Upcoming Free (& non-promotional) Home Buyer Classes:


Saturday, July 11th , from 9am-12pm
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 

Tuesday night, July 14 , from 5pm-8pm 
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 
 
....we also have home seller classes available too.


 ...if these dates/times don't work for you, we have others.  Check out the website for more class dates, times, and locations.  PLEASE always check  the web  sitewww.learningtobuyahome.com  ;  for any changes regarding the classes!

Remember...with reservation...we will throw in lunch, or dinner!  :-D
~~~~~~~~~
 
Happy Monday morning!  


   Thank you SO MUCH to everyone who came out and joined us at the spring client appreciation event on Saturday.  Inside Out was a very darling movie, but I LOVED the Pixar short before the movie.  Haven't seen it?  Youtube Pixar's Lava you....brought tears to my eyes.  Yes, I am a sappy soul...no shame here!  LOL  I love the client appreciation events...I love seeing everyone, and catching up a bit.  What is really funny is that people come to these and see people they know!  :-D  Ever hear of "Six Degrees of Kevin Bacon"?  Well, around here it is "Six Degrees of Tracie DeMars"!  LOL    Just a heads up....our next Client Appreciation Event will be on Saturday, December 19, for the new Star Wars Movie!!  Yep, that is opening Saturday, and WE HAVE IT!!  I have to admit...Chris Berg (503-320-0925 & cberg@pcmloan.com) & I are stupid excited about it!  So again, thank you for choosing either Chris or me (or both of us) to help you with your next home adventure....whether you are buying, selling, or just refinancing....we are so happy & grateful that you chose us to help you!  :-)  Now, let's get to this weeks real estate education....  

 So, this week I have wrote up a couple of offers, and during the offer process I like to talk with my clients about when they want to close.  Closing is when you get keys...not when you sign.  In Washington, you typically close (=keys) about 24-36 hours after you sign.  This, of course, doesn't include the weekends.  Title and the courthouse is closed on weekends so nothing happens then.   Why does closing dates matter?  Well....because your mortgage payment differs a bit from how you pay rent.  Also, most buyers have leases to consider.  This usually comes up so t  his week I am going to talk about Mortgage vs Rent and how it shakes out because they are paid differently.  What do I mean?  Well....

So let's break down mortgage vs rent.....
 
   When you pay your July rent, you pay to live there for the month of July...from the 1st to the 31st.  When I pay my July mortgage, I am actually paying for the month of June.  Nope...not kidding, I am really am, and you're like, "what?  how?"  :-)  Well, rent is paid ahead of time, but for mortgage, you can't be charged for what you haven't accrued, so when you pay your mortgage, you are actually paying for the month just past.  Mortgage is technically due on the first, but it isn't considered late until the 15th of the month, and which point you will be charged a late fee which is usually about 5% of your monthly payment.  Did you know that if you pay your mortgage at the 1st of the month though you are actually paying the most in interest?  I was told this from someone I know who works at a bank....that 'supposedly' if you pay at the the last day of the month (for example: on July 31st for June) then you are actually paying the most in principal, and the least in interest that you can in your regular payment.  Interesting... 


Why is this important at closing?  
   This is important knowledge when you are writing up an offer because it has to do with how much your closing costs are going to be.  Some examples....
   So, let's stay you are in the process of getting pre-approved, or you are looking at homes right now.  If you were to close on your new home on August 25th, then you will be paying for 6 days of interest as part of your closing costs for the rest of August, and your first payment is due October 1st for the month of September.
   If you were to close on your home August 10th, then you will be paying for 21 days of interest as part of your closing costs for the rest of August, but your first payment is due (still) October 1st for the month of September.  Does that make sense? 
   If you close ANY day in August...whether the 1st or the 31st....your first mortgage payment is due October 1st.  If you close earlier in the month then your closing costs/downpayment may be a bit higher as you are including that months interest as part of that downpayment....but your first payment is further away.  Some people like this as it gives time to put a bit of money aside for savings. 


  If you close later in the month, you have less to pay for interest as part of your closing costs/downpayment, but your mortgage payment will be due sooner.  Some people like this because it is just going from one rent payment, to your first mortgage payment, and it is a smooth transition.


   Whether you choose to close sooner, or later, is up to you, and it is good to talk with your lender about how much that additional interest may cost you in your closing costs/downpayment.  Usually when doing your paperwork, and your pre-approval, your lender will figure your fees based on as if you are closing on the 15th since...number wise...that is a safe bet and won't affect you too much either way if you close at the beginning, or at the end. 


   When writing up an offer this is always something I spend some time on when talking about when you might like to close as it isn't something that people realize....and no one ever explains it.  If you have any questions about this or if you would like me to help you with your home buying adventure, please call or email me and I will be glad to help!!    

     Information is power, and I hope that I am able to help you.  Good luck, and as always...May the odds be ever in your favor out there....  If you are looking for a real estate agent, I would love to be able to help you.  
 
   As always....this is just a quick overview.... please remember that your agent, and your lender work for YOU.  You drive the bus...we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your homebuying adventure.  The goal is to be informative and non-promotional.  :-)  We are, however, hoping you will call and want us to help with your adventure.  


If you have any questions about this, or something you have heard...or if you would like me to help you with your homebuying adventure, please call, email,   text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  ...and thank you for referring these classes to your friends, family, and co-workers. 
 
 .  ..disclaimer...if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings... 
 
 
Next Week:      Websites to find homes, and what status's mean
      
                     
Last Week:  Homebuying Do's & Don'ts             

Have a great day, and I will talk to you soon,  
;-D  
Tracie DeMars  
Real Estate broker   
Re/Max - Van Mall  
360/ 903-3504 cell  
360/ 882-3600 fax  
www.traciedemars.com  
traciedemars@aol.com  
   
“Interested in free and non promotional home buyer classes?  Go to www.traciedemars.com  for local upcoming classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.  Classes are no available for home owners thinking about selling their home.  Links are on the left."

"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."   
   - Shel Silverstein, American poet, cartoonist and composer, (1930 - 1999).

Upcoming free (& non-promotional) Home Buyer Education Classes   

Saturday, June 27, from 9am-12pm
**please note time change because of the client appreciation event** 
         Vancouver YMCA, conference room 
         11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave

Saturday July 11th , from 9am-12pm 
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 

Tuesday night, July 14 , from 5pm-8pm 
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 
 
....we also have home seller classes available too.


 ...if these dates/times don't work for you, we have others.  Check out the website for more class dates, times, and locations.  PLEASE always check  the web  site www.learningtobuyahome.com  ;  for any changes regarding the classes!

Remember...with reservation...we will throw in lunch, or dinner!  :-D
~~~~~~~~~
 
