Eric Mitchell Real Estate

How the Coronavirus is Affecting Mortgage Lenders' Requirements The COVID-19 pandemic has led to business shutdowns, furloughs and layoffs across the United States. Many homeowners are unable to afford their mortgages and have requested forbearance to reduce or delay their payments. The new reality has made lenders cautious when deciding whether to grant new mortgages to homebuyers. Lenders are also being careful when it comes to applications from homeowners who want to refinance their existing loans. More Stringent Requirements for Homebuyers Due to COVID-19 The economic uncertainty has mortgage lenders worried that if they grant new home loans, borrowers who are struggling financially due to the coronavirus might make payments late or miss them altogether. Lenders are therefore taking steps to reduce their risk. Many have raised their minimum credit score requirements, some dramatically, to make sure they give loans to people who will be likely to repay them. Lenders ...

Save for a Home with a Dollar-for-Dollar Match Program A federal program helps low-income families buy a home with a unique method meant to encourage saving: It matches dollar-for-dollar what they save to buy their first home. The Individual Development Account, or IDA, doesn’t offer a lot of money to help with a down payment — up to $2,000 in federal matching funds with more contributions possible from local IDA programs — but it’s a start. Participants can start by saving as little as $25 — matched to as much as eight to one, depending on the program, though most offer one-to-one matches. Income levels must be 200 percent below their state’s poverty level. With an 8:1 match, IDA participants can raise much more than the $4,000 total with federal matching, and could have $10,000 or so for a down payment on a house. Most IDAs are funded by the federal government and are run by nonprofit groups and financial institutions, and grantee programs are required to raise an equ...

Making Financial Lessons a Family Tradition Teaching children manners and how to tie their shoes is one thing, but financial lessons are often pushed to the wayside until it’s too late. Budgeting and financial planning should be a focus in every household. Whether you are passing along your lessons to your children, nieces or nephews, keeping financial sense in the family can have longstanding benefits. Here are some financial lessons you can teach children before they leave home: How to Budget Whether it’s through a household budget that you let them become a part of, or a weekly allowance on which they have to determine how to spend and save, budgeting is a skill they will be able to use throughout their lives. Show the younger generations how to budget for monthly expenses, such as a mortgage, groceries, utility bills and other expenses, and then show them what your monthly income is. If the expenses are higher than the income, then work together to cut expenses and l...

When A House Doesn't Sell So what happened? The house has been sitting on the market for 180 days, had a few showings, feedback wasn't bad, you even lowered the price by $20,000...what happened? It's a frustrating situation for sellers and their agents. It happens all the time.  "Oh, it's just the market. A buyer will come along eventually". Is it just the market? What about those homes that sold in a week just around the corner? The market was fine for that home. "It's over-priced. We need to cut the price by $10,000 to get to the next buying level". Could be. But if you've done the research and found the right comparable home sales and you know the price is right...what then? Marketing is the key ingredient to selling a house when it's priced right. A good marketing strategy can even overcome a house being a little over-priced by attracting a larger buying pool. Many agents look at marketing as putting a home in MLS, puttin...

Understanding Car Title Loans, and Why You Should Avoid Them If you’ve seen advertisements by lenders saying “No credit, no problem,” then you may have heard of car title loans. And chances are, you could end up with a problem. Like their maligned brethren payday loans, car title loans prey on the poor and underbanked, offering loans of $1,000 or less with an annual percentage rate of 200 percent or more on the loan. A car title loan does just what the name implies — it uses your car as collateral if the loan isn’t paid, which means that a missing payment could lead to repossession. Worse yet, the loan can be rolled over monthly indefinitely as the borrower pays only interest each month. If you own your car outright, you can sign over the title to the lender and then get it back once your loan is repaid. Typically, up to 25 percent of the car’s value can be borrowed in a title loan. According to the Pew Charitable Trusts, the typical car title loan is $1,000. Payment is...

