What Homebuyers Need To Know About Credit Scores

If you’re thinking about buying a home, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan.

Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from Bankrate explains:

 “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”

This means your credit score may feel even more important to your homebuying plans right now since mortgage rates are a key factor in affordability, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 765. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider explains generally how your FICO score range can make an impact:

“. . . you don’t need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you’re wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).” 

Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO says:

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”

If you’re looking for ways to improve your score, Experian highlights some things you may want to focus on:

• Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.

• Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.

• Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.

When you’re ready to start the homebuying process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.

Bottom Line

With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, connect with a trusted lender.

Read on.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Should You Buy or Sell a Home in 2023? Here’s the Realtor.com Housing Forecast for the Rest of the Year

What a difference a few months can make in the housing market.

Late last year when Realtor.com® issued its housing forecast for 2023, our economics team believed the number of homes for sale would jump substantially, home prices would continue climbing, and rising rents would continue to bedevil tenants across the country.

Clearly, not all of our predictions came true. That’s why Realtor.com has revised its forecast to reflect some new realities in the housing market that are having an outsized impact on buyers struggling with higher costs, sellers reluctant to give up their rock-bottom mortgage rates, and shell-shocked tenants who endured years of landlords jacking up their rents.

“It was a good time to check in and update our forecast,” says Realtor.com Chief Economist Danielle Hale. “We made a bold call that home prices wouldn’t go down in 2023, and with the latest data, we’re revising that projection.”

The big takeaway for the second half of the year is that, while home prices, mortgage interest rates, and rents will come down a little bit, most folks won’t see much—if any—relief. There won’t be any big price drops reminiscent of the Great Recession.

In fact, the average monthly mortgage payment* is about 15% more per month than it was a year ago.

“Home costs are still going to be higher for buyers in 2023 because home price declines are very mild and not universal,” says Hale. “Some areas are still seeing home prices going up and mortgage rates are still very high.”

For-sale home and rental prices are expected to dip

In a long-awaited, 180-degree turn for the housing market, home prices are expected to finally come down a little nationally.

Realtor.com is anticipating median home list prices will dip 0.6% in 2023 compared with 2022. Originally, we had anticipated that prices would rise 5.4%. (This is only for existing homes and doesn’t include new construction.)

Even a small decrease is a departure from years of steadily climbing prices. Last year, home prices shot up 10.2% year over year.

The declines are at least partly due to prices having fallen in the nation’s priciest real estate markets, such as in the West. Buyers simply couldn’t afford those price tags plus high mortgage rates, so something had to give. In the more affordable Midwest and Northeast, prices have steadied or even risen.

“We’re seeing more divergence between how local housing markets are doing,” says Hale. “In areas that are more affordable, we’re seeing more buyer interest, more sales, and more competition keeping prices high.”

Renters are also expected to get a bit of a reprieve. Monthly rental prices are anticipated to dip 0.9%, some welcome news for renters who have been hitting their financial limits after years of large rent hikes and high inflation squeezing their budgets, In addition, more apartments are coming online, easing the shortage of rental housing. Initially, Realtor.com had projected rents would rise 6.3% in 2023.

“Asking rents are expected to fall. [But] whether any particular tenant is going to find rents are lower depends on when they last moved,” says Hale. “Renters who stayed put and didn’t contend with the higher rents of the last few years might find their rent has some catch-up to do.”

Lower mortgage rates will help stimulate the housing market

Prices aren’t the only things headed south. Mortgage interest rates are expected to decrease to 6.1% by year’s end. Realtor.com had expected they would be around 7.1% by the end of 2023.

The U.S. Federal Reserve is expected to moderate the rate hikes that have caused mortgage rates to soar and, in turn, bludgeoned the housing market. Now that inflation is finally slowing, that’s taken some of the pressure off of the Fed to raise its rates.

The Fed has indicated there might be two more rate increases this year. Once the Fed’s rate increases are done, mortgage rates are poised to fall a little.

“It means affordability will start to improve, but not drastically,” says Hale.

Fewer homes are for sale

The Realtor.com economics team had predicted that the number of homes on the market would surge as homes took longer to sell to fewer buyers. However, that didn’t work out as expected.

Homeowners who scored ultralow mortgage rates over the past few years have been loath to list their homes and give up those rates. So they’ve stayed put, keeping inventory low.

“The lock-in effect has been stronger than we anticipated,” says Hale. “That’s going to improve gradually over time. The longer existing homeowners are in their homes, even if they have a low mortgage rate, the more likely it is their current home won’t meet their needs. They’ll also have more equity that will cushion the blow” of buying a new home with a higher mortgage rate.

Builders aren’t expected to put up enough new homes to get the nation out of its housing shortage either. Realtor.com foresees the number of new housing starts plummeting 19.6% this year compared with last as builders contend with fewer buyers and an environment where it’s harder to get credit to start new projects.

Overall, Realtor.com foresees the number of homes for sale dropping 5% this year.

That lack of inventory is also holding sales back. Even buyers who can afford today’s prices and mortgage rates are struggling to find something for sale.

Home sales are anticipated to fall 15.8% this year to about 4.2 million sales. That would be the fewest number of homes sold since 2012. It’s also more dire than early predictions of a 14.1% decline in sales.

“We have seen the bottom in existing-home sales,” says Hale. “It’s going to take a long time to improve off of that low.”

Learn more on Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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How to Create a Budget for Your Upcoming Bathroom Remodel

Remodeling your bathroom can be exciting, but it can also be expensive.