Happy Sunday!  

  I know, I know....but I have to keep reminding you!  :-D  We have our semi-annual Client Appreciation Night coming up.  
:-)  Chris Berg (cberg@pcmloan.com & 503-320-0925) and I would like to invite you, your family & friends to come watch a movie with us!  Saturday, June 27th from 3pm-6pm for the new Pixar movie, Inside Out.  
Just let me or Chris Berg know how many tickets you will need.  :-D

That being said, Happy Father's Day to all the dads (and single moms) out there!  I am very grateful for my husband and father of my children.  He is my partner in every aspect of our life together, and is amazing!  

   So, I originally typed this up a couple of weeks ago, but didn't send it out.  Why?  Because I was having a frustrating week, and I wanted to make sure that it wasn't me being frustrated when I sent this out.  Sometimes we all have those days/times where it seems we are talking to brick walls, and that no one wants to hear what we have to say...because what we say isn't what they want to hear.  I am usually a pretty positive person, and I am old enough to know that things like this...and moods...blow over....and to ALWAYS wait to talk to folks until it does blow over.  :-)  

  All jobs, and careers, have ups and downs, and things that we wish we could tell people, but don't want to...or can't.  Many of us are in customer service related industries, or in careers that relate to the public...or even just people...and we all know that sometimes you just want to bang your head on the wall....repeatedly!  LOL...it's ok, I think we are all there occasionally...  So, I will give you a (hug) right now, and apologize to you, if I am the one that makes you shake your head in your industry!  

  So, what makes a real estate agent do some yoga breathing? 

 Things to do, or not to do when buying a home...