Fast and Easy Ways to Improve Your Credit Within Months Improving your credit score can take a few months. So if you’re looking to get an auto or home loan, or want to apply for a new credit card, an early start can give you time to raise your credit score and then get a loan or new credit card at a better interest rate. Here are some ways to improve your credit within a few months: Pay your bills on time Payment history is the most important factor in FICO scores, accounting for up to 35 percent of a credit score. Paying your bills on time — from credit cards to utility bills — can help a lot. Late payments stay on a credit report for seven years. The longer ago they happened, the less they affect credit scores. If a bill goes unpaid long enough the debt can be sold to a collection agency, which will be reported to credit bureaus. Set up online alerts when a bill is due, look at your balances online and set automatic payments for a credit card. Low credit utilization...

6 Small and Easy Steps to Improve Your Credit Score The best way to improve your credit score is simple, but not always that easy: Reduce your debt. Paying off your credit cards, or at least paying them down substantially, will not only increase your credit score, but having less debt will probably be more satisfying than a great credit score. And not using your credit cards anymore and paying off the balances is easier said than done. But there are smaller, easier steps that can improve a credit score. Here are six: Set payment reminders:  Making credit payments on time is one of the best ways to improve your credit score. Set payment reminders on your phone or whatever calendar you use, and check if your bank offers online reminders through email or text messages. Don’t open new accounts:  If you have a short credit history, then opening a lot of credit accounts too rapidly will lower your average account age and can drop your scores if you don’t have a lot o...

The Home-Buying Equation Buying a home for the first time can seem daunting. One way to alleviate the process is to organize your finances before embarking on the house hunt. Unsure how to get yours in order? Remember A + B + C + D + E: Ask + Budget + Check + Differentiate + Estimate Before you start searching for a home , ask  a real estate professional for guidance. He or she will have expertise related not only to financing, but also to negotiating a deal in your favor. Next, set a  budget  that takes into account your down payment, your anticipated monthly mortgage payment (with interest), and your closing costs. These figures are all important considerations in the home-buying process. Prior to house-hunting,  check  your credit report and score. Your credit is a determining factor in a lender’s approval or denial of your mortgage loan application, as well as your mortgage interest rate. Take steps to correct any errors on your report, or im...

Should You Borrow the Maximum a Lender Will Approve? When you apply for a mortgage, a lender will decide how much money it’s willing to give you to put toward the purchase of a house. That doesn’t necessarily mean that you should take out a loan for the full amount. In some cases, borrowing the maximum a lender will allow could leave you overwhelmed by debt. How Lenders Decide How Much You Can Borrow Lenders base their mortgage decisions on several factors, including credit score and length of credit history, but the most important factor is a borrower’s debt-to-income ratio. This is the sum of all debts, including a mortgage, credit card minimum payments, and vehicle, student, and personal loans. Most lenders want borrowers to devote no more than 28 percent of their gross income to a mortgage, property taxes, and homeowners and private mortgage insurance. They also want total debt payments to be no more than 36 percent of gross income. If your debt-to-income ratio is highe...

Benefits of Eating Dinner As a Family With the endless demands of work, school, errands, housework and extracurricular activities, it can be difficult for family members to find time to sit down, relax and talk to each other. But carving out the time to connect with one another can provide a wealth of benefits. In fact, studies have found that regular family dinners can contribute to many positive outcomes and prevent negative ones. Sharing Family Meals Can Help Kids Academically Eating dinner together offers family members an opportunity to engage in conversation about things going on in their lives, current events, as well as their hopes and plans for the future. The wide array of topics that may come up at the dinner table on any given evening can help children learn new words and ideas they may not have encountered in books or at school. While a broad vocabulary can help kids learn to read and express themselves, learning about new topics can keep them actively engaged in...

Is Home Flipping for You? While you may think that home flipping went the way of the dinosaurs after the real estate bust, flips actually rose 3.1 percent from 2015 to 2016, with gross profits averaging $62,624, according to research from ATTOM Data Solutions. Home flipping enjoyed a boost last year thanks to low inventory in many areas of the country and an infusion of foreign and domestic capital, says ATTOM, who reported that roughly 6 percent of condo and single-family home sales in 2016 were flips - the highest share in three years. Hot markets in California - like San Jose, San Diego, and San Francisco - along with cities such as Baltimore, Md., Boston, Mass., New York, N.Y. and Seattle, Wash. earned more than $100,000 in profits. The most flipping took place Florida and Tennessee, where it comprised 11.7 percent of all sales in Memphis, Tenn. Are you ready to get into the flipping game? Consider these pros and cons from The Balance: Pro:  Home flipping can be...

