Common credit myths about buying a home
REALTY
(ARA) - Whether your annual earnings range well into six figures or are on the more modest end of national salary averages, you know you'll probably need credit to buy a home. While you likely know how important credit is to your home-buying plans, you may not be aware of the truth behind some common credit myths.
Myth: If your bills are paid and you've never defaulted on a loan, mortgage or credit card bill, you don't need to worry about your credit report or credit score.
Truth: Many factors influence your credit score, and payment history is just one of them. When calculating your score, credit bureaus also consider length of credit history, types of credit used and ratio of credit available to credit used. Even if your payment history is good, scoring lower on one of the other factors could lower your overall credit score.
Myth: As long as you know your credit score, you don't need to look at your credit report before applying for a mortgage.
Truth: A lender will certainly look at your credit report, so you should know what's on it before they do. Errors may occur on a credit report, and if there are any negative marks on your credit history you'll want to know about them - and address them - before a lender asks.
Myth: Checking your credit score is a hassle, and it can't really help you manage your credit in the long run.
Truth: Websites like FreeCreditScore.com make it easy to check your credit score. Keep in mind that lenders use a variety of scores when evaluating credit worthiness, and the one you obtain online will vary from what a lender might see. Still, any score can be a valuable educational tool that helps you better understand how lenders view your credit. FreeCreditScore.com's Credit Score Center can help you understand how your score is calculated, which factors impact it and the best time to apply for credit.
Myth: If your credit is not perfect, you won't be able to get a mortgage.
Truth: Lenders are more strict than they've been in the past and a good credit score and report can certainly make you a more appealing prospect to them. However, a score in the lower range doesn't mean you can't get a mortgage at all. But a higher score is likely to net you more options - and better terms.
Myth: When you apply for a mortgage, the lender could share your personal information (including your credit score and history) with other companies.
Truth: The law limits how banks and other financial institutions can use your information and to whom they can disclose it. If you're not sure how a lender may use your information, ask. Depending on the situation, you may be able to limit disclosure of your information.
Home prices and interest rates are still low across the country, making it a good time to buy a house, real estate experts say. Knowing the truth behind some common credit myths - and understanding your own credit history and score - can help you take advantage of the many opportunities still available for home buyers.
Unlocking the online and mobile secrets to home buying and selling
Six technology tips to make your quest easier
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While online listings serve as the starting point for many house hunters, a recent survey from financial services provider USAA reports that about one in five respondents would use smartphones to take photos while looking for a home. About the same number say they've already used mobile Internet service to search for a home or mortgage information. Flavin expects searches to begin with mobile devices more often in coming years
Tools of the trade
If you're one of the 40 million Americans who typically move in a year, here are six technology trends in real estate, and ways you can use them to your benefit.
* Comprehensive online listings
With popular sites such as Realtor.com and Zillow.com, buyers can research homes for sale and sellers can advertise their listings to a national audience. One site, USAA's Home Circle, even offers rental listings for those who are not ready to buy a home. "Consumers have access to a picture of the market 24/7," says Flavin.
* Automated paperwork and cloud storage
E-signing, or electronic signature, on an iPad or smartphone, will soon become commonplace for mortgage and closing documents, predicts Brad Nix, a real estate broker in the Atlanta area and another 2010 Realtor Technology Spotlight Award winner. The U.S. lags behind other countries in e-signature use, but it will greatly improve commerce, says Stephen Ezell of the Information Technology & Innovation Foundation in Washington, D.C.
The rise in cloud computing - housing data off-site instead of in on-site hard drives - also will play a major role in real estate. "Tech-savvy real estate brokers and pros can help you create a virtual folder that gives all parties access to the sales contract, inspection report, appraisal, insurance documents and closing documents," says Nix.
* Mobile apps
"Buyers want real-time access to what's on the market based on where they've parked their car," says Nix. Smartphone apps do that now, but what's new is their growing use. And sellers benefit, too, attracting traffic not just with a "For Sale" sign, but with a mobile, media-rich listing that just might lure people down the street and across the threshold.
* Online videos
Videos help showcase homes and communities on an emotional level. "They sell more than just four walls," says Nix. "They sell a lifestyle." Video style can range from simple, man-on-the-street shots to a full-scale production.
* More data
"The key difference today is access to information," notes Ezell, who's selling his D.C.-area home with his wife, Lisa. Lisa recommends community blogs and sites such as Curbed.com for local insights. She still looks to agents, though, when online information is limited or inconsistent. In D.C., for instance, Ezell says buyers can only access property tax figures online back to 1998; if they're interested in a 20-year-old home, they're out of luck. Government agencies are working to digitize records and make online data more complete.
* Social media
Social media connects buyers with local residents, as it did for Sandee Payne, USAA's Home Circle spokesperson, when she moved to Killeen. She connected with a friend via social media to get the inside information. "The level of detail available through social media is only going to grow," says Flavin. "If you go to Netflix today, you can see the most popular movies in your local community." Similarly, community opinions and advice will influence future generations of homebuyers. Real estate agents are also experimenting with blogs, and some post listings on their business Facebook pages, where buyers and sellers can become fans - just another way to pass along or view listings.
Questions to ask your agent
Flavin believes it's essential for today's buyers and sellers to partner with tech-savvy real estate agents. He suggests asking your agent these questions:
* What's your mobile strategy for selling my home or helping me find one?
* Are you able to track website traffic to my listing?
* Are you able to promote my community and my property through video services?
* Can you help me navigate these new, technological tools?
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(ARA) - High-tech know-how can help you find a house or get rid of one.
"The last five years have seen a massive shift in consumer behavior, which has driven Realtors and other real estate professionals to embrace websites, social media and online videos," says Mark Flavin, director of information technology at Bay East Association of Realtors in Pleasanton, Calif., and winner of a 2010 Realtor Technology Spotlight Award.