#1... Please get pre-approved before looking for a home.  There is nothing worse than falling in love with a home that you can not afford.

#2... Do NOT look at homes above your price range, or above the price range you want to spend.  We are in a sellers market.  In a buyers market there are more homes for sale than there are buyers....in a sellers market there are more buyers than there are homes.  
   Look at homes in the price range you are approved for, or for what you want to spend because if you fall in love with a home that is more than you want to spend then you will look for ways to justify that expense...we all do it....so don't!  :-)  If you are looking at homes higher than what you can spend, and you fall in love with one of them, and the sellers won't come down to your pre-approved limit...then that home will be the one that got away, and you will always be comparing all other homes to that one...and that makes finding your home tough...so don't!

#3... An agents job is to advise, help, and assist.  We can not tell a buyer and/or seller what to do, how much to price their home for, or what to offer...we can only advise.  The final decision is always the buyer or sellers.  Sometimes buyers want to put together a lowball offer, and then get upset when the sellers counter back at, or close to, the listing price.  Sometimes sellers get frustrated when they don't have any showings, but don't want to lower their purchase price to encourage buyers to come see their home.  For buyers, this is their offer...for the home they want.  For sellers, this is their home.  For both the buyer and seller, this is their dreams....and ultimately for both the buyers & sellers, it is about PRICE...  Agents try to understand this and help our clients accordingly.  For both the buyers and the sellers, one of our jobs is to help educate our clients about the market... and buyers and sellers.  However...no one said you have to listen...  :-)

#4... Please use a local lender!  Every market is different, and a local lender will be able to help you understand what will finance, or not finance in your area.  

#5... Please pay your bills!  It's crazy that we have to remind people about this...

#6... Please don't lie to your lender....  Yes, they will find out...they always do!

#7... Please don't think that buying a home is like what you see on HGTV...it really isn't!

#8... Please keep up with the current market trends.  This is not 5 years ago, 10 years ago, or 3 years ago.  The market is consistently changing and sellers need to keep ahead of it, and buyers need to keep up with it.  Again, your agents job is to advise, help, and assist.  Take advantage of your agents knowledge and experience.  Talk with your family and friends...they love you, care for you, and want to make sure you are going to be ok...but please...remember that they may not be up to date on current laws and trends in real estate, and your agent is.  

#9... Hire a real estate agent that you can trust, and have fun with.  Buying a home, and selling a home, is stressful and a lot like riding a roller coaster...only not always as fun.  A good agent and lender can help alleviate a lot of the stress, but no...not all.  Buying a home is scary...it is the largest purchase you will ever make, and it is ok to be freaked out!  When you hire a real estate agent though...know what you are getting into with him/her.  Ask questions...when are they available?  how do they prefer contact?  how long have they been in business?  how many homes do they sell per year (anything under 15 is a part time agent pretty much).  how often do they work with sellers?  buyers?   Are they going to insist on a buyers agency agreement (see email/blog from a couple of weeks ago)?  Some things you will just find by being with this agent... you don't want a 'yes' wo/man...you want someone who will tell it to you straight...whether you like it or not!  

#10... Hire an inspector!  Preferably one with excellent reviews, and not because of price!  This is the largest purchase you will ever make...don't hire cheaply, hire by referrals, and ability.  

#11... Don't trust the sellers disclosures as 99% of sellers don't know anything about their home.  This is what a good inspector is for.

#12... Don't start packing until after the appraisal.  The appraisal is typically the last big hurdle in a home buying adventure.  Once the appraisal is in, and approved, you should have clear sailing to closing (as long as your lender did their job).

#13... Remember that you are buying your home...not just an investment.  Purchase a home in a neighborhood you want to live in, and that you feel safe in.  You aren't just buying the house...you are buying the neighborhood, and the neighbors too.  If you love the home, but not the neighborhood...don't buy it.  If you love the neighborhood, but not the home...don't buy it.  Buying a home is always a compromise somewhere, so know what your top THREE things you need in a home are, and concentrate on those.  

#14... Tying into #13, plan for the long term, not the short term.  It costs a seller 13% to sell their home.  The average homeowner lives in their home for 5-10 years..I always tell my clients to plan to be in the home for 7 years.  Can you imagine living in that home for 7 years?