Figuring Out How Much Monthly Mortgage You Can Afford When applying for a home loan, it’s important to keep in mind how much monthly mortgage you can afford. Through the approval process, lenders will factor in your credit score, income and other financial data to determine the maximum loan amount you’re eligible for, and you may qualify for more than you can afford. Consider how much you should borrow to keep your monthly expenses and family budget manageable. To start that calculation, find an online mortgage calculator. It should show you the total costs of owning a home beyond the principal and interest of a mortgage. Other expenses can include private mortgage insurance, home insurance, property taxes and HOA fees. Once you have that total number, you can determine if it fits within your monthly budget. If not, then you may have to find a lower-priced house to buy. 28 percent, a good start The Mortgage Reform and Anti-Predatory Lending  Act  requires mortg...

How to Find the Down Payment for Your First Home If you’re in the market for buying your first home, chances are you have some money saved but you might be worrying a bit about having enough for the down payment. This is especially true for millennials just a few years into the workforce who probably are just learning why their parents always told them to save some of their paycheck each week. Sure, the prospect of saving enough might be difficult to digest when you’re eager to get house hunting, which is why sometimes it makes sense to explore some other means to get the money. Below are some helpful hints to find the down payment you need. Family: Deep down you might be too proud to ask your parents for a handout, but that’s probably the easiest way for you to get the money you need. And many parents probably had a similar experience when they were first starting out and looking for money. Arrange a loan with interest (if your parents insist!) and be prepared to invi...

Get to Know the Language of Lenders If you’re buying a house or condo, chances are you are going to need a mortgage, as having total cash on hand is rare. Most people know you should shop around for a strong rate and lender before agreeing to terms, but many don’t realize the different people involved. By understanding the lender community, you can get financing that makes the most sense for you. Here are some terms you should know: Mortgage Lenders:  This is probably what you immediately think of when you first hear talk of mortgages. Mortgage lenders are the ones that will provide the money you need to buy your home. Simply fill out some information on your financial background, and you’ll see what sort of mortgage interest rate you are eligible for. Mortgage Brokers:  Brokers don’t actually make loans, but they do deal with multiple lenders. You’re still utilizing a lender for the money, but the broker will help you find the one that will offer you the best...

What Is a Negotiated Debt Settlement? If you’re buried by credit card debt, a negotiated debt settlement with your creditor may be worth checking into. Negotiated debt settlement is a general term for discharging debt in a way that appeals to the credit card holder and the card’s issuer. It’s best to negotiate from a position of strength by not having submitted late payments or having missed them, which can cause a credit score to fall. If that happens, cardholders will likely have a harder time getting concessions in a negotiated debt settlement. Instead, they should start talking to their creditor soon after realizing they’re having trouble repaying their debts. -Forbearance There are a few types of negotiated debt settlements, and the simplest one is called forbearance. Banks offer these programs to reduce interest rates, waive late fees and extend repayment terms. Forbearance doesn’t forgive any debt, but offers better terms for repayment. Unemployed cardholders ty...

Buying Your First Home? Simple Tips to Keep the Process Running Smoothly While buying your first home can be nerve-racking, paying attention to the following items will go a long way toward putting your mind at ease as you make your way through the process.   Get your finances in check.  Just because you have money in the bank doesn’t mean you will qualify for a mortgage. Meet with a financial advisor and get a handle on what you can truly afford. If you want to do the numbers yourself, make sure to create a comprehensive list of every possible expense—loans, student debt, monthly expenses, etc.—and don’t rely on your lender to figure out a total for you. Lenders look at your debt-to-income ratio and not necessarily your day-to-day spending habits. Choose an agent.  Buying a new home will likely be one of the biggest decisions of your life, therefore, it’s important to take your time when choosing an agent. Not only do you want someone who is willing to c...