Use These Steps to Raise Your Credit Score and Get a LOWER Interest Rate on Your Mortgage.

Pay Off  YOUR Debt,  NOW!

The only way to raise a credit score is to pay off your debt or at least reduce it to an acceptable level! I recommend paying off high interest rate  credit card debt first.They can suck the life out of your finances! As for those, "magic cure" credit repair commercials you hear and see promising a quick fix, their scam is even greater than high interest rate scam your credit card company is charging you!


What steps do you need to take to build your credit score to the highest level possible? How can you secure a mortgage with a lower interest rate? Use my common sense guidelines provided below to get rid of the debts that have reeked havoc on your chances for a lower-interest mortgage on your dream home.

1.) Pay Your Bills on Time – All the Time!
I know, I know – this isn’t always easy. But, lenders of all kinds look for reliability on your part. Since loaning money is a risk for them, they look for signs that you have a reliable income and the discipline to pay your bills over time. When they see those signs, they say to themselves, “Hmmm, this person looks like a good risk to me; therefore, he or she deserves a lower interest rate.”

2.)  Do Not – I Repeat! – Do Not Open Unnecessary Credit Cards!
People sometimes open credit card accounts in order to increase their available credit. Absolutely avoid this temptation! It’s simply too darned easy to charge for items you don’t really need, and, before you know it, you’re back in debt or have increased it to an unreasonable degree.

3.) Budget, Budget, Budget!
Financially, this is possibly the most “unsexy” task there is, and yet it’s the most vital and important one you can possibly undertake! YOU need to figure out where you stand financially. Budgeting will allow you to get rid of debt, improve your credit score, and shape a low interest rate financial future for you!

4.) How Much Debt is Too Much?
Here’s the first question to ask yourself in terms of budgeting: How much debt is too much?
Actually, there’s a standard financial formula that allows you to answer that question. This formula is called the debt to income ratio, and what it does is measure your net monthly income against your debt.

Here’s an example:
"George” has a net monthly income of $2000 and his monthly debt payments are $500.
So, to get his debt-to-income ratio, George divides $500 by $2000 and gets this ratio:
500÷2000 =.25 (25%)
  
Is this a good ratio?
Well, financial experts generally agree that debt expenses should be 25% or less of your income. George’s ratio is reasonable but could be better.So, what’s the ratio of your debt to your income? Figure that out by taking the next step.

5.) Calculate Your Debt-to-Income Ratio
You can answer that question by completing the following tasks:

Task 1: Analyze your bills from the last month. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

Task 2: Review your credit card bills and add up the minimum payments owed on each card.

Task 3: Figure out your monthly take-home pay (net salary).

Task 4: Divide your monthly fixed expenses by your monthly income to get your debt-to-income ratio.

What percentage did you get? If it’s 25% or greater, then it’s definitely time to budget in order to reduce or eliminate your debt.

 I’d be happy to discuss some more in-depth  budgeting tips and provide you with information on mortgages at the same time! Go to (insert link) right now so we can get together and have an interest friendly financial chat!

You're Invited to Tour My Omaha, NE Re/MAX Office & Meet My Exceptional Staff!

It's time for a special break from my real estate education articles - let's take you on a tour of my office! We're located on 98th and Giles in Omaha, NE, so when we're working together on your next home, you'll meet my exceptional team that will help you get the deal done!

Sue and Missy are my assistants that take care of your listings and closing contract, while I focus on negotiating with the seller to get you the absolute best deal. Karen and Rhonda are my buyers specialists who will find your perfect home here in Omaha and walk you through all the steps so you make a decision that's right for you.

So, if you know anyone who is looking to make a decision in real estate within the next six months, send them over to my team - we'll take excellent care of them!

Why You Should Hire "Sherlock Holmes" To Increase The Value of Your Home

No, you don't need the fictional detective inspector. However, you do need a home inspector!