#15...Tying in #13, know what you want when buying a home!  What are your top 3 things you want in your home?  Is that in your price range?  If it is, then let's focus on that...let's find the home you want.  If what you want is outside of your price range then you are going to have to reevaluate either what you want in a home, or your price range.  I know that it is fun looking at homes and that, for some people, they want to see everything because it is interesting and fun, but what are you missing because you are worried that you will miss something?  We all want the best home for the best price, but there does need to be reasonable expectations.  So..what do you want in a home?  Let's find it!  

#16... Please don't purchase furniture or appliances before you are given keys to your home!  This could cause you to lose your home loan, and your home.  The furniture or appliances isn't worth your home...  Don't make ANY purchases in the home buying process without talking with your lender!

#17... Don't look for the worst house in a great neighborhood with plans to re-do it and 'flip' it a la HGTV.  85% of homes that went into short sale, or that were foreclosed on were homes that someone had plans to fix up and flip.  If you have two homes to buy...one is pretty much move in ready, and one needs a lot of work...buy the move in ready every home.  Why?  Because you work...and because projects take twice as much time and money as you think.  Because there are material costs, and then there is your time...and do you want to work another 40+ hours a week on your home on stuff that HAS to be done after you work 40+ hours a week at your job.  Now...we all enjoy house projects that make the home 'ours'...things that we can do here and there...and that is different that trying to redo the entire home.  In the long run, that almost move in ready home will cost you less than the cheaper one that needs a bunch of work.    

#18... Tying into #15, we are a coupon society.  We all want the best deal we can get.  Everyone has champagne desires, but a boxed wine budget...and wants the most for the least amount of money.  Agents get that...  Please be reasonable in what you want in a home.  What is your price range?  I can not get you the Taj Mahal for the price of a mobile home...it doesn't work that way as I do not have a magic wand, and I ran out of fairy dust.  Frequently we hear from folks who want acreage, 3-5 bedrooms, 2+ bathrooms, homes in excellent condition...preferably newer, and at least 2000 sq ft.....Oh...and don't want their mortgage payments to be above $1000 a month.  Now, don't get me wrong...there are homes that fit that description, but they are not here!  Maybe Kansas?  
If you are pre-approved for a certain dollar amount then we will look at homes in your price range.  Please remember that this is your FIRST home, but not your last home.  You most likely won't be buying a home exactly like your parents home your first time around...

#19...  Short sales are not short time-wise...and they are a gamble!  If you are thinking about a short sale you will need three things:  Money (cash in the bank because you are going to need it), no worries about rising interest rates, and LOTS of time.  Please see the email blog from a couple of weeks ago for more information about this.

#20... Your interest rate can not be locked in until you have a signed around, and mutually agreed upon, purchase/sale agreement with the person with the legal authority to sell the home.  An interest rate lock is good for 30 days, and most loans are going to take 30+ days to close.  Most lenders will not lock in an interest rate until the appraisal comes back in at the agreed upon purchase sale price, or more.  

#21... Please attend your home inspection, and please confirm that your buyers agent will be there as well.  As your agent is there to assist, help, and advise...they can't do that realistically unless they are with you for the important things.

#22... PLEASE ask questions!  Not sure about something?  Don't understand?  Ask questions!  There is a saying (can't remember by whom) that says that, "if you can't explain something simply then you don't really understand it".  That makes sense to me...

#23... ALWAYS have your own agent!  In the state of Washington dual agency is not illegal, but remember that as a buyer, or as a seller, you are hiring an agent to represent you, and your best interests....not to represent the other side too!  It is only my opinion that dual agency doesn't really represent any party...except maybe the agent themselves....again...that is only my opinion.  Each party to the transaction should always have their own representation...

