Jenny Mendez Isenburg's Blog
Preparing to buy a home is a long and stressful process for many. You’ve spent months, or even years, saving for a down payment, planning your future, and building your credit to ensure you get the best possible interest rate on your loan.
Then you find out, when getting preapproved for a mortgage, that your credit score dropped by a few points. So, what gives?
There’s a lot to understand about how credit scores affect mortgages and vice versa. In today’s post, I’m going to attempt to cover everything you need to know about how applying for a mortgage can affect your credit score so you’ll be prepared when it comes time to buy a home.
Prequalification, preapproval, and credit checks
There are a lot of misconceptions about what it means to be preapproved or prequalified for a loan. Some of it is due to the jargon that is used in real estate transactions, and some of it is just a marketing technique on the part of lenders.
So, what does it mean to be prequalified and preapproved?
The short version is that getting prequalified is a quick and easy process to determine whether you’re eligible to lend to and how much you’re likely to receive. It involves a quick review of your finances, and often includes either a self-reported or soft credit inquiry.
A “soft inquiry” is the type of credit check that employers typically use for a background check. It doesn’t affect your credit score, as you are not applying to open a new line of credit. In fact, many lenders’ process for prequalification is a simple online form that doesn’t even require a credit check. We’ll talk more about the difference between soft inquiries and hard inquiries later.
The simplicity of prequalification makes it a simple and easy way to get started. But, it isn’t always accurate in how well it predicts the type of mortgage and loan amount you can receive. That’s where preapproval comes in.
When you get preapproved for a loan you fill out an official application (you often have to pay for these). This will request documentation for your finances and assets, and will ask your approval to run a detailed credit report.
These credit reports are considered “hard inquiries” and are a vital step in getting approved or preapproved for a mortgage. However, they also, at least temporarily, lower your credit score.
Why hard inquiries lower your credit score
When any creditor, be it a bank or credit card company, is determining whether to lend to you, they want to know that you are a safe investment. To determine this, they want to know how frequently you pay your bills on time, how much you owe to other creditors, and how financially stable you are right now.
When you make multiple inquiries in a short period of time, it’s a red flag to lenders that you might be in trouble financially. Thus, hard inquiries will lower your credit score for 1 to 2 months.
Applying to multiple lenders: the silver lining
When borrowers apply for a mortgage, they often shop around and apply to multiple lenders. While it may seem that all of these hard inquiries will add up and drastically lower their credit score, this isn’t the case.
Credit bureaus take into account the source of the inquiries. If they realize that you are applying for mortgages, they will typically recognize this as rate shopping and group these applications together on your credit report, counting them only as a single inquiry. This means your score shouldn’t drop multiple times for multiple mortgage preapprovals that were made within a small time frame.
Now that you know more about how mortgage applications affect your credit score, you can confidently shop around for the best mortgage for you and your family.
Depending on where you live, recycling may not be an easy task. Some communities don't even have a local center. And beyond that, reusing something has less of an environmental impact than recycling. So when you can reuse, you absolutely should. But it's not always easy to see treasure when "trash" stands before you.
Here are some simple and creative ways to re-purpose your recyclables for storage.
Coffee Creamer Bottle Salad Sprinkles
Are you trying to add more healthy nuts and seeds to your salads? Make it easy for yourself by re-purposing a creamer bottle. Simply remove the label and wash. Then add things like:
Orange Juice Bottle Watering Can
After cleaning the bottle, simply use a small drill bit or hammer/nail to bore some tiny holes into the lid. Fill it with water. Screw on the lid tight. And then, turn the bottle at an angle to allow the sprinkles to cascade over your plants.
Single-Use Plastic Bottle Wastebasket
You'll need a couple of metal rings for support here. So look for old furniture or machinery that has them. Then string four bottles together with a wire running through top to bottom. Glue the bottle columns to each other to create a cylinder. Use a recycled piece of wood, metal or hard plastic for the round base, and Voila!
Old Desk Recycling Station
Do you have a table, desk, armoire or dresser that's on its way out? Turn that old wood into several crates. Use them for anything. But they're perfect for recycling.
Carefully disassemble the furniture. Then cut the wood into slats. Nail those slats together to form a crate. Paint each container with a different vibrant color. Then stencil on a label such as:
Now, when someone visits your home, they immediately sort recyclables into the right bin.
Hopefully, these ideas will help you see other recyclables in a new light to create your own up-cycled storage solutions.
Selling your home can be scary, particularly for those who are listing a residence for the first time. Fortunately, we're here to help you face your home selling fears so you can overcome them before you add your property to the real estate market.
Now, let's take a look at three common home selling fears, along with some of the ways that you can put these concerns to rest.
1. I won't be able to get the best price for my home.
Getting the best price for a house is the number one concern for most home sellers, and for good reason. Lucky for you, there are several quick, easy ways to ensure you can maximize the value of your residence.
First, check out the housing market and see how your house stacks up against similar residences that are available. This will enable you to collect valuable housing market data that can help you price your house accordingly.
Don't forget to complete a home appraisal too. A property appraiser will allocate the necessary time and resources to analyze your house's interior and exterior. Then, he or she will provide a report that outlines your home's strengths and weaknesses so you can better understand the true value of your residence.
