How to apply for a mortgage: Your 4-step guide.

Applying for a home loan is the first step to take when getting serious about buying a home. It will help you understand how much house you truly can afford. Get ready for the application process by gathering your financial info, finding a lender to work with, and getting pre-approved. You can always shop around and pick another lender once you get an accepted offer.

Mortgage loan pre-approval means approaching a lender with financial, credit, debt, and other information that will help them determine if you qualify for a loan at a certain amount.

There are four essential steps involved with mortgage pre-approval:

  1. Gather financial information
  2. Select a lender
  3. Get a mortgage pre-approval
  4. Close on your home

This article will give you an idea of how to get pre-approved for a mortgage and why pre-approval is important for buying a home.

 

How to get pre-approved for a home loan

Step 1: Gather financial information

Before heading to your lender’s office, gather and prepare the following financial information:

Credit Information: Your credit score and reports will determine the size of loan you may qualify for and the type of financing plan you will be offered. For example, a borrower with a credit score below 740 will usually have a higher interest rate associated with their loan. A borrower with a score below 580 will usually have to put down a higher down payment.

Pro Tip: Check your credit score for free with credit.com.

Debt Information: Gather and prepare any of your debt obligations. This includes student loans automobile loans, and credit card payments.

Pro Tip: If you have a significant amount of debt, the amount that you’re pre-approved will likely be smaller or rejected. Before applying for your pre-approved mortgage, try paying off your debts and minimize the number of new debts you take on.

Income Information: Gather and prepare income information from the previous two years. This includes tax returns, W-9s, pay stubs, and additional income information (from second jobs, overtime pay, social security payments, alimony or child support payments, etc.).

Asset Information: Asset information refers to assets you own other than your income. This involves gathering bank statements, property statements, investment information, and money received by family members.

Personal Information: Bring a personal ID such as a driver’s license or passport and your social security number to your lender’s office.

Employment Information: This includes your proof of employment and the length of time you’ve been with your employer.

Budget Information: Before going to see a lender, determine your budget for buying a new home.

Pro Tip: Your total housing payment budget should not exceed 35% of your pre-tax income. The ideal percentage is 25% of your pre-tax income.

Step 2: Select a lender to work with

There are two types of lenders you can work with (1) big lenders (aka the bank) or (2) small lenders (aka small, community banks or small mortgage lenders).

There are pros and cons associated with each type of lender:

Pros of big lenders:

  • Security: You can trust that big banks will protect your sensitive information as it’s a crucial part of their reputation.
  • Customer support: Banks usually offer 24/7 customer support.
  • Availability: Making an appointment for a loan will be easier with big banks as they have a larger number of loan officers available.

Cons of big lenders:

  • Rates: The rates of the big banks are usually higher than the rates at small loan offices.
  • Approval: Banks have a specific ‘credit model’ that they like to use as a guideline for approving people looking for loans. You may have a hard time being approved for a loan by a big bank if you don’t fit this ‘credit model.’

Pros of small lenders:

  • Rates: Small lenders tend to have better rates than the big banks. Furthermore, smaller lenders generally let their customers exit early. In other words, small lenders allow their customers to pay off their mortgage early and either sell their house or find a better mortgage.
  • Approval: Small lenders will generally approve loans to freelance workers, property investors, or someone who doesn’t fit the bank’s credit model.
  • Customer Service: Small lenders provide more personalized customer service and usually have faster response times.
  • Specialized Financing: Smaller lenders offer more specialized financing options than big banks. For example, if you’re looking for a small mortgage, most big banks won’t accept your application because it’s not worth their time. The smaller lender, however, will be happy to work with you.

Cons of small lenders:

  • Vulnerability: Due to their size, small lenders are more sensitive to market fluctuations.
  • Availability: Smaller lenders may not have as many available lenders as the big banks.

Should I get pre-approved by multiple financial institutions to compare rates?

  • Yes, because you can still shop rates before locking into a rate and accepting an offer. Research different lender’s reputation, search for their past clients, read their online reviews, and give them a call to get a ‘feel’ of whether or not you want to work with them.

