‘Tis the Season to not sabotage your credit

Several weeks before the holiday season sets in, we begin to see those commercials I absolute dread. You know, the luxury cars with giant red bows on them…the recipient gushes, “you shouldn’t have!”… and they’re right, the gift giver probably should not have – especially if they’re considering buying or refinancing a home.

It can be so exciting to give what we consider to be desirable presents to our loved ones – or even to splurge on ourselves. However, a new car or even that spendy exercise equipment that will help you obtain your goals for the new year, will impact your credit if you’re financing it and/or impact your debt to income ratios for qualifying.

A salesperson who says that your credit will just take a quick dip is probably on Santa’s naughty list. They are just interested in making a sale.

When you obtain a new debt, there will be a credit inquiry. How this impacts your score depends on how many inquiries have been made. Credit inquiries may stay on your credit record up to two years and you’ll have the opportunity to explain each individual inquiry to your mortgage lender, including whether or not new debt was obtained.

Credit scores are also impacted by new credit. New credit can be a significant ding. Credit scoring favors older, established credit. That new car or new financed whatever will lower your score for months.

Not only is it a new addition of debt to your credit record, it’s also showing as a debt at 100% of the debt limit – which is another whammo. Even if you put 50% down on a car, if the car loan is $40,000 and you owe $40,000, then it’s treated as a new debt with 100% of the credit limit balance. Ideally, you want to have your accounts at 30% or lower of the credit limit.

Let’s talk payments! Using rates last quoted by Freddie Mac, a $500 car payment may reduce your qualifying power by $108,000 in a mortgage. A $58 indoor bicycle payment is about $13,000 for a mortgage. By the way, it doesn’t matter if your new debt has zero interest or no payments due for a while – lenders still have to factor the payment.

It’s not only new debts that can set back your home buying (or refinancing) goals… overusing your credit cards can be damaging as well. Going over your credit limit, or using more than 50% of your credit limit can drop your scores. Of course having a late payment will also hurt your scores and may cause your transaction to be delayed.

Even if you’re not thinking of buying or refinancing a home, I encourage you to really consider what your spending for the holidays and try to keep it in check. It feels wonderful during the holidays to splurge however, the financial hang-over when the party is over simply isn’t worth it!

If you’re considering buying a home or refinancing your home located anywhere in Washington state, I’m happy to help you!

2020 FHA Loan Limits for homes in Washington State

Here is a complete list of FHA loan limits for all counties in Washington for 2020. The new loan limits go into effect on FHA case numbers issued January 1, 2020 and after. [Read more…]

Breaking News: 2020 Loan Limits Announced from HUD

HUD has released the FHA loan limits for 2020.

Seattle – King County, Tacoma – Pierce County and Everett – Snohomish County all have higher loan limits at $741,750 for a single family home.  Homes located in King, Snohomish and Pierce Counties qualify for a higher loan amount as the counties are considered “high cost”. 

FHA mortgage loans are not limited to first time home buyers and do not have income limits. Loan limits do vary by the county the home is located in. Here is a complete list of 2020 FHA loan limits for in Washington State.

If you’re interested in buying or refinancing a home located anywhere in Washington state, I’m happy to help!

 

 

Conforming Loan Limits for 2020 for Washington State

Conforming loan limits are increasing for 2020 to $510,400 for a single family dwelling. Counties that are considered “high cost” such as King County, Pierce County and Snohomish County qualify to have a “high balance conforming” loan limit of $741,750. [Read more…]

New Mortgage Programs!

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Special Mortgage Interest Rates

Last night on Facebook, I saw an ad for a builder’s lender promoting “limited time opportunity special interest rate” when you purchase one of their new homes. This was being shared by a Realtor whom I’m “Facebook Friends” with. I decided to price out this “special rate” and proved that the rate, while very low, is actually not so special.

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Boost Your Credit Score or Boost Your Spam?

Experian, one of the big 3 credit bureaus, has been actively promoting that consumers can “boost” their credit score using their services. Since I help people with their credit and mortgage needs for my profession, this naturally got my attention.

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Mortgage Interest Rates at Historic Lows

Freddie Mac released their weekly mortgage interest rate survey showing that mortgage rates have continued to trend lower.

Tomorrow we have the Jobs Report being released which tends to impact the direction of mortgage rates as it’s an indicator of inflation. Inflation is the “arch enemy” to bonds, like mortgage backed securites, and therefore tends to drive mortgage rates higher. Stay tuned!

Freddie’s PMMS is based on an average of mortgage rates from last week‘s applications for purchases with 20 percent down with excellent credit. Being the rates shared in this report are from last week, they are technically “expired” as mortgage rates change constantly – sometimes several times a day…especially in volatile markets. The PMMS is a great tool for seeing trends and where mortgage rates have been. It’s not a good tool for where rates are “right now”.

If you would like to know where mortgage rates are right now based on your personal scenario for a refi or purchase for homes located anywhere in Washington state, I’m happy to help you!