How To Improve Your Credit Score For Better Financing Terms

Imagine that you've found the perfect home and are ready to apply for financing. Your home loan approval amount comes back lower than you would have expected and at an interest rate significantly above what you have heard is available on the market.

This could be because you have an average to poor credit score.

Mortgage lenders base interest rates on many things, but your credit score plays a large part. Anything between 720 and 850 will typically qualify for better interest rates. A mediocre score is usually between 660 and 719, and a low score is 659 and under.

If you have a lower score than you'd like, below are a few traits for you to follow of people who possess higher credit scores and secure the best home financing.

They don't max out their cards.

It's better to keep a low revolving balance on a few cards than to spend every dime allotted on one. The ratio of credit card balance to your credit limit is called credit utilization. The higher your credit utilization, the larger affect it can have one your credit score.

They make payments on time.

This is very likely the most important tip for your credit health. If you miss a payment on a term loan, credit card account or monthly home bill, then you could be turned over to collections, which will affect your score negatively.  You will almost surely be reported as late to the credit bureaus, which will in turn drop your credit score precipitously. Absolutely make all of your payments before their due date.

They stay with one card.

Don't close and open credit card accounts frequently. Each time you make a change to your line of credit, it affects your score. Even if you don't want to be tempted to use a credit card, keep the account open and leave the card at home. According to the Fair Isaac Corporation (FICO), high credit achievers have accounts that are usually at least 11 years old.

Excellent credit could qualify you for a better interest rate, which might save you thousands of dollars over the life of the loan. So stay on top of your monthly credit bills and keep a low balance on just a few cards to watch your score steadily increase.

If you're ready to learn more about your ability to purchase a Plymouth home, call your trusted home financing professional today.

5 Important Tips To Help Smooth Your Move When You Have Teens In The Home

You've got a new job offer across the country and you are planning to pack your things, buy a home and make the big move.

However, when you tell your 17 year old daughter your plans, she lets out a mournful wail and cries that it is not fair. How can you possibly take her away from all of her friends, her favorite hangout spots and the cute boy she just started seeing?

Moving is a difficult transition and it is often even more traumatic for teenagers. The teenage years are an important stage where young adults establish their individuality and independence and during this time their social circle is extremely important to them.

Being removed from that against their will can make any teen feel sad, confused, angry and resentful. Also, fitting into a new social scene in a different location can be a challenge for a teen that might be singled out as the "new kid".

How can you help your teen during this transition so that the experience will be easier on them?

5 Tips To Help Your Teen Move More Smoothly

Here are some tips that will make the experience of moving a little bit easier on your teenager:

• Give them as much notice as possible so that they have time to adjust to the idea of moving. They will feel like they have enough time to say goodbye to their friends and close a chapter of their lives.

• Try to schedule the move around the school calendar, as moving in the summer is much less disruptive to your teen's life than relocating in the middle of the school year.

• Make sure that they have ample time to spend with their close friends before they leave and once you arrive, understand that they might go through a grieving process of missing their old pals.

• When you get to your new home, make sure that your teen has plenty of ways to keep in touch with their old friends, such as an internet connection and a cell phone plan.

• Encourage your teen to get involved in the community of your new hometown, like joining sports clubs or attending events. This can help them to make new friends.

Moving to a new city is always exciting but offers challenges like this one for families. For more advice on moving to a new Plymouth home, contact your trusted mortgage professional today.

Home Prices Record Highest Monthly Gains Since Case Shiller Index Inception

The S&P Case-Shiller Home Price Indices for April indicate that the housing recovery gained ground.

In April 2013 average home prices tracked in the Case-Shiller 10 and 20-city Composites increased by 11.60 and 12.10 percent year-over-year. On a month-to-month basis, the Composites increased by 2.60 and 2.50 percent respectively.

According to David M. Blitzer, Chairman of the S&P Dow Jones Indices' Index Committee, the 10-and 20- City Composites experienced their largest month- to- month gains since their inception: "Thirteen cities posted month- to-month gains of two percent or more, with San Francisco leading with a month-to-month gain of 4.90 percent."

The 10-and-20 City Indices reported the highest year-over-year gains in home prices since 2006.  Cities where home prices gained more than 20 percent year-over-year included Atlanta, Las Vegas, Phoenix and San Francisco. Phoenix posted its 12th consecutive month of double-digit increases in home prices while San Francisco home prices increased year-over-year by an average of 23.90 percent. Home prices increased year-over-year in 19 the 20 cities included in the 10-and 20 City Composites, with home prices in Detroit remaining flat.

Mortgage Loan Requirements Showing Signs Of Loosening

Mr. Blitzer also noted that according to the most recent Fed Senior Loan Officer Opinion Survey, some lenders are beginning to relax credit requirements for mortgage loans. This good news, along with the availability of adjustable-rate mortgage loans is expected to help with maintaining affordability and providing access to homes for more buyers.

According to the S&P Case-Shiller 10-and-20 City Composites, home prices fell approximately 26 to 27percent from their highest in June 2006 to their lowest in March 2012. As of April 2013, average home prices had recovered by 13.10 percent for the 10-City Composite and 13.60 percent for the 20-City Composite.

More Reports Show Ongoing Housing Recovery

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, reported that home prices increased an average of 7.40 percent year-over-year as of April 2013, and rose by 0.70 percent between March and April 2013. While this data fell short of an expected month-to-month increase of 1.10 percent, Average FHFA home prices were 11.70 percent below their peak in April 2007.