#24... Never work with more than one agent at a time.  Sometimes people want to 'increase' their chances and think that working with more than one agent at a time will help them...in fact...this will do the opposite.  I am not saying you should sign a paper to work exclusively with one agent, and in fact, I don't agree with those forms because they can hurt the buyer.  I fully believe that good customer service builds excellent customer loyalty, but please remember that an agent does not get paid unless the client gets (or gives) keys....we will work tirelessly to help you find (or sell) your home....we can do wonderful things, but only together.  Don't lie to your agent...we always find out, and I know that, personally, if I find that a client is working with another agent, I will call the other agent, and let them know.  I will also call the client, and wish them the best of luck in their home buying adventure.  As many agents do, I will do everything I can find to help a client buy the 'perfect' home, or sell their home....and I expect my clients do help me and respect our relationship.  If that relationship no longer works for either party, then let's move on amicably...because we all know how to play nice in the sandbox.  :-)

#25...  Last, but not least... ALWAYS get some home buyer education before you embark on your home buying adventure.  Classes are always free, and always non-promotional!   We try to be helpful with this weekly email/blog, but really, the classes cover the entire loan process, all the loans, good faith estimates, and the entire real estate process...including going over all the pages of the offer.  We want to make sure you are well informed when you step out there into the home buying world.  

....When I am working with a buyer, I have a couple of rules... One, I insist that my buyers are at their home inspection.  This is your home and you need to know what you are buying.  Two, I won't sell a home that I won't personally live in.  I want to make sure that all my clients are in good homes, and in safe neighborhoods.  As always, these emails/blogs are to help you in the complicated and scary world of real estate, and by no means are meant to be promotional....however, I do hope that if you are thinking about buying a home that you will call me as I would love to help you with your home buying adventure.  :-)  


   One last thing you need to remember is that a real estate agent is not a sales person.  It is not our job to 'sell' you anything.  We are assistants,    advisers   , guidance, and help.  You should not feel as if your agent is trying to sell you a home, or anything else, our job should be to help you in getting the home you want.  This being said remember that you do not get T-Bone steaks for the price of hamburger...Look ONLY at homes within your budget.  ALWAYS ask questions, and expect answers without a lot of lingo.  I was always told that if you can't explain something in a way that the other person can understand clearly, it is because you don't understand it yourself.  :-)
  


     Information is power, and I hope that I am able to help you.  Good luck, and as always...May the odds be ever in your favor out there....  If you are looking for a real estate agent, I would love to be able to help you.  
 
   As always....this is just a quick overview.... please remember that your agent, and your lender work for YOU.  You drive the bus...we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your homebuying adventure.  The goal is to be informative and non-promotional.  :-)  We are, however, hoping you will call and want us to help with your adventure.  


If you have any questions about this, or something you have heard...or if you would like me to help you with your homebuying adventure, please call, email,   text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  ...and thank you for referring these classes to your friends, family, and co-workers. 
 
 .  ..disclaimer...if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings... 
 
 
Next Week:    Mortgage vs Rent...How does that work?

      
                     
Last Week:  Credit 101, Part 2, (15 things that hurt your credit)                   

Have a great day, and I will talk to you soon,  
;-D  
Tracie DeMars  
Real Estate broker   
Re/Max - Van Mall  
360/ 903-3504 cell  
360/ 882-3600 fax  
www.traciedemars.com  
traciedemars@aol.com  
   
“Interested in free and non promotional home buyer classes?  Go to www.freehomebuyerclasses.com for local upcoming classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.” 

"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."   
   - Shel Silverstein, American poet, cartoonist and composer, (1930 - 1999).

Upcoming free (& non-promotional) Home Buyer Education Classes   

Monday night, June 15, from 5pm-8pm 
         Marshall Community Center, conference room 
         1009 E  McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 

Saturday, June 27, from 11am-2pm 
         Vancouver YMCA, conference room 
         11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave
 
....we also have home seller classes available too.

 ...if these dates/times don't work for you, we have others.  Check out the website for more class dates, times, and locations.  PLEASE always check  the web  site www.learningtobuyahome.com  ;  for any changes regarding the classes!