Step 3: Get pre-approved

Most first-time home buyers are confused about the pre-approval process. So, to clear things up, we answer “how to get pre-approved for a mortgage” and the 6 other common questions first-time home buyers ask about mortgage pre-approval:

1. How do I get pre-approved for a mortgage?

  • Gather Documents: Gather the necessary documents (as listed in step 1).
  • Organize Documents: Create a Google Drive or Dropbox where you can organize all information in one, easily-accessible place.
  • Contact a Lender: Call, go online or visit a loan office/bank. The loan officer will review your documents and give you a preliminary estimate of how much house you can afford, your monthly mortgage payments, and mortgage interest rate.
  • Find out if you’ve been pre-approved: You will receive a pre-approval letter that secures your interest rates for the next 90-120 days (more on this below). On the other hand, your lender will notify you that you have not been pre-approved.

2. Why get pre-approved for a mortgage?

Benefits of Pre-Approvals:

  • Accurate: The best pre-approvals will give you an accurate idea of how much house you can afford. Furthermore, you’ll get an idea of your monthly mortgage payments and your short-term mortgage interest rates.
  • Protection: When you apply for a mortgage pre-approval, there is usually a 90-120 day protection against rising rates. In other words, pre-approvals lock-in interest rates and allow you to search for a home without worrying about interest rates increasing significantly.
  • Trustworthy: A pre-approved mortgage signals to sellers and real estate agents that you’re serious about buying a home.
  • Advantage: A pre-approved mortgage may be the deciding factor between you getting a home over another home buyer.
  • Free: Getting pre-approved for a mortgage is free, and there is no obligation to use the lender that pre-approved your mortgage.

3. What is the difference between pre-qualification and pre-approval?

  • Pre-qualification: During the pre-qualification stage of securing a mortgage, a lender will interview you to determine your income, expenses, and assets. The purpose of getting pre-qualified is to give you a rough estimate of how much house you can afford.
  • Pre-approval: During the pre-approval stage of securing a mortgage a lender will look through your income, expenses, and asset more thoroughly. A pre-approval is a more concrete estimate of how much house you can afford.

4. What if I don’t get pre-approved for a loan? Now what?

If you don’t get pre-approved for a loan, your lender can tell you why you were rejected. Lenders can also offer advice of how to get approved in the future.

For example, you may have to:

  • Build Credit: If bad credit was the reason you aren’t pre-approved, then pay off your credit cards and try not to miss your debt payments for the next 6-12 months.
  • Build Savings: Lenders usually want to see a significant amount of cash reserve in your savings account. Again, pay off your debts and try to save some money before applying for a pre-approval again.
  • Build Income: If your lender says that you don’t make enough income for a certain loan amount, either try applying for a smaller loan or, if you’re married, ask for a joint-loan with your spouse.
  • Build Employment History: Usually, lenders don’t like to see inconsistencies in employment history. Wait until you’ve been at the same job for two years before applying for a loan.

5. Does pre-approval guarantee a loan?
Pre-approval does not guarantee a loan. It is only a review of your qualifications for how much you might be able to borrow.

A buyer receives their pre-approval letters, searches for their dream home within their pre-approved amount, has their offer and financial structure accepted by the sellers, and then submits their proposal to the lender.

The lender then reviews the proposal, the buyer’s finance details, and the details of the property. If everything goes smoothly (i.e., the home doesn’t look like a money pit), the buyer will be approved for a mortgage.

However, the pre-approval letter alone does not guarantee a mortgage.

6. How long does it take to get pre-approved for a mortgage?

Depending on who you’re working with, you can get pre-approved for a mortgage in minutes. Sometimes all it takes is a phone call.

7. What impact (if any) will this have on my credit?

The short answer here is that it depends.

As mentioned above, lenders will look at your credit score and history to determine if you’ll be pre-approved. These are called credit report inquiries.

First-time home buyers usually don’t have to worry about inquires damaging their credit score. However, the more inquires your credit history shows, the more it can damage your credit score.

Inquires hurt your score because it shows lenders that you could be doing something with your credit that puts you at risk.

Step 4: Close on your home

Once you’re pre-approved for a mortgage, you can start the process of searching for a home, within your pre-approved amount.

The process of closing your home looks like this:
1. Application: The mortgage application involves submitting the documents outlined in step 1.

