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Posted by Hillman Homes on 12/2/2019

Believe it or not, your credit score can make a world of difference as you get ready to search for your ideal house. If you have an excellent credit score, you likely will have no trouble obtaining home financing. On the other hand, if you have a bad credit score, you may struggle to get the financing you need to make your homeownership dream come true.

Ultimately, there are many reasons why you should try to boost your credit score before you purchase a home, and these include:

1. You can simplify the homebuying process.

Purchasing a home can be challenging, particularly for property buyers who fail to get pre-approved for financing. Luckily, if you request copies of your credit reports, you can find out your credit score and identify ways to improve it. Perhaps most important, you can explore ways to bolster your credit score before you submit a mortgage application and increase the likelihood that you can receive pre-approval for a mortgage.

It usually is a good idea to review your credit reports before you enter the housing market. You are entitled to a free copy of your credit report annually from each of the three reporting bureaus (Equifax, Experian and TransUnion). If you request a copy of your credit report from the three reporting bureaus, you can learn your credit score and plan accordingly.

2. You may qualify for a low interest rate on a mortgage.

An excellent credit score may help you get a low interest rate on a mortgage. Thus, if you have an excellent credit score, you may wind up reducing your monthly mortgage payments.

Of course, a low interest rate on a mortgage may allow you to invest in your home as well. If you use the money that you save on your mortgage to complete home improvements, you could upgrade your residence and increase its value over time.

3. You can select the right mortgage option based on your individual needs.

With an outstanding credit score, there likely will be no shortage of lenders that are willing to work with you. As such, you can review a broad range of mortgage options and choose one that matches your expectations.

If you need to improve your credit score, there's no need to worry. Typically, paying off outstanding debt will help you boost your credit score prior to buying a house.

Furthermore, if you receive a credit report and identify errors on it, contact the bureau that provided the report. This will enable you to make any corrections right away.

And if you need help as you get ready to pursue your dream house, don't hesitate to reach out to a real estate agent too. A real estate agent can put you in touch with the top lenders in your area and make it easy to obtain home financing. Plus, this housing market professional will enable you to evaluate residences in your preferred cities and towns and find one that you can enjoy for an extended period of time.




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Posted by Hillman Homes on 4/9/2018

If you have seen your latest credit score and feel like you’re less than financially fit, don’t fret. There’s plenty of reasons why people end up with bad credit. There’s also plenty of things that you can do to amend and work with your bad credit. 


The Factors


Mortgage lenders look at a variety of factors when it comes to your credit and determining if you’re ready for a home loan. These include:


  • Age of credit
  • Payment history
  • Amount of credit debt


If you have opened new accounts frequently or ran up credit card balances without paying them down, these behaviors could negatively affect your credit score. 


Changing Your Habits


Just changing one of these bad habits can help your credit score in a positive way. This also means that a bad credit score doesn’t equal not being able to get a home loan. Your home loan may just come at a higher price. 


What If You’re Turned Down For A Loan?


You can ask your lender why you’re unable to get a loan. Some possible reasons that you’re getting rejected:


  • Missed credit card payments
  • Failure to pay a loan
  • Bankruptcy
  • Overdue taxes
  • Seeking a loan outside of what you can afford
  • Legal judgements
  • Collection agencies


If you have defaulted on a loan, missed payments or filed for bankruptcy, chances are that you’ll have trouble securing a home loan. Other factors that can affect your credit score include negative legal judgements that have affected your credit, or having a collection agency after you. 


How To Fix It


If you have bad credit, it’s not the end of the world. It’s possible that lenders can give you a loan if your credit score isn’t too low. You could, however, face higher interest rates as a penalty for a low credit score. This is due to the fact that you’re more likely to default on a loan based on your risk factors. 


You can improve your credit score by:


Keeping existing accounts open

Refraining from opening new accounts

Trying not to approach too many lenders to find the right interest rate. Every time you get a credit check, it affects your score. 


Finding A Loan


Signs of bad credit can take awhile to disappear from your credit report. Sometimes, you have the opportunity to explain to lenders what these factors are in detail so you can secure the loan. There are even mortgage companies that assist you through the loan process to give you a boost in getting the loan.


FHA Loans


FHA loans are a great program option especially for people with bad credit. These loans offer low down payment options and have lower credit score standards. FHA loans have been helping people to secure their first homes since 1934.


If you have bad credit, the dream of home ownership is still possible. If you’re early in the process, get to work and keep that credit score up so that when you head out to apply for a loan, you’ll be able to secure it.         




