get you on your way to improving your credit….

Automate all your Credit Card Payments

35% and the largest portion of your credit score reflect your payment history. Automatic payments cut out having to remember or keep track of paying credit cards on time. Any late payments can severely drop your credit score. Cut out the worry and have payments set up automatically. In an ideal world you want to pay off your entire credit card balance each month, but if you can’t you will still improve your score by at least paying the minimums on time.

 

Paying Off Debt

Make a plan that is realistic to chipping away at your debt each month and stick to it. This might take some time. There are two schools of thought when paying off your debt:

  1. Payoff the debt with the highest interest rate first
    1. Mathematically and financially, this makes a lot of sense. As you reduce your balances, the debt you still owe will cost you the least so more of your money can go to paying off your debt
  2. Payoff the debt with the lowest balance first
    1. Psychologically, paying off the lowest balances first will give you quick wins. You’ll payoff something fastest this way and get the satisfaction early on, giving you momentum to keep it up.

Ultimately, as long as you decide on a plan and stick to it, you’ll be in good shape!

 

Keep Old Accounts Open

 History is a very important. The longer your open credit accounts are reporting the better it is for your score.  Look at it this way, two people have never missed their payments and pay their credit cards off every month. However, one has been doing this for 25 years and one for 25 weeks, which is more likely to continue doing so?

Drew’s Tip: I got my first credit card when I was a teenager. I had no credit to speak of and therefore had to put down $500 as collateral and I was given a $500 credit limit. I paid on time and slowly built my credit. I now have credit cards with $20,000-$30,000 limits, however, that first credit card I still have open and for some reason only has a $750 credit limit. If I never use the card, eventually the credit card company might decide my business isn’t worthwhile and cancel. Therefore, I charge my reoccurring $9.99/mo Netflix.com account to the card each month and subsequently auto-pay the card. It never leaves my desk drawer and I never have to think about it.

Remember improving your credit score is a marathon not a sprint. Give yourself some time to plan ahead.