Real Estate Weekly May 5, 2023

HOW TO REPAIR YOUR CREDIT AND GET A BETTER MORTGAGE LOAN

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“HOMEBUYERS:

WHEN CAN YOU REFINANCE INTO A LOWER RATE?”

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CLASSIFIEDS

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that all dwellings advertised are available on an equal opportunity basis.

For further information call HUD Toll Free at 1-800-669-9777.

All Houses subject to prior changes without notice. Neither advertisers nor Skagit Publishing are responsible for any errors in the ad copy. Skagit Publishing reserves the right to refuse any advertising, which we deem unsuitable for our publication.

Unless otherwise noted, all photographs, artwork and ad designs printed are the sole property of Skagit Publishing and may not be duplicated or reprinted without express written permission.

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Real Estate Stat

0.9%

The median existing-home sales price dipped 0.9% from the previous year to $375,700.

Enjoy the pristine location of McCorkle Place & Del Mar Association member amenities. This newer one level 2,246sf home offers an open feel for ever y st yle of living Beautiful hardwood floors, large kitchen with eating island, vaulted ceilings & access to your deck from many rooms The spacious primar y bedroom delivers cozy fireplace, roomy en-suite including jetted tub/shower + t wo designated sinks & t wo large walk-in closets Second bedroom offers beautiful views and three-quar ter bath. Also, home boasts a large office with room for t wo desks Enjoy an expanded three car garage and lower level with separate entrance to enjoy large 595sf blank slate bonus space for shop, craft, storage/ workout room. A bonus to buyer, seller has paid all member assessments MLS #2051792 358290-1

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How to repair your credit and get a better mortgage loan

by Erik J. Martin

If you want to buy a house, chances are you’re going to need to borrow funds to pay for that transaction. Problem is, you may get charged a higher interest rate and fees or get turned down completely if you pursue a mortgage loan when you have poor credit.

Your credit rating is largely determined based on two important factors: Your credit score, represented by a numerical three-digit value ranging from 350 to 800, which indicates your creditworthiness; and your credit history, as reflected in your three credit reports provided by Equifax, Experian and Trans Union.

“Poor” credit is typically any credit score below 600. e higher your credit score, the

less risky you are perceived to be by a lender. Experts recommend aiming for a credit score of 720 or higher.

“Lenders use your credit score and other factors like your income, employment history, and debt-to-income ratio to determine whether you qualify for a mortgage loan and what interest rate and terms you will be offered,” says Jason Skinrood, a certified finance expert and loan officer. “A higher credit score typically indicates that you are a responsible borrower who is likely to make on-time payments, while a low credit score suggests you may be more likely to default on a loan.”

Just as a straight-A student is more likely to get into a top-tier college, a good credit score can help you qualify for a mortgage loan with better terms and rates.”

Case in point: Let’s say you are applying for a 30-year fixed-rate mortgage loan of $200,000. Your credit score is currently 620, which qualifies you for a 5.5% fixed interest rate. But if you can up your credit score to 720, you may be eligible for a 4.0% fixed interest rate.

and you would pay a total of $343,440 over the life of your loan.”

Lenders will also look closely at your credit reports to determine if you are a worthy borrower candidate.

“Your payment history, as reflected in your credit reports, isn’t just a real-time reflection of your finances. It provides a seven-year window into your past, as most negative credit reporting items have that long to appear on your reports,” notes Michael Bovee, founder of Consumer Recovery Network in Boise, Idaho.

means taking steps to improve your credit rating and credit score, which typically involves addressing any negative items on your credit report, such as missed payments or high levels of debt, and taking steps to establish a positive credit history,” Skinrood adds.

To repair your credit before applying for a mortgage loan, take the following steps:

can negatively impact your credit score and make it more difficult to qualify for a mortgage loan,” cautions Skinrood.

• Pay your bills punctually. Late payments can severely affect your credit score and show lenders that you might be a risky borrower.

Shekhtman, CEO/ founder

Alex

of LBC Mortgage, explains that your credit score “is like a report card for your financial responsibility.

“At an interest rate of 5.5%, your monthly mortgage payment would be $1,135, and you would pay a total of $408,600 over the life of your loan, not including taxes and other fees,” continues Skinrood. “But if you qualified for a 4.0% interest rate, your monthly mortgage payment would be $954,

It’s crucial to check your credit score and three free credit reports several months before you plan to apply for a mortgage loan so that you can work to fix your credit if necessary.

“Repairing your credit

• Access and review your three free credit reports at annualcreditreport. com. Check each report for omissions, errors, and fraudulent accounts and dispute any of these with each of the three credit bureaus.

• Pay down as much of your debt as possible, particularly credit card debt. “A high debt-to-income ratio

• Don’t close old credit accounts, even if you don’t use them. is can help improve your credit utilization ratio and demonstrate to lenders that you have a long credit history.

• Don’t open new lines of credit or credit accounts, which can detrimentally impact your credit score.

• Establish positive credit. If you lack a credit history, try applying for a secured credit card or becoming an authorized user on another person’s credit account.

Ways to lower your insurance premiums

Question:

With all the turmoil in the banking industry this year, will it now become harder to get a mortgage?

Answer:

e turmoil created by the failure of the Silicon Valley Bank and the Signature Bank has raised questions regarding the financial system and potential harm to depositors and borrowers.

