Claire LeBlanc - REALTY EXECUTIVES



Posted by Claire LeBlanc on 11/27/2019

Most homeowners would love to be able to pay off their mortgage early. However, few see it as a possibility when they take into account their earnings and other bills.

 There are, however, a few ways to pay down your mortgage earlier than planned. But first, let’s talk about when it makes sense to try and pay off your mortgage.

 When to consider paying off your mortgage early

If you recently got a promotion, have someone move in with you who contributes to paying the bills, or recently got a secondary form of income, you might want to consider making extra payments on your mortgage.

However, having extra money doesn’t always mean you should spend it immediately on your home loan.

First, consider if you have a large enough emergency savings fund. It might be tempting to try and throw any extra money at your mortgage as soon as possible, but there are other financial commitments you should plan for as well.

If you have kids who will be applying to college soon, remember that student aid takes into account their parents’ finances. If your children plan on applying to institutions with high tuition, then your equity will be counted against you.

Refinancing to pay your mortgage early

Refinancing your home loan is one option if you’re considering increasing the payments on your mortgage. If you can refinance a 30-year loan to a 15-year loan with a lower interest rate, you’ll save money in two ways--your lower interest rate and the fact that you’ll be accruing interest for less time.

There is a downside to refinancing. Once you refinance, you’re locked into your new payment amount. So, if your higher income isn’t dependable, it might not make sense to commit to a higher monthly payment that you aren’t sure you’re going to be able to keep paying.

There’s also the matter of refinancing costs. Just like the costs associated with signing on your mortgage, you’ll have to pay closing costs on refinancing. You’ll need to weigh the cost of refinancing against the amount you’ll save on interest over the term of your mortgage to see if it truly makes sense to go through the refinancing process.

Paying more on your current loan

Even if you aren’t sure that refinancing is the best option, there are other ways you can make payments on your mortgage to pay it off years sooner than your term length.

One of the common methods is to simply make thirteen payments each year instead of twelve. To do this, homeowners often use their tax returns or savings to make the thirteenth payment. Over a thirty year mortgage, this could save you over full two years of added interest.

A second option is to make two bi-weekly payments rather than one monthly payment. By making biweekly payments you have the ability to make 26 payments in a year. If you were to just make two payments per month then you would make 24 total payments. Over time, those two extra payments per year add up.




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Posted by Claire LeBlanc on 10/16/2019

Securing a mortgage can be quite challenging if you do not meet specific requirements and demands made by the lenders. But really, you can’t blame lenders or mortgage companies for setting up these rules. Most of these demands are made to ensure the borrower can repay a loan without too much of a problem.

Everyone has one or several bad habits that have affected them or will affect them one way or another. When it comes to securing mortgage though, some bad habits might interfere with that decision. These habits will cast a shadow over your profile, putting doubts in the mind of the lender. Bad habits like any of the ones listed below will affect your chances of securing a mortgage.

Gambling

Gambling is a terrible financial habit that could also be addictive. Betting away some of your money on rare occasions is not enough to affect your chances of securing a mortgage. Taking out credit or a short-term loan to finance your gambling habit, however, will affect your chances of obtaining a mortgage – your gambling habit might also make you default on your credit card repayment.  

Personal Debt

Having substantial private debt will most likely cast doubt on your mortgage request. Lenders would be skeptical about your ability to pay back a new loan. Before you go ahead and apply for a mortgage, pay off all outstanding debts and keep a clean savings profile.

Defaulting on payments

Having a history of defaulting on previous loan repayment will reduce your chances of getting a mortgage. Defaulting is the single worst thing you can do to yourself. Lenders would not want to provide a loan to an individual who has a bad habit of defaulting.

Exceeding Overdraft 

Another bad habit that will cast doubt in the minds of lenders is exceeding your overdraft limit. If you don’t have an arranged overdraft limit, contact your bank. If lenders go through your bank statement and find your account messed up irrespective of how much income Is in there, they would probably turn down your application for a mortgage.

Late Credit Payments 

Making a late payment on your credit card and other loans is an excellent way to dig your own grave when requesting for a mortgage. A single late payment can mess up your credit score and would remain on your credit history for as long as seven years. 

