You look into your credit report and see that your score is not as high as you had expected. What could have gone wrong? Although you think you may have done everything right, some seemingly harmless actions could negatively affect your credit.
Paying off credit card debt & closing accounts — Paying off credit card balances is always a good idea, but in some situations closing them after your payment has been made can negatively affect your credit score. Fifteen percent of your credit score is determined by the length of time that accounts have been established so if you must cancel a card, be sure it is one with a short credit history. Also, be sure to keep a good mix of credit (at least 1-2 major credit cards) as that can account for 10% of your score.
Maxing out cards & paying them off after the next statement — Although you paid off your balance, your statement will still reflect the status of your card. Your credit report will show that you have maxed out your card even if you pay the full balance the day after it your statement posts. To avoid this, be sure to pay any high balances off before the next statement date. A best practice for keeping your credit score in tact is to keep balances below 30% of your available credit.
Making payments a day late — Unfortunately, a day late is a day late. Your credit report will not state how many days late your payment was so you will still receive a 30-day late penalty. Many credit card companies may also charge a late payment penalty or increase interest rates for being late on your payments. To avoid penalties, be sure to schedule monthly payments for at least the minimum payment due. This will keep you in good standing until you have the opportunity to make a larger payment or pay off the balance.
Paying off old collections — This may seem to be a good thing to do, but it may actually harm more than help. Credit scoring models lend more weight to recent activity so making this a current activity on your credit report may hurt your score. If you do plan on paying off old accounts, make sure that all agreements have been signed & the creditor will be giving you a letter of deletion.
There are always steps that can be taken to improve low credit scores. If you have any questions about credit scoring and how it will affect you during the mortgage process, contact one of our Loan Originators. They will be happy to help you get on track and on the road to homeownership!
You’re about to close on your new home. You’ve followed the wiring instructions that were in the email your Realtor sent you. You check to make sure the funds were withdrawn, but see that your account is completely empty…
This is the result of one of the newest online scams: taking advantage of home buyers who are excited about closing on their new home. The Federal Trade Commission (FTC) and the National Association of Realtors have issued a warning about a new phishing scheme that has left many people with no money in the bank.
Hackers have figured out a way to access clients’ and Realtors’ email accounts. The hackers are then able to get information about the upcoming closing. With the closing date in hand, the hacker will send an email to the buyer pretending to be a Realtor or Title Company employee. The fake email claims that there has been a last-minute change in the wiring instructions, and includes different bank account information that the buyer should wire funds to the new account. In reality, the new account belongs to the hacker. Before anyone realizes what has happened, the money is gone from the account.
How to Avoid It
- Contact your Real Estate Professional or Title Company to see if they actually sent you the email about the change.
- Do not send financial information via email. It is not secure and can be easily accessed by hackers.
- Make sure any websites you transmit financial information through are secure. You can tell by looking at the URL at the top of the screen. If it is https instead of http, that means it is a secure site.
- Access websites by manually typing in the page information instead of clicking on links you receive in emails.
- Consistently update your computer security and anti-virus programs.
- If something feels suspicious, trust your gut.
At Homestead Funding Corp., we take our clients’ privacy very seriously. We have several measures in place that help protect your personal information. If you believe you may be the victim of a financial scam, please report it to the FTC as soon as possible at https://www.ftccomplaintassistant.gov.
Homestead Funding: Why Refinance Your Mortgage ?
The general rule for refinancing a mortgage has always been if you can reduce your rate by .75-1% or more, then it is the perfect time to refi. This may be considered the best reason to refinance, but it is not the only reason why it may be in your best interest. Some other reasons why it may be a good time to refinance your mortgage are:
You'd like to lower your monthly out-of-pocket costs — Saving money each month on your mortgage, no matter the amount, can make a big difference. It's always a good idea to look into your refinance options when interest rates are low.
You need to build equity — When you are able to pay more each moth, it may be beneficial to refinance a 30-year loan into a 15- or 20- year loan. Cutting the term of your loan builds equity faster and could also save you money paid on interest over the life of the loan.
A different loan program may work better for your situation — When you first applied for your loan an Adjustable Rate Mortgage (ARM) made the most sense for you. If your situation has changed, a Fixed Rate may work better for you now. There’s never any harm in checking if a new loan product could help you save money and streamline your finances.
Your credit has improved — After making mortgage payments on time and in full, your credit score may have improved. Reviewing your current score and looking for any new options that may be available to you could increase your savings over the life of the loan.
You’d like to tap into your home’s equity — A cash-out refinance may be the best option for you to pay for the long-awaited home renovation or other expenses.
If you have been on the fence about whether or not to refinance your home, we would be happy to help assess your situation and see if refinancing makes sense for you. Contact us today to get started!
Back-to-school shopping can become an expensive, time consuming and even stressful event. Here is a checklist that will help keep your family on time, on task, and on budget:
- Stick to the teacher's list of supplies; don’t buy extraneous items that may go to waste
- See what you have at home first; you may already own most items
- Wait until sales are advertised
- Buy plain lunch-boxes and let your kids decorate them
- Clip coupons from Sunday circulars
- Shop discount stores first such as Dollar Tree or Five Below
- Follow stores' social media accounts for sale alerts
- Buy in bulk and split among multiple families
- Try thrift shops such as Salvation Army or Plato’s Closet
- Go discount, such as TJ Maxx, Marshall's or Nordstrom Rack
- If not discount, try overstock.com, zulily.com and ClothingUnder10.com
- Make alterations to old clothes: hem pants, dye shirts or sew on patches
- Old Navy, Gap Kids, The Children's Place refund the difference on new sale items within 14 days
- Use Craigslist or Facebook garage sales to sell stuff for extra cash
In the Community
From June 1st to July 31st, all mortgage applications submitted with Homestead were entered into our Back to School Contest. We pulled two winners and they each won a $250 Visa Gift Card!
Our first winners were Joe and Brittany, who are currently working with Loan Originator Jason Young! They’re about to close on their home, and couldn’t have been more thrilled to find out from Jason that they were one of the winners of our contest.
Joe and Brittany have experienced a bunch of firsts this year. They just got engaged, they’re buying their first home, and their son Joey is starting his first year at pre-school. They can’t wait to put this extra money towards preparing Joey for his first year at school!
We wish Joey luck on his first day, and Joe and Brittany all the happiness in the world experiencing many more firsts in their new home.
Our second winner was Ramona! Ramona is currently working with Loan Originator Amy O’Rourke. She came to Homestead from Pioneer Bank, and says that she couldn’t be happier working with Amy. Ramona is in the process of purchasing her first home, and having lived previously in only apartments, she is VERY excited to start shopping for her new place!