Remember...with reservation...we will throw in lunch, or dinner!  :-D
~~~~~~~~~
 
Happy late Saturday, or early Sunday morning!  

  I know, I know....but I have to keep reminding you!  :-D  We have our semi-annual Client Appreciation Night coming up.  
:-)  Chris Berg (cberg@pcmloan.com & 503-320-0925) and I would like to invite you, your family & friends to come watch a movie with us!  Saturday, June 27th from 3pm-6pm for the new Pixar movie, Inside Out.  
Just let me or Chris Berg know how many tickets you will need.  :-D

I hope you are being able to keep cool this past weekend, and today.  Personally, I am not a heat fan....anything above 80 means my AC must go on.  Does that make me a heat wimp?  Yep....and I am ok with that!!  :-D  This week I am going to talk a bit more about Credit for you....as always, call or email either Chris or I with any questions.  

      So, let's talk more about Credit this Week...



15 Things That Hurt Your Credit Score
Your credit score is the three digit number that is looked at by any lender, your insurance agent, and even potential employers...among others. These are 15 things that can hurt your credit score.
 Paying Late

Since 35% of your credit score is your payment history, paying late (or not paying at all) can really hurt you.  Why is this such a big number?  Remember that your credit score is how creditors see how likely you are to pay your bills, and pay them back.  With banks and creditors, the big word is RISK.  When you pay your bills late, you look like a much bigger risk...not stable or reliable.  Consistently being late on your credit card payments, and other bills will hurt your credit score.  You need to pay your bills on time to preserve your credit score. 

Not Paying At All
This ties in to the last one. If paying your bills late is bad, then completely ignoring your credit cards, and other bills is much worse. Each month you miss a credit card payment, you're one month closer to having the account charged off. A charged off account is one that the creditor has given up receiving payment on.
Having An Account Charged OffSee how this works? It really just builds on itself. When creditors think you're not going to pay your credit card bills at all, they charge off your account. This account status is one of the worst things for your credit score. 
Having An Account Sent To Collections
 
Creditors often use third-party debt collectors to try to collect payment from you. Creditors might send your account to collections before or after charging it off. A collection status shows that the creditor gave up trying to get payment from you and hired someone else to do it. The reflects on your credit worthiness, and for the bank this is risk. Remember that risk is bad....
Defaulting On A Loan
Loan defaults are similar to credit card charge-offs. A default shows that you have not fulfilled your end of the loan contract.
Filing BankruptcyBankruptcy will devastate your credit score for a couple of years. Depending upon the type of bankruptcy you claim, it is either an agreed amount to be paid back over a contracted amount of time (chapter 13), or a complete write-off to a blank slate (chapter 7). Either way it takes time to build your credit back up. You can start with a high interest loan, or with installment credit cards where you pay up front. It is high interest because you are a high risk. Now...some folks will tell you that it is a good idea to seek alternatives before filing bankruptcy...like consumer credit counseling. Be careful with consumer credit counseling...some are reputable, and ok, but others? Yeah...not so much! Some are nothing but scams. Yes, bankruptcy does take time to get over, but for some folks bankruptcy can be a good thing. We are often not taught about credit so we make terrible mistakes with ours...or we have terrible luck...or medical issues and bankruptcy can be our only way out. In early 1997, my husband and I declared a chapter 7 bankruptcy. About a year later we got a car loan to build up our credit again....at 20% interest. Yeah, not kidding. Well, we paid that off, and got a couple of credit installment cards. In 2001, we bought our home. After bankruptcy you can get a home loan in 2 years from discharge with a showing of credit worthiness. So is bankruptcy the worse thing you can do to your credit? Yes, but sometimes it is what you have to do, and it isn't the end of the world. Talk to a lender like Chris Berg at Pinnacle Home Mortgage (  chris.berg@pmblending.com) before you make any decisions as a good lender can help you decide what is the best course of action for you. An excellent lender will sit down with you and make a plan as to what to do with your credit, and give you step by step instructions.  Chris and I have a philosophy that an ugly truth is better than a pretty lie, and that we are here for the long haul to help.  We know that some folks are ready now to by a home, and that some folks just need some help.  That is ok...we have ALL been there at one time or another....  :-) 
Having Your Home Foreclosed On
 
Getting behind on your mortgage payments will lead your lender to foreclose on your home. In turn, the late payments will hurt your credit score and make it harder to get approved for future mortgage loans. It is about 3 years after foreclosure before you can get another home loan.

Getting A Judgement