If you are guilty of any of these habits and intend to secure a mortgage, you need to have a clear record first before proceeding with your application for a loan. If you are worried about whether you will qualify for a mortgage, talk to your real estate agent about your options and use prequalification forms to determine your likely approval.





Posted by Claire LeBlanc on 8/8/2018

Buying a home is one of the more complicated purchases that you’ll make in your lifetime. It’s not something that you can just open your wallet, pull out a wad of cash and buy. There’s a warm-up period for a house hunt. You need to prepare before you even start the process of the purchase. There’s a lot of different things that you should do to ready yourself to buy a home. You’ll need to organize your finances, find a real estate agent and ready yourself. If you’re looking to buy a home in the near future, it’s time to get busy! 


Keep Your Credit Score In Check


Your credit score is so important for so many reasons. The highest your credit score can be is 850 and the lowest it can be is 300. You’ll get a really good interest rate on a home if your credit score is 740 or above. A lower interest rate can save you a lot of money over a year’s time. 

The good news is that you can spend time repairing your score. This will include paying down debt, asking for credit limits to be raised and correcting errors that may be on your credit report. You want to be sure that you’re using 30% or less of your total available credit. As always, if your bills are paid on time, it will help you to keep that score up. Also, stay away from opening new credit cards, as this can bring your score down due to frequent credit checks. 


Put Gifts To Good Use


Whenever you get a financial gift, whether it be for a wedding, a Christmas bonus, or a birthday gift, make sure that you save it for your home purchase. You’ll need quite a bit of capital between closing costs, fees and down payments. You’ll be glad you saved the money once you start the home buying process. You’ll also want to make sure that you have and emergency fund built up. You don’t want to buy a home without some sort of a financial cushion behind you. 


Research Real Estate Agents 


Your real estate agent will be your right hand person when it is time to buying a home. You’ll want to know that your agent is knowledgable and can help you in this big decision. Your real estate agent is the person who will help you reach your goals, and you want to feel comfortable with them. Ask for recommendations and do your research.  


Get Preapproved


Sellers love buyers who have been preapproved. This shows that they’re reliable and financially able to buy a home. A preapproval can be done a few months in advance of buying a home. It will take an in-depth look at your finances including:


  • Proof of mortgage or rent payments over the last year
  • W2 forms for the past 2 years
  • Paycheck stubs for the past 2 months
  • List of all debts including loans and court settlements
  • List of all assets including car titles, investment accounts and any other real estate you may own.


Buying a home is a big deal but with the right preparation, you’ll be on the road to success and ready to secure a home purchase.




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Posted by Claire LeBlanc on 3/14/2018

What do buying a house, opening a credit card, and getting approved for an auto loan have in common? They all depend on your credit score.

Building credit is a multifaceted undertaking. In a way, this is a good thing--you wouldn’t want lenders to base their opinions solely on one aspect of your financial history. The downside is that understanding just what makes up your credit score can be difficult.

To complicate matters further, there isn’t one standard method for scoring your credit, and different credit bureaus each use their own criteria.

In this article, we’re going to talk about some of the factors the major credit bureaus use to calculate your credit, and give you some ways you can boost your credit.

But first, let’s talk about some of the implications of having a good credit score.

Why credit matters

Typical credit scores range anywhere from 250 to 850. The three main reporting agencies (Equifax, TransUnion, and Experian). Most lenders use a combination of those scores that is reported by FICO.

Most credit reports will rank your category from “bad” to “excellent.” Here’s an example of what a credit ranking might look like:

  • Excellent: 750+

  • Good: 700 - 749

  • Fair: 650 - 659

  • Poor: 550 - 649

  • Bad: -550

U.S. legislation makes it possible for Americans to receive a free report of their credit score and to challenge and correct the score if it contains inaccuracies.

If you’re thinking about buying a house, opening a new line of credit, or taking out a loan of some kind, then the provider will likely run your credit score. Those providers are going to want to see a return on their investment, so they’ll charge interest.

If you have a high credit score, it tells the lenders that you are a low-risk investment, and therefore they can offer you a lower interest rate, saving you money in the long run.