2. My home will stay on the real estate market for years to come.
Let's face it – a home seller likely wants his or her residence to sell as soon as it hits the real estate market. Sometimes, a house can linger on the real estate market for an extended period of time. And when this happens, it is easy to question whether a homebuyer will ever submit an offer on a residence.
As a home seller, it is important to ensure your house makes a positive first impression on homebuyers.
Spend some time mowing the front lawn, clearing dirt and debris from walkways and performing assorted home exterior improvements. This will enable you to boost your house's curb appeal instantly.
Also, declutter your home's interior as much as possible. By doing so, you can make it simple for homebuyers to envision what life would be like if they decide to purchase your residence.
3. When the time comes, I won't be able to relocate to a new home.
After you sell your residence, you'll need to move to a new address. The relocation process often can be difficult, especially if you have lived in a particular house for many years.
A real estate agent can help you prepare for the relocation process. This housing market professional understands all aspects of the home selling cycle, and as such, will be happy to offer expert assistance at all times.
Although selling a home may seem challenging, an informed home seller will understand what it takes to get the best results possible. And if you address your home selling fears now, you should have no trouble optimizing the value of your house and accelerating the home selling process.
If you’re planning on buying a new home sometime in the near future, you may be wondering when the best time of year to buy a home really is. There’s many theories about when the best time of year to buy a home is. It’s widely known that inventory on homes available for sale picks up in spring. That means that inventory increases, but so too does the volume of competition for people who are buying homes. Just because spring is busy, in real estate that doesn’t mean that it’s necessarily the best time to buy.
Spring is, however, a great time to sell your home. The same goes for the summer as the buying frenzy continues right into the fall for most home buyers. As a buyer or a seller, you’ll want to have a good understanding of the housing market no matter what time of year you’re making your property transactions. Whether you’re buying or selling, you’ll want to know how to get the best bang for your buck. While many people are ready for a change after the long winter months, yet, many people can hold out through other times of the year.
The Market Changes With The Seasons
As the seasons change, so too do the number of people selling versus the number of people who are looking to buy. If you don’t mind the competition and know what you’re looking for, any time is a good time to buy. As a buyer, you’ll either be facing low inventory, tough competition, or a combination of the two. If you’re scoping out the type of home you’d like to live in, you’ll want to browse in the spring. Have your pre-approval ready just in case you find a home you love at the right price. If you’re not in a rush, spring shopping can give you a good idea of what’s out there for you. You’ll be able to narrow down the type of home you want and where you’d like to live when the time is right.
There’s Really No Golden Rule For Timing
When it comes to buying and selling real estate, there is no sweet spot during the year as to when you’ll have better luck. Being prepared and understanding the trends in your area are a good start. When you hire the right real estate agent, they can be your advocate throughout the process of either buying or selling. Agents can research different trends from the time of year that properties are sold in a certain neighborhood right through to the correct pricing for a home just like yours or the one you are looking for.
Flooring is a significant part of your home interior decor. It bears the brunt of your daily activities and is always the first surface to reflect wear and tear. With that in mind, consider installing high-end flooring that is durable, lasts longer, and of course, makes your home more appealing. Luxurious flooring can boost your home value tremendously when it is time to sell. Here are top luxury flooring options that are the perfect combination of affordable luxury:
Hardwood flooring has features that bring a natural flair of luxury into your home. Categories of top, quality, hardwood flooring are exotic hardwoods and reclaimed woods. Upgrading from carpeting to hardwoods adds value, decreases allergens and takes your home up a notch.
Reclaimed hardwoods: Reclaimed hardwood is recycled wood from old barns, industrial buildings, and other teardowns. They come in a plethora of species including: walnut, oak, pine, hickory and elm.
Exotic hardwoods: Exotic hardwoods are a great value because of the scarcity of the wood types in demand. Exotic wood comes from continents like South America and Africa, and the species of wood used include: Brazilian Tigerwood, Bloodwood and Cumaru.
Natural Stone Flooring
Natural stone flooring is an option that oozes beauty and adds class to your home. However, stone flooring is one of the most costly options on the market today due to the processes involved with quarrying and transporting the stones. Before you install natural stone flooring, it is important to remember that the harder and denser the stone, the more costly the floor will be per square foot. Also remember that the features of the stone tile influence a homeowner's buying decision. Such features include the color, rarity and, most importantly, the kind of stone used. With a dizzying world of options to choose from, you may want to start with some samples of natural stone flooring such as cobbled stone, Jerusalem stone marble and granite.
Luxury Vinyl Tile
Luxury Vinyl Tile (LVT) is one of the most popular options for many homeowners who want to have a taste of luxury but remain within the realm of affordability. LVT is durable and injects a feeling of affluence with its natural wood or stone look. It is resistant to dents, chips, moisture damage and heat. Luxury Vinyl Tile flooring is perfect for those who want high-end flooring at a guilt-free price.
Mosaic/Designer Ceramic Floor Tiles
Bring a touch of style and luxury into your home with mosaic floor tiles. This type of flooring comes in a wide range of options to choose from such as Italian tiles, antique reclaimed tiles, pebble mosaics, custom mosaics, glass tiles and handmade tiles.
Visit your professional flooring store and consult with a designer on some of the best flooring options to consider for your home and office space. If you plan to sell, check with your real estate agent to see what's going for top dollar in your current market.