Time it takes: 1 day

2. Loan estimate: The lender analyzes your financial information and produces a loan estimate. A loan estimate describes the details of your loan including the terms and the predicted costs associated with your loan.

The loan estimate does not tell you if you have been approved for a loan. It simply estimates what your loan would look like if you’re approved and will help you determine if you would like to move forward with the mortgage application process.

Time it takes: The law states that you must receive your loan estimate 3 days after submitting your mortgage application.

3. Open a file: Your file is submitted to a loan processor who analyzes your financial documentation and property information. The loan processor places all this information into a loan package that is to be submitted to the underwriter.

Time it takes: 1 day

4. Loan underwriting: An underwriter analyzes your loan to determine the risk of approving your mortgage. Essentially, the underwriter is the key-decision maker and determines if you’re a good candidate for a loan based on the likelihood of you paying your mortgage each month.

The duties of an underwriter:

A. Assess: The underwriter assesses your risk by verifying that your credit, debt, income, and savings information is true. For example, they may call your employer to confirm that you do in fact work x amount of hours and are paid x amount of dollars.

B. Appraise: This is where the underwriter determines if your desired property’s price is comparable to the prices of similar properties. The purpose of the appraisal is to determine if the money you would like to borrow matches the value of the home you would like to purchase. If the appraisal is less than the loan amount, the underwriter will usually disapprove the mortgage or suggest another loan amount.

C. Approve or reject: The underwriter considers all this information and then approves or rejects your loan application.

Time it takes: 1-7 days

Pro Tip: The underwriting process generally takes longer and requires more documentation if you’re self-employed.

5. Mortgage Commitment: If the underwriter approves your loan, you are officially locked-into an interest rate.

Time it takes: 2-4 days

6. Closing: This is the step in the home-buying process where you sign all the necessary documents to own the home officially.

 

I read this article at: Open Listings

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

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A Family of Realtors
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Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

How Long Does It Take to Improve Your Credit Score Enough to Buy a Home?

A new year means new goals.  If home ownership is one of them – it’s time to make sure your credit is in check.

How long does it take to improve your credit score? If you’re hoping to buy a home, having a good credit score is key, since it helps you qualify for a mortgage. So if your credit score is low, knowing how long it takes to raise it to home-buying range can help you plan.

While raising a credit score can’t happen overnight, it is possible to raise your credit score within one to two months. However, it could take longer, depending on what’s dragging down your score—and how you handle it. Here’s what you need to know.

How long does it take to raise a credit score?

First off, what’s considered a good score versus a poor one? Here are some general parameters:

  • Perfect credit score: 850
  • Excellent score: 760-849
  • Good credit score: 700 to 759
  • Fair score: 650 to 699
  • Low score: 650 and below

While it varies by area and type of loan, generally lenders will look for a score of 660 or higher to grant a mortgage (here’s more on the minimum credit score you need for a home loan).

If you’re looking to boost your credit score fast, here are some actions you can take.

Correct errors on your credit report

Correcting errors on your credit report is a relatively quick way to improve your credit score. If it’s a simple identity error—like a credit card that’s not yours showing up—you can get that corrected within one to two months.

If it’s an error on one of your accounts, though, it could take longer, because you need to involve your creditor as well as the credit bureau. The entire process typically takes 30 to 90 days. If there’s a lot of back-and-forth between you, the credit bureau, and your creditor, it could take longer.

The first step to correcting errors is to get a copy of your credit reports from TransUnion, Equifax, and Experian (the three major credit bureaus), which you can do at no cost once a year at annualcreditreport.com. Next, review them for errors. If it’s an error on one of your accounts, you must refute that error with the bureau by providing documentation arguing otherwise. For example, if you paid a credit card on time and the card issuer is reporting a late payment, find a bank statement showing that you paid on time.

Credit bureaus typically have 30 days to investigate the error. If they agree that it’s an error, they will remove the item. The credit bureau may also ask for additional information or ask you to discuss the information with the creditor involved. If that’s the case, stay on top of communications with your creditor so you can get things resolved as quickly as possible.

Deal with delinquent accounts

Bringing delinquent accounts current and settling accounts that are in collections can also boost your score fairly quickly. Once the creditor or collection agency reports your account update, you should see a positive bump in your score. Keep in mind, though, that your late payment history will remain on your credit report for seven years.

