CENTURY 21 Classic Gold



Posted by CENTURY 21 Classic Gold on 8/10/2018

There’s numerous reasons why the name on a title to a home may not be the same as the name that’s on the mortgage loan. These reasons include:


  • Only one buyer had stable credit
  • Only one person was on the loan application
  • One person was released from the mortgage


No matter why this is the case, having your name on the mortgage but not on the title to a home can affect you and people residing in the home in different ways. 


Why Would Only One Name Be On The Mortgage?


If people are looking to get a home or refinance a home, but only one person has good credit a decision must be made. For the best possible mortgage rates, you’ll want to person with the best credit to be the primary loan holder. This may mean that you need additional legal documents in the process.  


The person with lower credit may still be able to have their name placed on the title to the home. Anyone who plans to contribute financially to a home, even if not on the mortgage, should place their name on the title. This would be one instance when a name would be on the title to a home and not on the mortgage loan. In this case, a person has property rights, but no legal-financial responsibility to the home. It’s important to agree on the home arrangement that you’re considering. This would be done through a will or a legal contract. This way, all parties are protected in regards to the ownership of the home should something happen to the individual whose name is on the mortgage.


Legal Things To Consider


Those who are listed on the mortgage are the people who are responsible for house payments. If a person’s name isn’t on the mortgage, it doesn’t release them from complete responsibility from the home. If your name is on the title to the home but not on the mortgage, the bank generally has first dibs on the home if there’s a lapse in payments. If you want to keep living in the house, you’ll have to keep making payments on the home. If you can’t make the mortgage payments, you’ll risk going into foreclosure. 


Taxes


An issue that can come up if your name is not on the mortgage is that you cannot use the home you’re living in as a tax deduction. Even if you make payments on the home, in order for you to get tax benefits, your name must be on the mortgage stating that you’re legally responsible for the home. If you are paying for the mortgage because your name appears on the title to the home, you aren’t legally entitled to pay, giving away your rights to tax benefits. If you’re married, filing jointly, and only one name appears on the mortgage, however, you can use this as a tax deduction. This becomes an issue if two unmarried people buy a home together.  


Ask For Legal Assistance


Whenever you have an issue with the title of your home or with names on the mortgage, it’s good to consult legal counsel. The attorney can assist you in determining who is legally responsible for the home and if the people listed on the title of the home are correct. This can help save you from trouble at a future date.


Since credit scores and loans can get messy at times during the home buying process, it’s good to understand all the implications of home mortgages and titles.




Tags: Buying a home   Mortgage  
Categories: Buying a Home   mortgage   Title  


Posted by CENTURY 21 Classic Gold on 7/6/2018

If you’re trying to get ready to buy a home, one of the biggest tasks that you’ll need to take on is that of saving for a down payment. The down payment will need to be a significant amount of money. If you put it in the right place, it will have the ability to gain some interest. Most importantly, you don’t want to have access to the money so that you can spend it freely. 


What’s Your Time Frame?


When you start saving money, you’ll need to know what your time frame is to better discern one of the best places to keep your down payment money. You can put your money in a CD or money market account, but the money will need to stay put for anywhere between 1-2 years. In the case of down payment money, the amount of interest that you gain isn’t as important as having access to the money when you need it. 


Research Your Options


Do your research in order to find the best deals. You may be able to gain a bit of interest  on a 3-month CD if you’re short on time. If you have a bit more room for growth and will continue to compound the money, search online for higher yield savings accounts that will allow you to continue contributing money over time. You can even consider putting portions of your money in different places with different time frames and interest rates. This way, some of your money will have a chance to grow, yet you’ll still have access to it. 


Know The Home Buying Process


When you get pre-approved for a loan, the mortgage company will go through your entire financial history past and present. You’ll need to show all of your bank accounts and their balances along with pay stubs. The mortgage company will also delve into your debt and calculate what is called your debt-to-income ratio. Before you even get to the stage of pre-approval, you’ll want to make sure all of your significant debt is paid off. 


Once you get to the closing table to buy your dream home, your check for all of the closing costs including the down payment will need to be present. This is why you need to make sure that your money isn’t tied up when you reach the point of purchasing a home. Generally, a bank check will need to be issued for the entire cost of closing less the deposits that you have already made on the home.                          


Make a plan for your saving the down payment and you’ll be well on your way to securing your dream home!





Posted by CENTURY 21 Classic Gold on 6/1/2018

It’s hard to overstate the importance of credit scores when it comes to buying a home. Along with your down payment, your credit score is a deciding factor of getting approved and securing a low interest rate.

Credit can be complicated. And, if you want to buy a home in the near future, it can seem daunting to try and increase your score while saving for a down payment.

However, it is possible to significantly increase your score in the months leading up to applying for a loan.

In today’s post, we’re going to talk about some ways to give your credit score a quick boost so that you can secure the best rate on your mortgage.