With so many choices and options to consider – from fixtures and finishes to materials and labor – it can be difficult to know where to start. One of the most important steps when planning a bathroom renovation is setting a budget. Creating a budget can help you prioritize your needs, prevent overspending, and ensure that you get the most bang for your buck. In this blog post, we will provide you with a comprehensive guide on how to create a budget for your upcoming bathroom remodel.

Establish Your Goals and Priorities

The first step for bathroom remodeling is identifying your goals and priorities. Before you start gathering quotes or picking out tile, consider what you want to achieve with your renovation. Do you need more storage? Do you want to upgrade your fixtures and finishes? Once you have established your goals and priorities, you can create a budget that reflects them.

Research the Cost of Materials and Labor

Once you have determined your goals and priorities, it’s time to research the cost of materials and labor. Start by making a list of the items you will need for your renovation, such as cabinets, countertops, flooring, lighting, and plumbing fixtures. Then, research the prices of these items and estimate how much labor will cost. Keep in mind that prices can vary depending on the quality of the materials you choose and where you live.

Set a Realistic Budget

After you have researched the cost of materials and labor, it’s time to set a budget. Be realistic about what you can afford and what you want to achieve. Remember that unexpected expenses may arise during your renovation, so it’s best to leave some wiggle room in your budget. A good rule of thumb is to set a budget that is 10-20% higher than your estimated costs.

Consider Financing Options

Depending on the scope of your bathroom renovation, you may need to consider financing options. Home equity loans, credit cards, and personal loans are all options to consider. Before you choose a financing option, be sure to read the terms and conditions carefully and understand the interest rates and fees.

Track Your Expenses

Once you have created a budget and started your renovation, it’s important to track your expenses. This will help you stay on track and avoid overspending. Keep track of your receipts, invoices, and payments in a spreadsheet or budgeting app. This will help you easily see how much you have spent and how much you have left in your budget.

Creating a budget for your upcoming bathroom remodel may seem daunting, but it’s an essential step in ensuring a successful renovation. By establishing your goals and priorities, researching the cost of materials and labor, setting a realistic budget, considering financing options, and tracking your expenses, you can create a budget that works for you and your renovation. Remember, a good budget is not only about saving money but also prioritizing your needs and getting the most out of your investment.

Keep reading.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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5 Tips to Transform Your Backyard Desert Landscape

Living in a desert or arid environment is challenging, especially when it comes to your backyard.

With a scorching sun and minimal rainfall, maintaining a beautiful outdoor area can be tricky. However, that does not mean that you can’t create a lush haven to relax in. This blog will outline five essential tips to transform your desert landscape, including one on stone landscaping that can help you maintain a gorgeous yard and make it an oasis for you and your family.

Choose the Right Plants
When it comes to plants, go for native ones. The plants that grow in the desert are adapted to the environment and require less water. Plants such as ocotillo, desert willow and Texas sage are excellent choices for your landscape. You can also add some desert-adapted ornamental grasses to add variety to your garden.

Install Irrigation Systems
Irrigation systems take the guesswork out of watering plants and ensure that they get enough water. In the desert, water preservation is essential, so consider installing a drip irrigation system. Drip irrigation systems deliver water directly to the plant's root, reduce water runoff and increase water efficiency.

Use Mulch to Retain Moisture
Mulch is your best friend in the desert. Mulch helps retain moisture in your soil and helps prevent soil erosion. It also helps regulate the soil temperature, keeping it cool in summer and preventing it from freezing in winter. Use mulch made of organic material, such as leaves, twigs and bark, which will decompose over time and improve the soil's fertility.

Incorporate Stones in Your Landscaping
Stones are a practical and stunning addition to any desert landscape. They come in many shapes, sizes and colors and are virtually maintenance-free. Using stones also helps reduce the area that needs watering, decreasing your water usage. Consider creating a pathway with large stones or adding a rock garden as a focal point to your yard. You may also want to work with experts like Mid Valley Rock to help your stone landscape design. 

Create Shade
The sun is relentless in the desert, and it's essential to create shade in your outdoor space. Plant some trees that can provide natural shade, such as mesquite, ironwood and palo verde. Alternatively, consider creating a pergola or a covered patio area to provide shade.

Creating a beautiful desert landscape requires careful planning and smart choices. With these five essential tips, you can transform your backyard into an oasis that not only looks stunning but is also sustainable and water-efficient. Remember to choose the right plants, install efficient irrigation systems, use mulch, incorporate stones in your landscaping and create shade. These tips will help you in maintaining your yard sustainably while still retaining its beauty. With a little care and effort, your desert landscape can become an enchanting haven that you and your family will cherish for years.

Get more like this on RISMedia.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Just Listed: A Renovated Residence with an Inviting Back Patio and Outdoor Oasis!

Nestled on a spacious lot, this beautifully renovated residence boasts three bedrooms, two bathrooms, and an inviting back patio, offering the perfect blend of comfort and outdoor living.

Upon entering the home, you will be welcomed by natural light and a floor plan that seamlessly connects the living room, dining area, and kitchen. The kitchen has been completely transformed with its stunning backsplash and granite countertops. A spacious pantry room connecting to the kitchen with a butchers countertop, which is prefect for a coffee station or extra storage. Step outside onto the expansive patio, where you'll discover an outdoor oasis designed for enjoyment and relaxation. The patio offers enough space for comfortable seating, dining areas, and even an outdoor kitchen or grill station. Whether you're seeking a tranquil sanctuary or a space to entertain and create lasting memories, this home provides the ideal backdrop for your dream lifestyle.

Listed by Monica Diaz for West + Main Homes. Please contact Monica for current pricing + availability.

 

Have questions?
West + Main Homes
(405) 652-6635
hello@westandmain.com

Presented by:
Monica Diaz
405-788-2489
monica@westandmainok.com

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