Categories: Uncategorized  


Posted by Hillman Homes on 10/16/2017

If you’re hoping to buy a home in the near future there are several financial prerequisites that you should aim to meet. Ideally, you’ll want a sizable down payment, a verifiable income history, and a good credit score.

It takes time to build credit. For most people, it can be several months or even years before they see a double-digit change in their credit score. However, if you have a low credit score and want to give it a quick boost, there are ways you can make a big difference.

But first, why should you focus on your credit score?

Credit scores and mortgages

When you apply for a mortgage there are several factors that your lender will take into consideration. One of their top concerns will be your credit score. This score is like a snapshot of your financial reliability. It tells lenders how much risk is involved in lending to you.

As a result, lenders will increase your interest rate if you are high risk and lower it if you are lower risk. To be a low risk homeowner, you’ll want your score to be in the high range, (usually 700 or above).

Credit change potential

Depending on your financial history, it can be more difficult to raise your score in a shorter period of time. If you are young, don’t have a long credit history, or haven’t had many bills to pay in your lifetime, your score will be more malleable than someone who has had low credit for years due to late payments.

In the United States, you have to be eighteen to open up a credit card or take out a loan by yourself (this is different from getting a loan co-signed by a parent or guardian).  You can also ask your parents or guardians to add you as an authorized user of their credit cards. This will let you build credit without having to settle for the high interest rate credit cards you would be eligible for.

If you happen to have a low score (anywhere between 300 - 600), the good news is you can achieve a larger change over a shorter amount of time than someone who already has a high score.

So, how do you achieve that change?

Credit errors

One of the easiest ways to quickly improve your score is to check for errors in your credit report. You can get a free report each year from the three main credit bureaus--Equifax, TransUnion, and Experian.

Look out for bills that have been mistakenly put under your name and for collections that shouldn’t be on your account.

Avoid new credit

One thing that can do short-term harm to your credit score is opening or attempting to open new lines of credit. That can be a store card, a loan, or getting your credit checked by a lender.

If you want to build credit quickly, making several inquiries could land you with a lower score than where you started.

Pay your regular expenses with credit

A good way to gain credit points in a few months is to pick a monthly expense to use your credit card for. Pay off your full balance at the end of each billing cycle to earn the most points while avoiding building up too much interest.





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Posted by Hillman Homes on 11/24/2014

One of the biggest things that can impact your ability to get a loan for a home is your credit score. Credit scores measure the risk a lender may take when deciding on a mortgage. If your credit score is not where you want it to be have no fear it's never too late to become credit worthy. Your credit score is also known as your FICO (Fair Isaac Corporation) score, it is one of the tools that lenders use to evaluate a borrower's ability or likelihood to repay a loan. Credit scores range from 300 to 850 points. Credit scores over 720 are often considered excellent.  Scores of 680 – 719 are considered good. Scores that fall between 620-679 are questionable and typically require more review by the lender. A score under 619 usually disqualifies you from getting the best rates or even a loan at all. Here are five ways to raise your credit score: 1. Obtain your credit score from the three major credit score reporting agencies. They are Equifax, Experian and Transunion. 2. Review your report and look for any discrepancies. Your report will also give you a good idea of why your score may be low. According to myFICO.com, credit score calculation is based on five key components: payment history, amounts owed, length of credit history, new credit and types of credit used. 3. Come up with a plan to improve the five key components. Payment history carries the most weight it makes up 35% of your score. So be sure to pay your bills on time. 30% of your score is determined by the use of your available credit. Only use 30% of your maximum credit limit for each credit card and revolving accounts, using anything over that hurts your credit score. 4. If you have any past-due bills, judgments or collection accounts make arrangements to pay them as soon as possible. Some creditors may accept a portion of an amount due as payment in full. 5. Minimize your requests for new credit. Credit inquiries make up 10% of your score and can ultimately bring it down.





Posted by Hillman Homes on 10/13/2014

Did you know your credit score is always changing? Your credit score could be one number on one day and a different figure the next and even vary from one credit reporting agency to the next. Your credit score also known as your FICO score is based on the information contained in your credit record. Since your credit file is always changing so is your score. Your credit record changes every time a company you have credit with reports an on-time payment — or more important, a missed payment that's now more than 30 days late. Your score changes each time your credit card balance changes or you apply for new credit. There are three main credit reporting agencies; Experian, TransUnion and Equifax. Another factor that could affect your score is that not all lenders report to all agencies. To know your credit score you can pull a free credit report from all three agencies once a year. Look for missing or incorrect information. It is important to get that resolved as soon a possible. Click here for more information on obtaining a free credit report.