Though you can buy a house with bad credit, the process is a whole lot easier when your credit score is in good shape. And if you’re teetering between fair and good credit, it could mean a difference of thousands of dollars in interest over the life of your loan. (FROM HUFFPOST).
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So before you start your mortgage application, it’s a good idea to boost your score as much as possible. Fortunately, there are several ways to improve your credit score in a matter of weeks.

What credit score is needed for a mortgage?

The credit score you need to qualify for a mortgage depends on the type of loan you’re after. FHA loans, for example, only require a credit score of 500 to qualify, though you need to put down at least 10% as a down payment and pay private mortgage insurance. To put down just 3.5%, a credit score of 580 is required.

“FHA loans come with additional costs such as mortgage insurance premium, so you will want to make sure that even if you are approved for a loan it is still a wise decision,” said Brian Walsh, manager of financial planning at SoFi.

But for conventional mortgages, he said, the minimum credit score needed is in the mid-600s. An analysis of Credit Karma members shows the average credit score for first-time homebuyers in the U.S. is 684, though the number varies by location, according to Dana Marineau, vice president at Credit Karma.

Even so, that’s probably not good enough to qualify for the best interest rates. To get the best loan terms, you’ll likely need a score of 720 or better.

Ways to increase your credit score quickly

So what can you do to bump up your score within a reasonable amount of time? Though building good credit takes years of maintaining good habits, there are a few things you can do to give your score a boost before applying for a mortgage.

1. Dispute credit report errors.

“You should start by getting a copy of your credit report and looking for any mistakes,” Walsh said. “There may be errors on your credit report that could negatively impact your score.” In fact, one report by the Federal Trade Commission found that one in five consumers had an error on at least one of their credit reports.

To review your credit reports for errors, start by visiting annualcreditreport.com. This is the only website that’s federally authorized to provide free credit reports. Look through each report for mistakes such as incorrect name or address, credit lines that don’t belong to you, duplicate entries, incorrect account status and other errors that could lead to a lower score.

Since each credit bureau collects and reports credit information independently, you’ll need to check all three reports. If you find a mistake, you’ll also need to dispute it with each bureau. Each one has a slightly different process for disputing errors, but instructions can easily be found on their websites.

2. Pay down some debt.

Once you’re sure that your credit reports are up-to-date and accurate, look for ways to reduce the amount of debt you owe.
One of the major deciding factors in applying for a mortgage is your debt-to-income ratio. This number measures how much of your monthly income goes toward paying back debts.

“If you can pay off a loan, that loan’s monthly payment goes away, improving your debt-to-income ratio,” said Justin Pritchard, a certified financial planner and owner of Approach Financial in Montrose, Colorado. “Lenders prefer that your total debt payments take up a relatively small portion of your total monthly income. Eliminating a payment may help you qualify for a loan.”

Most mortgage lenders require a back-end DTI (the total amount of income allocated toward debt, including your potential mortgage payment) of no more than 43%. So by paying down a credit card balance or paying off your car loan, you will immediately lower your DTI and increase your odds of approval.

And though DTI doesn’t directly affect your credit score, paying down outstanding debt does. That’s because “amounts owed,” also known as your credit utilization ratio, makes up 30% of your FICO score. The more of your available credit you borrow against, the more it can negatively affect your score. So again, by reducing how much debt you have to your name, you become a much more attractive borrower.

3. Ask for a credit limit increase.

In addition to paying down debt, another easy way to improve your score instantly is by getting a credit limit increase. While this won’t change your debt-to-income ratio, it will lower your credit utilization since your outstanding debt remains the same while your available credit increases.

Often, you can request an increase and get approved instantly through your card company’s website. Sometimes, however, you’ll need to call and ask.
Keep in mind that credit card issuers will sometimes run a credit check before granting a credit limit increase. Doing so results in a hard inquiry on your credit report, though just one inquiry will have a negligible impact. And if your credit has taken a hit since you first opened your credit card account, your issuer might actually lower your limit instead.

4. Get added as an authorized user.

Another way to instantly improve your credit is by piggybacking on someone else’s. If you have a family member or a close friend with excellent credit, you could ask them to add you as an authorized user on one of their credit cards.

When someone adds an authorized user to a credit card, that account’s information is reported on both people’s credit reports. If you’re added to an account with a long, clean history, it can bump your score a bit higher. The best part is, you don’t actually need to use the credit card or even know the card’s information. The primary account holder’s activity will automatically transfer to you, too.

Credit bureaus don’t give as much weight to authorized user status as they do primary cardholder status. Still, every little bit helps. Just keep in mind that you’ll need to share both the good and the bad of that account. If the primary holder misses a payment or maxes out the card, you’ll suffer the consequences as well.