If you have bad accounts that have been on your report for six years or more, you may not want to worry about settling them or bringing them up to date. This can re-age the account, and if you fall behind again, it will stay on your credit report for another seven years.

“Make sure you don’t re-age these accounts, because they’re going to drop off soon,” says Nathan Danus, CDMP and Director of Housing and Community Development at DebtHelper in West Palm Beach, FL. Negative information typically “falls off” your credit report after seven years, so if you’re close, it’s best to just wait it out.

Lower your credit utilization

Credit utilization refers to how much you owe compared with the amount of credit you have available. For example, if you have a $10,000 credit limit across all your credit cards and you have balances totaling $9,000, you’ve utilized 90% of your credit. This drags down your credit score.

“What these consumers often need to do is pay down the balances on their existing credit accounts, which can be a challenge if they’ve allowed the balances to creep up over time,” says Martin H. Lynch, compliance manager and director of education at Cambridge Credit Counseling of Agawam, MA. “The ratio of what’s owed to the amount of credit available represents 30% of the consumer’s score, so rapid improvement is possible if there’s a large amount of money available to pay down balances.”

Linda L. Jacob, a financial counselor at Consumer Credit of Des Moines, IA, recommends paying down balances to below one-third of your credit line. Any payments you make will be reflected on your credit report as soon as your creditors report your payment to the credit bureaus. Credit scores are updated on an ongoing basis, and creditors typically report once per month, so if you make a payment that lowers your credit utilization, that should be reflected on your credit score within two months.

If you’re regularly using your credit card but you want to keep your utilization low so you can apply for a mortgage, you may want to pay down your credit-card balance on a weekly or biweekly basis. This ensures that your balance is as low as possible whenever your creditor reports your payment history to the credit bureaus.

You can also decrease your card utilization by getting more credit, but this approach can backfire. Consumers sometimes assume that by getting more credit, their credit score will improve. If you have a $3,000 balance on a card with a $4,000 credit limit and you’re approved for a new credit card with a $1,000 limit, you now have $5,000 in total credit lines. Instead of using 75% of your available credit, you’re now using 60%. That’s better, right?

Not necessarily. “Just applying for credit lowers your credit score, and that effect lasts for months,” warns Mike Sullivan, personal finance consultant at Take Charge America in Phoenix, AZ. “For the first few months after you apply for credit, your credit score may actually go down.”

You can try getting around this by asking a credit limit increase on a card you already have. Be sure to ask whether they do a “soft” credit pull rather than a “hard” credit pull, though, since hard credit inquiries are the ones that impact your credit. A creditor may be willing to give you a credit line increase with a “soft” pull, which will not hurt your credit score.

Soft inquiries are for background purposes only. For example, a credit card company may do a soft pull to see if you’re eligible for certain credit card offers, or an employer may do a soft pull before offering you a job. Soft pulls can be done without your permission and do not impact your credit score. Hard pulls require your permission, and are done when lenders or credit card companies are assessing whether to grant you a loan or line of credit.

How to raise your credit score for the long haul

Once you’ve corrected errors, settled your delinquent accounts, and brought your credit utilization under control, the only other things that will improve your score are time and developing good payment habits. For example, if you tend to forget to make payments, you can set up automatic payments so you don’t forget.

And here’s some good news for people with bad credit: Generally, people with the lowest scores will see the biggest gains the fastest.

“It’s a lot like dieting,” says Sullivan.

For instance, if your score is 550, “you could probably get it up 30 points in a matter of a couple months, if you’re really dedicated and really careful,” he explains.

On the other hand: “If your credit score is already a 750 and you’re trying to get it to 780, that can take double or more the time.”

Still, it’s worth doing whatever you can to get the best interest rate possible.

For more smart financial news and advice, head over to MarketWatch.

Melinda Sineriz is a writer living in Bakersfield, CA. She writes about personal finance and real estate for several websites and businesses.

I read this article at:  Realtor.com

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
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Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

 

Conventional Financing for Manufactured Homes Coming

What a great way to start the new year – new options in financing!

