Dickson Realty Truckee Tahoe Newsletter December 2014 by Dickson Realty

Dickson Realty â&#x20AC;&#x201C; December 2014 Newsletter

News You Can Use Truckee | North Lake Tahoe

Dickson Realty’s December 2014 Newsletter Good Credit – and how to get it One of the main factors that will determine your loan rate is your credit score. Established credit is required to get a loan. If you have no credit score from lack of established credit, a lender will not give you a loan. If your score is low, your rate is affected negatively and it can cost you thousands and thousands of dollars over the life of a 30 year mortgage. If your score is below 600 or if you have had major as a previous foreclosure or short sale, a lender may not give you a loan. It is important to know if you have good credit scores prior to going house shopping or trying to refinance your loan. Below are some steps to establish credit and keep your credit scores high. If you want to buy a home, it is important to make sure you establish credit. If it is the first time you are establishing any credit we suggest going to your bank and getting a secure credit card such as MasterCard or Visa. The bank may have you secure the card with cash if they are concerned about your ability to repay. Lenders are usually looking for 2-4 credit lines (aka trade lines) minimum from well-known lenders (such as MC, Visa, American Express or large department stores) on your credit report. They want to see you have used credit and used it wisely prior to giving you a loan. How do they tell if you are using it wisely? Lenders look at a client’s credit score to determine rate. If you have used credit wisely and for a long time your credit scores will reflect that with high scores. The best rates are provided to those with scores of 740 or higher. Lower credit affects the rate negatively. If a 740 score would get you a 4% rate, then a 700 score may be .25% higher in rate, 680 score may offer .50% higher, and a 600 score may worsen your rate by a full percentage point. Below 600, a lender most likely will not offer you a loan at all. If you had a foreclosure or short sale, guidelines change often so you want to check with your lender to see if it is possible to get a loan given the time frame from the event. The Dickson Truckee Team 11836 Donner Pass Road | Truckee, CA 96161 | 800.541.4440

Dickson Realty’s December 2014 Newsletter Two best practices to show the lender that you are using credit wisely include showing a long term history of good credit, and keeping your current balances below 30% of the high balance limits. Establishing newer credit, such as when you go to a department store and they offer to start credit for you to give you 10% off can affect your score negatively. It’s a new credit line and there is no history of established payments. Having a card for 2 years or more is a positive. The next step is using it wisely. Use those cards to show that you know how to use but keep the balances below 30% of the high balance limit. If your limit is 10,000 then don’t carry a balance of over $3,000. As a lender we are always happy to help our client’s see what their credit scores are prior to them getting into contract on a house or in our annual reviews. We offer a complimentary report for our client’s. This allows us to help with any minor changes needed to assist in getting the best rates. If you have any questions on a home purchase or refinancing please give us a call. It’s important to keep in mind that you have to have established credit to get a loan. If you have no credit score you can’t get a loan. If you want a complementary analysis on your specific situation please call the Rice Conway Mortgage Team at 530-582-9992 or email us at Team@RiceConwayTeam.com