Components of a credit score

There are five main factors that credit bureaus take into consideration when formulating your credit score. Not all of the factors are treated equally. Your ability to pay your bills on time, for example, is considered to be more important than the types of bills you have. Here’s a breakdown of the five components that make up a credit score:

  • 35% - Bill and loan payments

  • 30% - Current total amount of debt

  • 15% - Amount of time you’ve had credit (since you took out your first loan or opened your first credit card)

  • 10% - Types of credit (cards, loans, etc.)

  • 10 % - New credit inquiries

Quick tips for building credit

It takes time to build credit and improve your score. So, if you’re hoping to buy a home within the next few years, now is the time to start working on your credit. Here are some best practices for building credit:

  • Set up autopay for your bills to avoid late payments. Even if the service doesn’t offer autopay, you can likely set up recurring payments through your bank.

  • Settle outstanding debt. Avoiding debt that you can’t pay off will only hurt you more in the long run. Call your creditor and see if they offer debt relief programs. More likely than not they’d rather work with you to ensure they receive some repayment rather than none at all.

  • Start budgeting the right way. New budgeting software like Mint and “You Need a Budget” are easy to use and link up with your accounts. They’ll help you monitor your spending and start paying off debt.

  • Don’t open new lines of credit close to when you want to take out a loan. New credit inquiries can briefly lower your credit, especially if you make more than one. Viewing your free credit reports doesn’t count as an inquiry, so feel free to do that as often as needed to check your progress.

  • Get credit for bills you’re already paying. You can report your monthly rent payments, switch bills into your name that you contribute to, or take out a credit builder loan. All three will help you build rent without changing your spending habits.





Posted by Claire LeBlanc on 10/18/2017

Buy a house and you probably just made the largest purchase of your life, a decision that will impact you daily. Buy the right house and you can finally start to feel rooted, as if you found the place where you feel balanced and centered. You can make this house your own, hanging original art pieces and pictures on the walls and filling the space with furniture and knick knacks that showcase your remarkable personality, your amazing style.

Stop guessing how much house you can afford

If you let yourself develop your creative muscle, there’s a strong likelihood that you created those original art pieces yourself. Clearly, buying a house is about more than the base price of the house. It’s about stepping into new experiences. Allow those experiences to be rewarding, certainly financially stress free. But, that won’t happen like magic. It takes thought, action and understanding. You can do it.

You must know everything that you’ll be responsible to pay for before you buy a house. It could keep you out of foreclosure should you or your spouse get laid off. It could keep you from taking on debt that will put your finances in a gripping headlock. Specific fees that you may incur when you buy a house vary, depending on the lender. However, general fees and costs you can expect to be responsible for include:

  • Base price of the house (It’s easy to think that the base mortgage is all you’ll have to repay when you buy a house. But, although it’s the largest chunk of what goes into a mortgage, the base price or principal of a house is only one piece of the costs.)
  • Interest or adjustable rate mortgage (Adjustable interest rates may start lower, but they can shift upwards and put your mortgage out of reach. Research lenders. Make sure you’re not working with a predatory lender.)
  • Property taxes
  • Down payment (The bigger the down payment you can put on your new house, the better. It can lower your monthly mortgage payments significantly.)
  • Closing costs (Try to negotiate a deal that splits closing costs with sellers. You might even get a deal where house sellers pay all of the closing costs.)
  • Homeowner’s association fees
  • Mortgage insurance
  • Homeowners insurance (This is separate from the mortgage insurance. Homeowners insurance covers the costs of damages the house may incur during natural and human-made disasters. This insurance is similar to car insurance.)
  • House inspection fees

Eliminating mortgage fee surprises helps you enjoy your home

There is more than one way to become a homeowner. Options include rent-to-own, a newly built house and buying an old house that you restore. Housing communities also vary, giving you the chance to move into communal housing neighborhoods, single family homes, tiny houses, mobile homes and elegant Victorian houses. You could also make the land more a priority than your living space, especially if you aim to start a farm or another outdoor business.

Go with the housing option that best matches your personal needs. You’re probably going to be spending a lot of time in your new home. But, don’t just fall in love with your house. Set yourself up for financial success. Be aware of all costs that go into your mortgage before you buy a house. Also, understand additional costs that you are responsible for paying a lender that aren’t built into your monthly mortgage payments. Shop for and buy a house with your eyes wide open.




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