Should I focus on increasing my score or save for a down payment?

If you’re planning on buying a home, you might be faced with a difficult decision: to pay off old debt or to save a larger down payment.

As a general rule, it’s better to pay off smaller loans and debt before taking out larger loans. If you have multiple loans that you’re paying off that are around the same balance, focus on whichever one has the highest interest rate.

If you have low-interest loans that you can easily afford to continue paying while you save, then it’s often worth saving more for a down payment.

Remember that if you are able to save up 20% of your mortgage, you’ll be able to avoid paying PMI (private mortgage insurance). This will save you quite a bit over the span of your loan.

Starting with no credit

If you’ve avoided loans and credit cards thus far in your life but want to save for a home, you might run into the issue of not having a credit history.

To confront this issue, it’s often a good idea to open a credit card that has good rewards and use it for your everyday expenses like groceries. Then, set up the card to auto-pay the balance in full each month to avoid paying interest.

This method allows you to save money (you’d have to buy groceries and gas anyway) while building credit.

Correct credit report errors

Each of the main credit bureaus will have a slightly different method for calculating your credit score. Their information can also vary.

Each year, you’re entitled to one free report from each of the main bureaus. Take advantage of these free reports. They’re different from free credit checks that you can get from websites like Credit Karma because they’re much more detailed.

Go through the report line by line and make sure there aren’t any accounts you don’t recognize. It is not uncommon for people to find out that a scammer or even a family member has taken out a line of credit in their name.

Avoid opening several new accounts

Our final tip for boosting your credit score is to avoid opening up multiple accounts in the 6 months leading up to your mortgage application.


Opening multiple accounts is a red flag to lenders. It can show that you might be in a time of financial hardship and can temporarily lower your score.





Posted by CENTURY 21 Classic Gold on 1/5/2018

What do buying a house, opening a credit card, and getting approved for an auto loan have in common? They all depend on your credit score.

Building credit is a multifaceted undertaking. In a way, this is a good thing--you wouldn’t want lenders to base their opinions solely on one aspect of your financial history. The downside is that understanding just what makes up your credit score can be difficult.

To complicate matters further, there isn’t one standard method for scoring your credit, and different credit bureaus each use their own criteria.

In this article, we’re going to talk about some of the factors the major credit bureaus use to calculate your credit, and give you some ways you can boost your credit.

But first, let’s talk about some of the implications of having a good credit score.

Why credit matters

Typical credit scores range anywhere from 250 to 850. The three main reporting agencies (Equifax, TransUnion, and Experian). Most lenders use a combination of those scores that is reported by FICO.

Most credit reports will rank your category from “bad” to “excellent.” Here’s an example of what a credit ranking might look like:

  • Excellent: 750+

  • Good: 700 - 749

  • Fair: 650 - 659

  • Poor: 550 - 649

  • Bad: -550

U.S. legislation makes it possible for Americans to receive a free report of their credit score and to challenge and correct the score if it contains inaccuracies.

If you’re thinking about buying a house, opening a new line of credit, or taking out a loan of some kind, then the provider will likely run your credit score. Those providers are going to want to see a return on their investment, so they’ll charge interest.

If you have a high credit score, it tells the lenders that you are a low-risk investment, and therefore they can offer you a lower interest rate, saving you money in the long run.

Components of a credit score

There are five main factors that credit bureaus take into consideration when formulating your credit score. Not all of the factors are treated equally. Your ability to pay your bills on time, for example, is considered to be more important than the types of bills you have. Here’s a breakdown of the five components that make up a credit score:

  • 35% - Bill and loan payments

  • 30% - Current total amount of debt

  • 15% - Amount of time you’ve had credit (since you took out your first loan or opened your first credit card)

  • 10% - Types of credit (cards, loans, etc.)

  • 10 % - New credit inquiries

Quick tips for building credit

It takes time to build credit and improve your score. So, if you’re hoping to buy a home within the next few years, now is the time to start working on your credit. Here are some best practices for building credit:

  • Set up autopay for your bills to avoid late payments. Even if the service doesn’t offer autopay, you can likely set up recurring payments through your bank.

  • Settle outstanding debt. Avoiding debt that you can’t pay off will only hurt you more in the long run. Call your creditor and see if they offer debt relief programs. More likely than not they’d rather work with you to ensure they receive some repayment rather than none at all.

  • Start budgeting the right way. New budgeting software like Mint and “You Need a Budget” are easy to use and link up with your accounts. They’ll help you monitor your spending and start paying off debt.

  • Don’t open new lines of credit close to when you want to take out a loan. New credit inquiries can briefly lower your credit, especially if you make more than one. Viewing your free credit reports doesn’t count as an inquiry, so feel free to do that as often as needed to check your progress.

  • Get credit for bills you’re already paying. You can report your monthly rent payments, switch bills into your name that you contribute to, or take out a credit builder loan. All three will help you build rent without changing your spending habits.







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