A judgment shows you not only avoided your bills, the court had to get involved to make you pay the debt. While they both hurt your credit score, a paid judgment is better than an unpaid one.
 
High Credit Card Balances
 
The second most important part of your credit score is your level of debt which is measured by how you use your credit.  Having high credit card balances decreases your credit score because a creditor thinks you are not using credit wisely.  Some questions that it brings up in a creditors mind is, "Are you suffering economically and having to rely on those cards to live?"  "Do you not have enough income coming in to pay your bills?"  Having high credit balances (money owed) in relation to your credit limits is a sign of risk in a creditors mind.
 
Maxed Out Credit Cards
 
Maxed out and over-the-limit credit card balances make your credit utilization 100%. This is least ideal for your credit score. It shows that, in case of emergency, you have no back up plan. A person with no credit cards will have a lower credit score than someone with 3 credit cards that have a balance of less than 30% of the credit card balance. A person with 2 credit cards of $3000 limits each has $6000 of emergency funds...just in case, but a person who has zero cards has no emergency funds.
Closing Credit Cards That Have Balances
 
When you close a credit card that still has a balance owed, your credit limit drops to $0 while your balance remains. This makes it look like you've maxed out your credit card, causing your score to drop, and now that credit card no longer shows active as well. Don't close your credit cards as it is a hit on your credit score.
Closing Old Credit Cards
 
Yep...we just keep building on to the last one. Another component of your credit score, 15%, is the length of your credit history - longer credit histories are better. Closing old credit cards, especially your oldest card, makes your credit history seem shorter than it really is.
Closing Cards With Available Credit
 
If you have several credit cards some with balances and some without, closing those credit cards without a balance owed due decreases how much you have of emergency funds.This doesn't make sense that this would hurt your credit, does it? But again...risk...
Applying for Several Credit Cards Or LoansCredit inquiries account for 10% of your credit score. Making several credit or loan applications within a short period of time will cause your credit score to drop. Keep applications to a minimum. Most of know that every time you make a credit application it 'hits' your credit score. Why? To a creditor the more applications for credit you put out the riskier you look as they wonder why you need more credit. Yes...even those "would you like to apply for a XX store credit card to take 25% off your purchase today?" that we hear every day at the store can hurt your credit...every time you do it.
Having Only Credit Cards Or Only Loans
 
Mix of credit is 10% of your credit. When you have only one type of credit account, either loans or credit cards, your credit score could be affected. This factor mostly comes into play when you don't have much other credit information in your credit history.


   One last thing you need to remember is that a real estate agent is not a sales person.  It is not our job to 'sell' you anything.  We are assistants,    advisers   , guidance, and help.  You should not feel as if your agent is trying to sell you a home, or anything else, our job should be to help you in getting the home you want.  This being said remember that you do not get T-Bone steaks for the price of hamburger...Look ONLY at homes within your budget.  ALWAYS ask questions, and expect answers without a lot of lingo.  I was always told that if you can't explain something in a way that the other person can understand clearly, it is because you don't understand it yourself.  :-)
  


     Information is power, and I hope that I am able to help you.  Good luck, and as always...May the odds be ever in your favor out there....  If you are looking for a real estate agent, I would love to be able to help you.  
 
   As always....this is just a quick overview.... please remember that your agent, and your lender work for YOU.  You drive the bus...we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your homebuying adventure.  The goal is to be informative and non-promotional.  :-)  We are, however, hoping you will call and want us to help with your adventure.  


If you have any questions about this, or something you have heard...or if you would like me to help you with your homebuying adventure, please call, email,   text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  ...and thank you for referring these classes to your friends, family, and co-workers. 
 
 .  ..disclaimer...if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings... 
 
 
Next Week:    Mortgage vs Rent...How does that work?

      
                     
Last Week:  Credit 101, Part 1...How is it calculated?
                     

Have a great day, and I will talk to you soon,  
;-D  
Tracie DeMars  
Real Estate broker   
Re/Max - Van Mall  
360/ 903-3504 cell  
360/ 882-3600 fax  
www.traciedemars.com  
traciedemars@aol.com  
   
“Interested in free and non promotional home buyer classes?  Go to www.freehomebuyerclasses.com for local upcoming classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.” 

"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."   
   - Shel Silverstein, American poet, cartoonist and composer, (1930 - 1999).