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Agents, did you know you can share a personalized version of this post?

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Jul
11

WOOP Your Goals Into Success

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Dr. Gabriele Oettingen, psychologist, researcher and author of the book “Rethinking Positive Thinking,” says we’ve been inundated with advice tothink positively or visualize success. While visualizing the achievement of our goals may feel good, those same feelings can also inhibit our motivation by giving us an emotional payoff before we ever actually do anything.

Oettingen recommends a more effective motivation technique called WOOP: Wish, Outcome, Obstacle, Plan. Here’s how it works:

STEP 1: Wish. First, create a meaningful, challenging and feasible goal, say, calling five clients a day, writing thank you notes or asking for more referrals. Write this down, or use the free WOOP app.

STEP 2: Outcome. Visualize the highest and best result or feeling you would receive from accomplishing your wish. Be comprehensive. Write this down, too.

STEP 3: Obstacle. Identify things preventing you from accomplishing your wish; it could be lack of information, lack of a skill set or even your own feelings. Identifying the obstacle is important because it helps your mind contrast your outcome feelings with your goal, helping contain emotion.

STEP 4: Plan. Using “if/then” statements, write an action plan for overcoming each obstacle: “If [obstacle], then I will [action to overcome obstacle].” This critical piece of the method asks you to focus on a specific plan and creates what researchers call “implementation intentions,” which have been found to give results vastly superior to other achievement-based methods.

Whether your goals are personal or professional, this technique can help you stay focused and remain motivated long enough to obtain real results.

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Reason #14 to Own | Keeping Current Matters

 

   

 

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Reasons to Own #8 | Keeping Current Matters

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Our guest blogger for today is Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. The HomeInsurance.com blog provides tips for consumers on a wide variety of topics ranging from home maintenance to insurance shopping. – The KCM Crew

Your credit score and your insurance payments- what’s the connection?

You’re likely not surprised when your loan officer asks for your social security number- a thorough credit check is standard when applying for a loan. However, many consumers are caught off-guard when a homeowners insurance agent asks for their social security number. It’s widely debated, but quite commonly practiced- for an insurance carrier to use a customer’s credit score to determine their insurance premiums.

What does your credit score really mean to your potential insurance carrier?

While many businesses will use a consumer’s credit score to determine eligibility for a line of credit or to discern whether a deposit should be held for an advance of services, insurance companies actually perform a different type of credit inquiry that they use for a very different reason.

A Soft Credit Check

First and foremost, it’s important to know that when an insurance company runs your credit they are actually performing what is called a soft credit check which accesses only your credit score and is not reflected as an inquiry on your credit report. As you probably can surmise, this is different from a hard credit check that a lender, for example, may run which does show up on your credit report as an inquiry. Since credit inquiries from hard credit checks can hurt your overall score it’s good to limit these types of credit checks when shopping for a mortgage, for example. However, since insurance carriers only perform a soft credit check you can feel free to shop for multiple insurance quotes without worrying about hurting your credit rating.

What they use it for

Here’s where a lot of confusion, and sometimes even frustration, can set in from a consumer’s perspective. Once an insurance company has your credit score, they use it (along with many other factors about you and your home, car, etc.) to assign you an insurance score. This insurance score reflects your potential risk to the insurer.

The insurance carrier then takes your risk potential and calculates your premiums. The more risk you pose, the higher your premiums will most likely be. This is where the real question comes in:

What does poor credit history have to do with my potential to file a claim?

If you’re asking this question, you’re not alone.

There is much debate over the use of credit scoring as a way to determine risk, and therefore assign rates to insurance consumers. However, insurance companies defend the practice saying that studies have shown a direct correlation between a person’s credit score and their likelihood to file a claim. Therefore, consumers with a lower credit score often pay higher rates for insurance.

Whether you agree with the practice or not, qualifying for better insurance premiums is just one other way that you can save money by keeping a good credit rating.

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