 

Freddie Mac has announced that it will start financing manufactured housing, which it hopes will help make homes more affordable to buyers. The mortgage financing giant says it will conduct a two-year pilot called CHOICEHome to grant conventional financing for manufactured homes with certain features, such as permanent and pitched roofs. Many of the manufactured homes also have energy-saving features, such as Energy Star Qualified Low-E windows, programmable thermostats, and minimum insulation values.

Factory-built homes that meet Freddie Mac’s specifications will be eligible for a CHOICEHome certification and CHOICEHome financing. Freddie Mac’s HomeOne and Home Possible loan programs will also be available for manufactured housing. Freddie Mac also says appraisers will now be able to use site-built housing as a comparable valuation. “Today’s manufactured homes can deliver outstanding quality at prices that are up to 50 percent less per square foot than conventional site-built homes,” Freddie Mac notes. “These savings can enable more Americans to own their own home, even in the face of an ever-widening housing affordability gap.”

Currently, more than 22 million families live in factory-built housing. That number is expected to grow, says Mike Dawson, vice president of single-family affordable lending strategy and policy at Freddie Mac. “There’s an opportunity for factory-built homes to address the housing supply shortage and quality housing overall,” Dawson says. “This new generation of manufactured housing might just be the best option for first-time home buyers, millennials, and empty-nesters looking to downsize.”

Source: Freddie Mac  

I read this article at: Realtor Magazine

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

 

Do Low Down Payments Make Mortgages More or Less Affordable

Do Low Down Payments Make Mortgages More or Less Affordable

File this question under “it depends.”

It’s true that loans with down payments of 20 percent or more cost borrowers less over time than low down payment loans. Low down payments leave larger principals to pay off, and those principals create more interest over time. Low down payment loans also require mortgage insurance.

However, a low down payment itself can actually boost affordability by getting you off the sidelines and into a home of your own sooner.

Let’s look at the numbers.

 

At current interest rates and based a median family income, you’d need about 22 percent of your income for monthly payment with a 20-percent-down mortgage and about 24 percent with a 3.5 percent down payment. And, should rates rise to 4.75 percent by the end of this year, a buyer putting 20 percent down would pay about 25 percent of his monthly income and a buyer using a low-down payment loan at 3.5 percent down payment would pay about 28 percent of the buyer’s monthly income.

While 20 percent isn’t necessary and isn’t even the average (7.6 percent), it will help reduce the monthly payment simply because your total mortgage loan is less than with a lower down payment. But, it’s important to evaluate the cost-benefit of a lower down payment.

Why low down payments help

Forgoing a low down payment today to save for a 20 percent down payment in the future changes the equation for first-time buyers. With home prices and rates on the rise in 2018,  affordability will likely worsen in the months ahead.

In fact, a recent survey by Apartment List found that it takes many millennials a decade or more to save enough to make a 20 percent down payment. By that time, the costs of waiting so long will outweigh the advantages of a larger down payment.

Since 2012, it has been cheaper to buy than rent in most markets and rents today are consuming an even larger share of monthly disposable income. By the end of this year, rates could rise as high as 4.75 percent, and prices are forecasted to continue to rise in 2018. Rising rates and prices will increase the cost of a 20 percent down payment for those who delay.

In the Barriers to Accessing Homeownership study released in November, analysts at the Urban Institute’s Housing Finance Policy Center concluded that “with rising home prices and interest rates, access to sustainable mortgage credit is often only possible with low–down payment loans.”

Evaluate your options

Don’t aim for a 20 percent down at all costs. Yes, it can help drive down your monthly payment, but you also want to ensure you have a strong financial cushion when you become a homeowner. And, if you wait too long, you may end up paying more with a higher interest rate and home prices.

Search for homebuyer programs available in your market and for your personal situation. You may find a program that can help with the down payment and/or closing costs.

Find a knowledgeable agent or lender who is eager to teach — you want someone who can help you evaluate all your options.

For more data and information on down payment trends from a variety of sources, subscribe to our monthly Down Payment Report.

I read this article at: https://downpaymentresource.com/low-payments-make-mortgages-less-affordable/

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Buying a home? Here’s what the Equifax breach could mean for you.

Buying a home? Here’s what the Equifax breach could mean for you.