5. Consider a credit-builder loan.

If you have limited experience with different types of credit, a credit-builder loan might help you diversify your credit mix — which accounts for 15% of your FICO score — and bump up your score a bit.

“These small loans, which are typically less than $1,000, aren’t really loans at all ― at least not in the traditional sense,” said Marineau, the vice president at Credit Karma. “The financial institution deposits the loan amount into a locked savings account you can’t access, and over the next six to 24 months, you pay off the loan just as you would with any other loan. Once the loan is fully paid off, the accumulated money is returned to you in total.” 

If you’re worried about adding another credit inquiry to your reports, the good news is that many lenders offering these loans (typically credit unions) don’t require a traditional credit check to qualify. Instead, they might evaluate your banking history through the consumer reporting agency ChexSystems, according to Experian.

6. Request a rapid rescore.

Once you’ve done all the hard work of cleaning up your credit, you’ll want your credit scores to reflect that. That’s where rapid rescoring can help.

“You might be able to use rapid rescoring to get your credit reports updated quickly (within a week or so) and receive a more favorable score,” Pritchard said. This is much faster than the weeks or months it can take for credit changes to be reflected in your score normally. “Not every lender offers that, but if it’s available and it helps, go ahead and use it.”

Other tips to keep your credit in good shape

While you’re working to improve your credit before buying a house, there are a few mistakes you should avoid so your progress isn’t undone.

Don’t miss any payments: The single worst thing you can do for your credit is pay a bill late. Payment history makes up 35% of your FICO score ― the most heavily weighted factor.

Don’t apply for new credit: Until you’ve locked in your mortgage, avoid chasing attractive sign-up bonuses and rewards offers. If a lender sees several credit inquiries leading up to your mortgage application, it will be a red flag that you’re too reliant on credit.

Do your rate shopping over a two-week period: That said, you’ll need to shop around and get rate quotes from different mortgage lenders. Fortunately, credit bureaus recognize that rate shopping is a natural part of the mortgage process. “Just make sure you shop around within a short period of time, since inquiries made within a certain window are grouped together,” said Walsh, the financial planning manager at SoFi. “That window is between 14 and 45 days depending on the model used, so plan on shopping around within two weeks to be safe.”

Keep credit card balances as low as possible: Even if you plan to pay the entire balance when your bill comes, there’s a good chance your balance is reported to the credit bureaus mid-month, making it seem like you’re using a lot of credit. “Even if you pay off your credit cards every month, you need to keep your balances especially low when applying for a mortgage,” Pritchard said. “When they pull your credit, they get a snapshot of your account balances, and that might be from the day before you pay off your balance.” A good rule of thumb is to keep your balance below 30% of your credit limit, though the lower, the better. “If that means paying off your credit card every week while you’re in the application process, it’s probably worth it,” he said.

Don’t close accounts: It might seem counterintuitive, but you should avoid closing any revolving credit accounts like credit cards, even if you aren’t using them. Closing an account immediately reduces your available credit. If you have outstanding debt, this will cause your credit utilization ratio to jump up. Your best bet is to avoid making any major changes until you sign your mortgage contract.

WRITTEN BY CASEY BOND FOR HUFFINGTONPOST.COM

Home equity rises to the highest level since 2002. 

The value of all U.S. owner-occupied homes increased to a record $26.1 trillion in the first quarter, according to a Federal Reserve report released Thursday known as the Flow of Funds. (From www.HousingWire.com).

That was a gain of 4.3% from a year earlier, the slowest annualized increase since 2012. The collective value of U.S. homes is now 15% higher than the bubble peak reached in 2006. Once that bubble popped, it was a decade before values recovered to the same level.

As home values rose in the first quarter, so did homeowner equity, meaning the worth of a home compared to its mortgage. Americans owned 60.4% of their homes in the first quarter, the highest level of equity since 2002.

Mortgage rates have tumbled more than a percentage point in the last six months as the American economy showed signs of slowing and investors worried about the fallout from trade wars. The average U.S. rate for a 30-year fixed mortgage is 3.82% this week, the lowest since mid-2017, Freddie Mac said in a report on Thursday.

Lower mortgage rates support continued gains in home prices, because cheaper financing means people shopping for homes qualify for higher-balance mortgages and can bid more for properties they want. 

“Existing home sales have benefited from low mortgage rates and a healthy job market,” Freddie Mac said in its May forecast. “We expect stronger home sales and housing starts in the coming months.”

An increase in home equity traditionally has been a support to the U.S. economy as Americans either refinance their first-lien mortgages at higher balances, known as cash-out refis, or get home equity loans in a junior lien position. That supports consumer spending, which accounts for 70% of the U.S. economy. Cashed-out equity typically is used either for renovations, college tuition, or to pay off credit card debt, according to Fed economists.