At this writing, at least, the results are mixed. We have two banks that failed. If you are a depositor, then you at least qualify for FDIC insurance coverage.

According to the FDIC, “the standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.” You can check your coverage by going to the FDIC’s Electronic Deposit Insurance Estimator (EDIE).

e URL is: https://edie.fdic.gov/

If you have deposits not covered by the FDIC, then your money at these two institutions will be fully insured under the Federal Reserve’s newly created Bank Term Funding Program (BTFP).

e government is likely to step in and fully protect depositors if other banks fail. As Treasury Secretary Janet Yellen explained in March, “similar

actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

So far, so good. Despite scary headlines, all depositor money is available. ere have been no bank runs. e big question is what happens next. Will there be other bank failures? If so, will the system continue to protect borrowers, and how does this impact mortgage borrowers?

e financial system has generally done well. FDIC-insured institutions had a net income of $68.4 billion in the fourth quarter, almost a record amount. ere are roughly 4,700 FDIC member institutions and most seem to be sensibly operated. But, yes, the mortgage marketplace will feel a backlash from the bank failures.

First, mortgage lending has not been a great business of late. e pandemic and rising interest rates have raised costs and reduced loan origination volume. In the fourth quarter, according to the Mortgage Bankers Association, the typical loan produced a $2,812 loss.

Lenders are cautious because of operating results and now with the Fed’s .25% rate increase in March they have still another reason to be careful.

As Federal Reserve Jerome Powell said, we are likely to see “tighter credit conditions for households and

ASK OUR BROKER

By Peter G. Miller

businesses, which would in turn affect economic outcomes.”

Translation: Getting a mortgage is likely to be tougher in the coming year – tougher, but not impossible. Borrowers with good credit, solid savings and little debt will do best.

Second, while the Federal Reserve does not control mortgage rates, its effort to slow inflation by raising interest costs has made new mortgages less affordable. Weekly rates went from 3.22 percent at the start of 2022 to 6.6 percent in mid-March 2023, according to Freddie Mac. If you borrowed $300,000 over 30 years, the monthly cost for principal and interest went from $1,301 to $1,916. Affordability issues are forcing many potential home buyers from the market.

ird, if you own real estate and financed or refinanced when rates were in the 3 percent range or even lower, your housing costs might go up with a new home and a new mortgage. e result is that many people who might have moved are staying put, a reality that keeps supply down and home prices high.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

By Marilyn Kennedy Melia

Today’s buyers may love their home but hate their mortgage.

In the foreseeable future, rates may very well stay higher than the 3 to 4 percent loans that made home buying more affordable through much of 2020 to 2022, notes Doug Duncan, chief economist at mortgage agency Fannie Mae.

But rates may dip enough to make it advantageous for recent buyers to refinance that six-seven percent rate, say Duncan. He predicts just a one percent drop for owners’ current rate “will trigger significant refinancing.” Moreover, once the Federal Reserve inflation is under control, rates could likely settle in the 4.5 to 6 percent range.

To entice home buyers to borrow from them, some lending firms have begun advertising “no cost” refinance later on.

Right Time?

Should rates begin to fall, when should a homeowner pull the trigger – or should they wait for further declines?

No one knows exactly where rates will be next week, next month or beyond.

And, the rate a particular borrower is offered depends on his financial profile, with those with high credit scores or a large income relative to his mortgage payment and other debts earning the most competitive rates. Whether it’s worthwhile to refinance depends on your own instinct on when to jump in, informed by your monthly costs.

Cost/Savings Calculation

First, a homeowner needs a high degree of certainty that he won’t be moving soon. en, calculating the monthly savings from a lower mortgage rate to meet the costs of refinancing. For instance, if it costs $3000 to refinance, and the new loan saves $150 monthly, it will take 30 months for refinancing charges to be recouped.

However, refinancing can sometimes be counter-productive to your overall financial health, like when a borrower refinances into a bigger loan to receive “cash back,” notes Nadine Burns, CEO of A New Path Financial. And, look to see if a rate drop allows you to refinance into a shorter-term loan, swapping a thirty -year mortgage for a fifteen year, so that you can be mortgage-free earlier.

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Save

Jenn Eddleman REALTOR

Valley

Call/text: 360-333-4048

jenneddleman@ windermere.com

“Homebuyers: When Can You Refinance Into A Lower Rate?”

This 4 bed/ 3 bath, 3982 sq. ft. home is per fec tly situated on a shy acre offering exquisite one -level living in prime location with a spec tacular bay and mountain view Away from the hustle and bustle yet so incredibly close to ever ything! Easy access to Hw y 20 for travel West to Anacor tes, Deception Pass, and beyond; or travel East to I-5 for commuting (Nor th and South) or continue Eastward to the beautiful Nor th Cascades Recent upgrade of kitchen cabinets, decks on nor th, south, and west sides of the house, 3 car garage, expansive driveway parking, sauna, updated professional landscaping, sprinkler system, and garden space Near to beach, park, and Padilla Bay trails; great area for walking, jogging, and biking.

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MLS#2009122

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708-8294

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MLS#2050192

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(360)

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Danya Wolf (360) 708-8294

Danya Wolf (360) 708-8294

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Danya Wolf (360)