FHFA bases its report on sales of homes financed with mortgages owned or securitized by Fannie Mae and Freddie Mac.

The U.S. Commerce Department reported that sales of new homes reached a five-year high in May, the highest level since July 2008. May sales increased 2.10 percent between April and May 2013 to a seasonally-adjusted annual rate of 476,000 homes. This represents a year-over-year increase of 29 percent from May 2012.

While rising mortgage rates and home prices may slow demand for homes, economists don't believe that either factor will halt the housing recovery. A good next step is asking your trusted mortgage professional about current home values and loan options in and around Minneapolis.

3 Clever But Simple Ways To Get Your Home Mortgage Paid Faster

Paying off the mortgage on your home faster means that you will not only have the satisfaction of owning your own home sooner, you will also have the benefit of paying much less in interest over the years.

The faster you pay off your mortgage, the more money you can save, so here are some tips to accelerate your payment schedule.

Pay Your Mortgage Every Other Week (Bi-Weekly)

Did you know that if you take your monthly mortgage payment and divide it in half and then pay it every two weeks that you will end up making a full extra month of payments every year? This is called a bi-weekly payment program which has been around for a long time, and it's still a good idea today!

You likely won't notice the difference since the extra half payments occur in long months with bigger paychecks, but over the years this will end up saving you thousands of dollars in interest payments.

Make a Bigger Monthly Payment

Similar to the bi-weekly payment plan above, you can accomplish the goal by dividing your principal and interest portion of your payment by 12 and then adding that amount to your regular monthly payment.  You will be paying that extra payment every year, but spacing it out over each monthly payment.  

Most homeowners using this tactic can shorten their term by up to seven years.

Put Any Windfall Toward the Mortgage

Was your tax rebate larger than you expected? Have you received an inheritance from your great aunt Thelma? Have you won a cash prize in a contest?

Put any unexpected chunks of cash straight toward your mortgage instead of spending them. This won't affect your budget at all, because you were never expecting or counting on that money in the first place. But once again, it can make a huge difference in the overall amount of interest that you pay on your mortgage loan.

However, keep in mind your particular situation. Spending every last penny paying off your mortgage as quickly as possible might not be the best option for you if you have no emergency savings fund or if you have a credit card languishing with high interest debt.

It is usually more important to deal with these pressing financial issues before attempting to save money on your mortgage.

One great way to start your research on how to pay your Minneapolis home off faster is to talk with your trusted mortgage professional.  They can answer your questions and point you in the best direction for your situation.

What's Ahead For Mortgage Rates This Week - June 24, 2013

Comments by Fed chairman Ben Bernanke after Wednesday's FOMC meeting caused havoc in financial markets as investors anticipated the potential effects of any rollback of the Fed's policy of quantitative easing (QE). Chairman Bernanke said that the Fed may begin reducing its $85 billion monthly purchase of Treasury securities and MBS toward the end of this year.

The chairman made it clear that any decision concerning QE would be based on careful review of current and developing economic conditions. QE is intended to keep long-term interest rates low; any reduction of the QE securities purchases could cause mortgage rates to rise.

Economic News Bodes Well For Housing

The week's other economic news included more good news for housing. The NAHB/WF Housing Market Index for June came in ahead of expectations at 52, which surpassed the expected reading of 45 and May's reading of 44. Any reading over 50 indicates that more builders surveyed believe that housing market conditions are positive.

Tuesday was busy for economic news. The Consumer Price Index for May rose from April's reading of –0.40 percent to +0.10 percent in May, which was below expectations of +0.20 percent.

The Department of Commerce released its Housing Starts Report for May; the reading for May missed expectations of 953,000 housing starts and came in at 914,000 which exceeded April's 856,000 housing starts. Increasing the number of available homes could help steady recently increasing home prices, but existing homes remain in short supply in many areas.

Fed Expects Moderate Improvement Continuing For Economy

Wednesday's news involved the Fed's FOMC meeting and press conference. The Fed stated after the meeting that it expects moderate improvement in economic condition and noted that housing, which was a primary cause of the economic downturn, is now leading the economy's recovery.

Freddie Mac reported that the average rate for a 30-year fixed rate mortgage fell from 3.98 percent with 0.7 percent discount points to 3.93 percent with borrowers paying 0.8 percent in discount points.  The average rate for a 15-year fixed rate mortgage fell from 3.10 percent to 3.04 percent with 0.7 percent in discount points for both weeks. Investor response to the Fed's mention of possibly reducing its QE program is likely to send mortgage rates up next week.

The National Association of REALTORS® released its Existing Home Sales report for May. Existing home sales came in at 5.18 million and beat projections of 5.00 million and April's sales of 4.97 million existing homes.

Increasing sales of existing homes is good news as demand has exceeded supplies of existing homes in recent months. High demand drives up home prices and impacts affordability along with rising mortgage rates.

What's Ahead For This Week

Next week's scheduled news includes a number of housing related reports, FHFA Home Prices, the Case-Shiller Home Prices Report and New Home Sales are set for release Tuesday.

The Gross Domestic Product Report comes out on Wednesday. On Thursday, data for weekly jobless claims, consumer spending and pending home sales will be released.

Friday brings the Chicago Purchasing Managers Index and the Consumer Sentiment Index.

The data released in these reports will continue to inform the Fed's decision-making with regard to bond purchasing and interest rate policy. It's possible though, following the aggressive market sell-off activity from last week, that we may see a softening in long-term rates over the course of this week.