We should all be paying attention to the recent Equifax data breach, estimated to potentially impact the personal data of 143 million U.S. consumers. Not great odds considering that’s one third of the entire country. But, if you’re currently applying for a mortgage or buying a home, you need to stay extra alert.

Back up. So, what happened?

On September 7, Equifax revealed that hackers gained access to company data that contained sensitive information including social security and driver’s license numbers. You go to Equifax’s cybersecurity page to see if your data may be included in the breach, but there’s really no definitive way to tell. Just assume your data was impacted and play it safe.

Why is this such a big deal?

While data breaches are nothing new in recent years (think Target and TJMaxx), this one is especially sensitive due to the nature of the data as well as the shear number of consumers impacted. As one of the country’s three credit reporting companies, Equifax holds the keys to A LOT of your personal data — enough to do major damage including stealing your identity or even purchasing a home in your name.

At the same time, in today’s online, cloud-based world, any organization could be at risk.

“I’m not surprised that anyone gets hacked these days. If the Pentagon and White House can be hacked, any of the three credit agencies could, too,” said personal finance expert and syndicated real estate columnist Ilyce Glink, publisher of ThinkGlink.com.

What does this mean for homebuyers?

If you’re in the process of applying for a mortgage or buying a home, this credit breach couldn’t have come at a worse time. Housing columnist Ken Harney recently laid out a few scenarios that could impact your home purchase.

Hackers could create new accounts in your name that put you into debt and drain your FICO credit score. We know your credit score is at the center of your purchase–it determines what type of loan you qualify for and your interest rate. That’s a big deal considering most first-time homebuyers choose a 30-year loan.

Fraud can ultimately impact your ability to qualify for a home loan. Furthermore, getting your credit file corrected can take time and cause you to lose out on your home contact.

What can you do?

Check your credit report. The most important first step is to check your three credit reports free at annualcreditreport.com to determine if anyone has tampered with your accounts. It also provides you with a baseline credit report as you monitor for any changes.

Review your monthly statements. Don’t rely on auto payments for your credit card or other bills. Review your statements and be on the lookout for anything out of the ordinary.

Review your bank statements. Review your bank statements weekly. Set up mobile banking alerts so you know if any unplanned transaction takes place.

Fraud alerts. Consider placing a fraud alert on your files. It warns creditors to take extra steps to verify your identity before issuing credit in your name. To set up, contact one of the three major credit reporting companies and they will send your request to the other two bureaus.

Credit freeze. Although credit freezing isn’t typically recommended before a major purchase, experts including Terry W. Clemans, executive director of the National Consumer Reporting Association, now give this guidance. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts. You’ll have to contact each company to set it up and costs may vary.

File your 2017 taxes ASAP. This is the year to file your taxes early — take action before any scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.

Credit reporting companies

Equifax: 1-800-525-6285 or www.equifax.com

Experian: 1-888-397-3742 or www.experian.com

TransUnion: 1-800-680-7289 or www.transunion.com

I read this article at: https://downpaymentresource.com/buying-home-heres-equifax-breach-mean/

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office: 650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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Or YELP me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedInhttps://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Click Here for Help with Down Payment Assistance Programs in California

Hello Fellow Californians!

I personally understand that struggle of coming up with the down payment to buy a home.  20% in any price range can be a daunting figure to save up for.  And if you’re buying in an appreciating market, for instance, the Silicon Valley – then sometimes you can’t save fast enough!

Thankfully the California Association of Realtors created a website where you can search for downpayment assistance programs statewide.  We added it to our website – please check out the link below…

http://thecatonteam.com/downpaymenthelp

We know you’ll have questions – so please feel free to contact us any time.

Call our desk at 650-568-5522 – you can also leave a message or email us at Info@TheCatonTeam.com

Prefer to send a text – happy to share my private cell!

 

The Caton Team Realtors is here to guide the way.  What can we do for you?

 

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page:  http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

Visit us on FACEBOOK:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedInhttps://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

 

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

Co-borrowing on the rise: What makes for a smooth deal?

With so much talk about “Equity Share” and helping buyer get into homes – it’s time to talk about how it works.  Thought I would share this article BY LEW SICHELMAN

Co-borrowing on the rise: What makes for a smooth deal?

The most important consideration isn’t getting into a co-borrowing deal, but how all parties plan to get out of it.