Think of this as a "pre-emptive strike" to maintain or increase your home's value before you put it on the market. Here are the benefits an inspector provides you:

Benefit 1: The inspector can uncover any problems that need fixing, and you can correct them before any potential buyers enter your home. Such an inspection can prevent your sale from falling through!

Benefit 2: With an inspection, you can show prospective buyers receipts to prove the work has been done. Buyers love proof! In reality and in their eyes, it underpins the value of your home and the asking price.

Benefit 3: You may be able to factor the cost of the inspection into the asking price for your home!

Benefit 4: When you have a presale home inspection completed, you're able to estimate if the discount the prospective buyer is asking is reasonable. In other words, you can refuse unreasonably low offers if you know the value of your house, including the degree of its defects.

So, How Do I Find a Qualified Home Inspector?


I can recommend a certified home inspector who will do a great job for you. However, if you decide you want to do it on your own, make sure he or she is qualified!

Con artists sometimes pose as home inspectors, taking your money and giving you nothing but grief in return. Here's how to know if an inspector is the real deal:

    * Ask your friends for referrals. If they've had a good experience, go with that home inspector.

    * I’d recommend you interview a minimum of two or three inspectors before choosing one. Make sure they’re full-time professionals conducting several inspections a year.

    * If possible, select a home inspector who’s a member of The American Society of Home Inspectors (http://www.ashi.org/) or the National Association of Home Inspectors http://www.nahi.org/. These association members follow a stated code of ethics. In addition, they’re prohibited from having a professional interest in the sale, repair or maintenance of a property they inspect. They’re also forbidden from using their inspection business as a way to find customers for a handyman service that they “happen” to own. You may want to go on the Internet and use ASHI’s “Find a Home Inspector” link to identify potential candidates in our locality. 

    * As part of the interview process ask for samples of comprehensive reports (about 20-50 pages in length). The samples should be painstakingly done and backed up with complete details, including photos and diagrams. If an "inspector" refuses to give you a report or provides only a sloppily written 2-to-5 page sample, run the other way!

What Does a Home Inspector Cost?

Frankly, the rates vary. On a national level, the rates fall in the range of $200 to $400.

As part of the interview process, I recommend you ask several inspectors for their rates so you can get an idea of the price range.

In the end, keep in mind that while the cost of an inspection may seem high, it can actually add several thousand dollars to the value of your home! So, don't think of it as a cost; think of it as an investment!

What Exactly Does a Home Inspector Evaluate?

In general, he or she will look at the following areas:

Energy Conservation/Safety Items
Electrical System Wiring, Service Panel, Devices, and Service Capacity
Exterior Walls, Siding, Trim
Floor, Wall, Ceiling, Roof Structures
Foundation, Footings, Crawl Space, Basements, Sub-flooring, Decks
Gutters, Downspouts
Heating & Cooling Systems
Insulation & Ventilation
Interior Floors, Walls, Ceilings
Moisture Intrusion/Mold
Overall Structural Integrity
Plumbing Systems, (fixtures, supply lines, drains, water heating devices, etc.)
Property Drainage/Landscaping
Roof, Roof Shingles, Chimneys, Attic
Walks and Drives
Windows, Doors, Cabinets, Counters, etc.

Should I Be Present During a Home Inspection?

You bet! A typical inspection takes three hours or more, so I recommend that you be present for at least the first 30 minutes to make sure the job is being done thoroughly.

At the end of the inspection, the home inspector should give you a point-by-point summary of what needs to be corrected in order to add value to your home!

Hope you enjoyed this information! If you have more questions, contact me at 402.598.3965 or email peg@maloney.com!

What Determines the Value of Your Home?

What Determines the Value of Your Home?

Basically, a home's worth is determined by its market value. How is "market value" determined? Most often, it's figured by a comparison ("comp") with homes similar to yours in the surrounding area.

So, if the homes in your neighborhood average, say, $250,000, then it's likely that the value of your property will fall in the same range.