Americans converted $19 billion of their home equity into cash in the first quarter, the largest amount since the year-earlier quarter when it was $22.7 billion, according to a Freddie Mac estimate. Most was through cash-out refis, at $16.7 billion, while home equity loans accounted for $2.3 billion.

Today’s level of equity cash-outs pales in comparison to the amount seen during the peak of the housing bubble. For example, in 2006’s first quarter, Americans turned $80.7 billion of equity into cash using either refis or home equity loans, according to Freddie Mac data. 

WRITTEN BY KATHLEEN HOWLEY FOR HOUSINGWIRE.COM

FROM MoneyTalkNews.com : Sales of existing homes in March 2019 were down 4.9% from the previous month, and all home sales were down 5.4% from a year ago, according to data from the National Association of Realtors. While parts of the Midwest and California still have plenty of strong real estate markets, it’s a different story in much of the Southeast.

So how do you make your house stand out in a crowd?
You could start by making sure your property has all the features homebuyers want most. For its 2019 What Home Buyers Really Want report, the National Association of Home Builders (NAHB) surveyed recent and prospective homebuyers to pinpoint features they deemed essential or desirable.

Based upon their report, here are the top 10 features that many homebuyers want to see at your open house, from good features to those most desirable of all.

10. Energy Star certification

Buyers who want it: 81%

The Energy Star Residential New Construction Program certifies that a home or an apartment meets updated energy efficiency standards. Homebuyers are willing to pay an extra $8,728, on average, for a home that saves them $1,000 a year in utility bills, according to the NAHB report. In fact, more than a third of those surveyed said they’d spend more than $10,000 for those energy savings.

If you have an older home to sell, making it more energy efficient, even without certification, may help encourage a faster sale. Most (69%) of the 6,000 real estate agents surveyed recently by the National Association of Realtors said that promoting a home’s energy efficiency features in its listing is very or somewhat valuable.

9. Double kitchen sink

Buyers who want it: 81%

If you think dishwashers have made double kitchen sinks a thing of the past, think again.
There are plenty of benefits to a double sink, including easier meal prep, better access to garbage disposals and convenient hand washing of items that don’t go into a dishwasher.Those may be some of the reasons why 81% of homebuyers told the NAHB researchers that a double kitchen sink was either “essential” or “desirable.”

8. Hardwood floors

Buyers who want it: 83%

Plenty of vinyl and laminate flooring options replicate hardwood, but most homebuyers want the real thing. Hardwood flooring has a reputation for being durable and environmentally friendly as well as for maintaining value.
Other surveys underscore the desirability of hardwood flooring in a home purchase:

• Real estate agents say homes with wood floors sell faster and for up to 10% more, according to the National Wood Flooring Association.
• Realtors believe homeowners who refinish hardwood floors recoup 100% of the cost when they sell and those who install new wood flooring recover 91% of the expense, says the 2017 Remodeling Impact Report from the National Association of Realtors
  

7. Walk-in pantry

Buyers who want it: 83%

A solid majority of homebuyers say a walk-in pantry is either “desirable” or a “must-have” feature.
If you can swing the cost, find space to build one into your home before listing it. Buyers may reward you.

6. Exterior lighting

Buyers who want it: 85%

Good exterior lighting is high on homebuyers’ lists of desires. It serves many functions. For example, it can:

• Enhance the landscaping around a home.
• Create an inviting atmosphere.
• Promote safety.

5. Garage storage

Buyers who want it: 85%

If you don’t already have a storage system installed in your garage, you may want to give it some thought before placing the home on the market.
Nearly half of homebuyers surveyed by the NAHB called garage storage “desirable,” and 36% declared it “essential.”

4. Energy Star rated appliances

Buyers who want it: 86%

Energy Star rated appliances should add to a home’s attractiveness in the market, the NAHB survey findings suggest.

By installing these highly efficient appliances, not only would you enjoy energy savings now, but the investment may help a home sell faster when listed.

Energy Star appliances are the most cited must-have green feature on the list, with 40% of survey respondents telling the NAHB that Energy Star rated appliances are “essential” and 46% of respondents calling them “desirable.”

3. Patio

2. Energy Star rated windows

1. Laundry room

 Written by Maryalene LaPonsie for MoneyTalkNews.com

FROM BUSINESS INSIDER: If you’re looking to sell your home, you probably want to do everything you can to sell it at the best price possible.
Business Insider asked real-estate agents about the easiest ways to increase a home’s value. Several of them said getting rid of clutter is the easiest way to spruce up your home, while others advised upgrading your light fixtures, removing rugs and carpeting, and replacing your bedding with a simple white duvet.

Here are 13 easy things you can do that will increase the value of your home, according to real-estate agents.