Ever since Ugh married Meg and they could barely afford their first cave, there have been co-signers named Mom and Pop making mortgages possible.

But co-signers can come in many forms. Another relative, friend, employer, roommate, significant other or even an investor can agree to be on a mortgage that someone can’t qualify for on his or her own.

Nowadays, slightly more than one in every five houses purchased with financing in the first quarter — 22 percent — involved co-borrowers, according to Attom Data Solutions. That’s up from 20 percent for the same period last year and in 2015, when the real estate information company first began tracking the phenomenon.

The incidence of co-borrowers is even higher in 11 of the country’s largest cities. In Miami, a whopping four out of every 10 single-family dwellings purchased in January, February and March were bought with an unmarried co-borrower. In Seattle, the share of co-borrower purchases was 37 percent; in San Diego and Los Angeles, 28 percent.

The main reason homebuyers need co-borrowers is because they can’t qualify to purchase the house they want, says Attom Chief Economist Daren Bloomquist, who co-signed for his wife’s sister and her husband so they could afford to buy in pricey Southern California.

Housing prices are so expensive in some locations that without help, many buyers might be relegated to the rental market forever.

And some buyers don’t have the credit scores, credit histories or the debt-to-income ratios to buy, even at a reasonable price. On top of that, many buyers are looking at houses beyond their means.

Blomquist is seeing a rise in companies offering to help young buyers in exchange for a piece of the action in the form of shared appreciation. Outfits such as unison.com “are institutionalizing the idea of co-borrowing and shared equity,” he explained.

All of this begs the question: How should you approach a co-borrowing situation, both as a buyer and as a co-signer?

When co-borrowing gets complicated

The most important consideration isn’t getting into a co-borrowing deal, but how all parties plan to get out of it.

While clear heads prevail — when both sides are excited about the deal and there have been no disagreements yet — you should sit down together and decide how and when it will end.

It might make sense for the agreement to last long enough for the buyer to build up credit, income and cash reserves to eventually buy out the co-signer. But what if interest rates rise, and it’s unwise for the buyer to seek a new loan? In that scenario, the deal might include some kind of buffer, either a period of time or a certain mortgage rate.

The main point to parse is what share of the profits the co-borrower will be entitled to, if there are, indeed, any profits to split. A relative may not want anything in return — thanks, Mom and Dad! — but a less partial signer might want a healthy chunk.

It’s easy to identify profit if a buyer agrees to sell and move on. But if there is no sale, the parties will need to know the home’s value at the time the deal is to be dissolved.

An appraisal, the cost of which should be borne equally, is in order in this case. But if one side or the other disagrees with the valuation, it might be a good idea for each party to pay for their own appraisal. If there is any difference between the two, one option could be to split the difference down the middle.

The parties should also have a plan for if the value of the property goes down: Will the co-signer share in the loss, and to what extent?

Another aspect of the deal that people tend to forget is improvements made to the property during the co-owner period. Usually, the buyer foots the bill for things such as landscaping and an addition. But will he or she have to share in the value these and other features that add to the home’s worth?

Co-signers on the mortgage are not on the title and have no ownership interest in the place. Yet their own debt-to-income ratio could take a hit because they have incurred debt by co-signing. Consequently, their ability to obtain their own mortgage, home equity loan or even a credit card could be limited.

Remember, too, that if a buyer doesn’t make the house payments as promised, the lender will come to the co-signer, who will be responsible not just for the payments but also late fees and, if it comes to that, collection fees and lawyer’s fees. Late payments are likely to take a heavy toll, as is a co-signer’s personal relationship with the buyer.

To protect themselves and keep tabs on “tardy alerts,” co-borrowers should insist that both they and the buyer be billed separately by the mortgage company.

Lew Sichelman’s weekly column, “The Housing Scene,” is syndicated to newspapers throughout the country.

The Caton Team is comprised of Susan and Sabrina Caton – a mother/daughter in law team.  We are full time, local Realtors with over 25 years of combined Real Estate experience.  How can The Caton Team help you?

I read this article at: https://www.inman.com/2017/08/30/co-borrowing-on-the-rise-what-makes-for-a-smooth-deal/

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office: 650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page:  http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

Visit us on FACEBOOK:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedInhttps://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008