But market value is also determined by a number of factors including the following:

External Factors

There can be several external factors influencing the value of your home. One is "curb appeal", or the first impression your property makes upon prospective buyers. A home that's in excellent condition on the outside will make a great first impression; a home in poor repair instantly loses its appeal to buyers. Other factors can include lot size, popularity of an architectural style of property, water/sewage systems, paved roads, sidewalks, etc.

Internal Factors

The condition of a home's interior also has a huge influence on prospective buyers.

When you've demonstrated "pride of ownership" and kept up the maintenance (quality paint, trim, molding, etc.), a buyer's interest will immediately perk up for the simple reason that they know your care and concern will result in less cost and maintenance for them.

Other internal factors include construction quality, condition of appliances, size and number of rooms, heating/cooling type, energy efficiency, etc.

Supply and Demand

"Supply and demand" simply refers to the number of homes for sale versus the number of buyers.

When there are more homes than there are buyers, prices tend to be lower. When there are a lot of buyers chasing few homes, then prices tend to rise. In effect, supply and demand affects how quickly your home will sell

Location 

More than likely, you already know the old saying, "There are three main factors in real estate - location, location, location."

While that's not the whole story, desirability is a big factor for home buyers. They may want to live in particular school district known for its education excellence…a great and safe neighborhood with rising property values…etc.

But I Know My Home Is More Valuable Than a Lot of Comparable Homes in My Neighborhood? Aren't Allowances Made for This?

Definitely! Sometimes, it can be difficult to find homes exactly comparable to your own. So, dollar adjustments are made for the differences between your home and comparable properties

Where Do I Find Sales Comparison Information?

The easiest source to access is your realtor. After all, it's his or business to know such information

But, there are also other sources you can tap into in order to get a complete picture of your home's value in comparison to others in your neighborhood. Here's an overview of them:

1. The Local Assessor's Office

It's very likely that your local assessor will be able to provide the sales history of a particular house, neighborhood, or style of architecture. Many assessors also provide lists of recent sales which you can browse and compare to the assessment roll.

Today, many municipalities provide local sales and assessment information online making it very easy to access. Check with your local government agency to find out if they provide this service.

2. Online Private Companies

You can search for these companies using the Google search engine and the keywords "comparable home sales" or "comparable sales." Some companies offer free information; others charge a nominal fee.

If you wish to get more specific, you can Google "real estate database" and type in the name of your particular state to get additional property information

3. Your Local Newspaper

It's likely that your local newspaper is a great source of specific real estate information. Look for quarterly sales reports in the real estate or business sections

The Key to Getting the Price You Want (or Close To It) for Your Home

The key to getting the best value is finding and matching the right buyer to your home. And that's the job of the realtor!

He or she should work hard to qualify those buyers upfront so the right people are viewing your property!

In other words, the realtor should weed out "lookers" and other unsuitable buyers as a first step in working with you.

See how I do that for you by sending me an email to peg@maloney.com

How Do Credit Reporting Companies Determine My FICO Credit Score?

They have a formula by which they calculate the score of each individual. It’s designed to give them an objective (mostly) method to predict how likely it is that you’ll repay a new loan.

Often, a credit score is referred to as a “FICO” score. Where did this term come from?

From two men named Fair and Isaac! In the mid-1950s, they founded a company called Fair Isaac Corporation. Over the ensuing years, the name got shortened to “FICO.”

Fair, Isaac is a for-profit company, traded on the New York Stock Exchange (NYSE: FI). Their exact formula for calculating credit scores is termed “proprietary;” that is, it’s secret.

Each of the major American credit reporting agencies (CRAs) has a relationship with Fair Isaac. The “Big Three” CRAs are: Experian, Equifax, and Transunion. You can find them easily on the Internet.

In a common-sense world, each CRA would have the same credit score for each person. So, why don’t they? Because they each have different formulas for determining your credit score! That means your score may vary from one CRA to the other!

Each CRA formula is based on experience with millions of consumers. With each credit rating company, the higher your score, the better your credit is rated.