1. Get rid of clutter.

Several real-estate agents said getting rid of clutter is the easiest way to spruce up your home

“The simplest and least expensive thing that you can do is rid your home of clutter,” Deborah Ribner of Warburg Realty told Business Insider. “A buyer needs to be able to envision their things in your home, and when a home is too cluttered … it’s hard for them to do that. Think bare minimum.”

Ribner recommends clearing off bookshelves, coffee tables, kitchen counters, and dishes and beds for pets. You should “think of your home as being as much of a blank canvas for buyers,” she said.

Rachel Lustbader of Warburg Realty suggested getting rid of old, worn furniture as well.

“Buyers want to see the future in their new home, not the past,” she said.

2. Put away family photos.

Several agents recommended putting away your family photos when you’re trying to sell your house.

“Remove all family photos, children’s artwork on the refrigerator, and declutter,” Julie Brannan of Compass said. “You want them to superimpose their own circumstances on the home, not look at yours.”

3. Switch out your cabinets and appliances instead of redoing the whole kitchen.

“If your kitchen is dated and appliances are worn out but you don’t want to redo the whole kitchen, consider a cabinet refacing and change out the appliances,” Christopher Totaro of Warburg Realty told Business Insider. “It’s a plug-and-play upgrade. It’s as easy as calling your local home-center to schedule a consultation.”

He added that it’s possible to add a new countertop without replacing the cabinets.

4. Deep clean your home.

It may sound like a no-brainer, but making every nook and cranny of your home sparkle can work wonders, according to Robin Kencel of Compass.

“The number one game changer that costs nothing but a seller’s time and elbow grease is a top–to-bottom clean-out of closets, pantries, playrooms and other rooms that tend towards accumulation,” Kencel told Business Insider. “You are selling space — be sure the buyer doesn’t have to work too hard to find it.”

5. Upgrade your light fixtures.

Eric Mendelsohn of Warburg Realty told Business Insider that upgrading your home’s lighting will “reveal the best features and unique assets.”

And putting in brighter, cooler light bulbs can seem more modern, according to Ribner of Warburg.  

“If you don’t have it in your budget to upgrade or renovate your bathrooms, then at least make some little improvements like updating hardware, changing light switch plates around light switches and around outlets and even think about changing out those old yellow-light emitting bulbs for some brighter and cooler ones,” she said.

6. Add a fresh coat of paint.

“A fresh coat of paint makes a home feel like new, even when it isn’t,” Ribner said. “When a buyer sees paint chipping, and cracks in the paint, it can be a turn off to a potential buyer as well as an invitation to look for other imperfections. Also, 10 years ago, the color yellow might have been all the rage but now when a buyer sees a yellow living room, it screams out that it’s dated.”

Domingo Perez Jr. of Warburg Realty recommends a two-tone effect, “where the ceiling, crown moldings and a few inches below are all white and the remaining walls a shade darker. The effect screams ‘rich,’” he said.

7. Get rid of rugs and shine up your floors.

“Remove those area rugs and treat your floors to a sand, stain, and buff job,” Perez Jr. said. “Your floors will look new and the comments you’ll get will be worth every penny.”

8. Swap out your door hinges.

“Everyone has contractor-grade doors and stainless steel hinges,” said Perez Jr. of Warburg Realty. “Set your house apart by installing solid wood doors and splurge on decorative hinges. They are like adding cufflinks to a shirt, everyone notices!”

9. In the bathroom, replace your toilet seat and touch up the grout.

 ”In the bathroom, a fresh toilet seat and repairing the grout in the tiles, floors, and tubs are relatively easy upgrades,” Mendelsohn said.

10. Spruce up the outside of your home.

 ”Make your home look pretty from the street — power wash your deck or your front porch and even the sidewalk in front of your home,” Ribner said. “Think about planting a few pretty colorful flowers outside around the front door. And don’t forget when you do that interior paint job to put a fresh coat on the outside of your door.”

11. Switch out your bedding for a simple white duvet.

 ”For your bedroom(s), for under $100 on Amazon, you can buy yourself a crisp white set of sheets and duvet or comforter,” Ribner said. “You may love your floral bed cover with the doves on it but there’s a good chance that whoever comes through your home to buy it will not. Rule of thumb, the simpler the better.”

12. Replace your kitchen counters.

One of the cheapest ways to increase your home’s value is by changing the kitchen countertops, Joshua Sloyer of Compass told Business Insider.

“There are many fabricators out there that can come in and put a white or light gray to give a more modern feel,” Sloyer said. “White countertops and glass backsplash make a big difference! Bonus: This is a great tip because these contractors are licensed and insured and typically do the same procedure day in and day out.”

13. Focus on your kitchen and bathroom.

“Kitchens and baths sell homes,” Perez Jr. said. “So if you’re up for a renovation, the return on this investment is high.

WRITTEN AND PUBLISHED IN BUSINESS INSIDER