Now, above, I said that the credit formulas are secret. And they are, but we can sketch the general elements of those formulas. So, for example, we know that FICO models analyze these items in your history:

* Past delinquencies
* Derogatory payment behavior
* Current debt level
* Length of credit history
* Types of credit
* Number of inquiries by lenders and others into credit history.

Although the models vary as I stated earlier, the general formula looks like this:

* 35 percent on a borrower's payment history.
* 30 percent on debt.
* 15 percent on how long the applicant has had credit.
* 10 percent on new credit
* Another 10 percent on types of credit.

What Is the Range of FICO Scores?

Keep in mind that the following ranges sometimes change or vary with a particular source.

In general, however, the higher the score, the better your credit rating is, as stated earlier.

At the top end of the range is the perfect score of 850. As you can guess, very few, very rich people achieve this kind of perfection (only 1% of the U.S. population)! They get the lowest and best interest rates and get their loans fast. And why not? From a lender’s point of view, they’re an extremely low risk!

Eleven percent (11%) of the American population has a score of 800. That means they’ll also get lower interest rates and have their loans closed within days (just not as fast as the “perfect people” above).

So, what’s the score of the average American? 720! The interest rate for these individuals will be higher than the two categories above, and it might take days or weeks to close the loan, depending on the market.

It’s when your FICO score gets below approximately the 620 mark that you’re going to have to work harder to get mortgage money from a lender.

Here’s why: With that score, they calculate that borrowers will default on that loan better than half the time! From their viewpoint, it doesn’t make very good business sense to lend money in such situations.

However if they do loan the money, it will carry a higher interest rate to cover the added risk. Of course, in this situations, lenders look very closely at a borrower’s financial history in order to determine whether or not there are any “red flags;” that is, missed payments, late payments, unpaid debts, bankruptcies, etc.

So, there you have it! Now you know how your credit score is calculated. I hope I’ve taken the mystery out of the whole process. If not, contact me today at 402.598.3965 or peg@maloney.com, and I’d be happy to answer your questions about credit and/or mortgages!

Why Use the Services of a Real Estate Agent?

"Why Should I Hire A Realtor?"

This question is often asked, especially by homeowners who consider selling their homes by themselves.

The fundamental first answer to this question is that an experienced Realtor is an expert at what he or she does. Through hard work and education, they’ve acquired a set of skills that make the process of home buying and selling a lot easier than it would be by doing it yourself. So, what are the skills in the set I’m talking about?

Well, for one thing, we have the skill of being the go-between. We’re the people who handle people and calls and separate the “wheat” (real buyers) from the “chaff” (non-buyers) without you ever having to deal with such situations. In Internet terms, we make sure you’re not “spammed” with worthless offers and target real deals for you.

We’re also the ones who save you a lot of time by making sure you’re looking at appropriate properties and neighborhoods right from the get-go.

And, speaking of neighborhoods, an experienced Realtor will know them inside-out or will know how to find the latest information on them.

That means he or she can get you into neighborhoods where the crime rate is low or non-existent, find you ones with great school systems, rising property values, etc.

By the same token, an experienced agent will steer you away from neighborhoods where the trends are downward; that is, rising crime, falling property values, and so forth.

And what about the prices of homes? Well, some people believe that we select them for our clients. Not true! We have no way of setting prices. They’re set by the market!

However, we can guide you toward properties that fit your individual needs and are comfortably within your price range. Frankly, it’s not in our best interests to put you into a home beyond your means or that’s not right for you. When that happens, we lose clients and money!

So, we’ll do our best to work within your price range and, based on current information (market supply, demand, etc.), we’ll come up with the best negotiation strategy possible.
Current information can include cost-per-square-foot of homes, ratios of list-to-sold prices, knowledge of the buyer/seller, etc. All this information is gathered by the agent and used to formulate solid offers.

Another important skill experienced Realtors possess is objectivity. We have the ability to stay out of the emotional process that often occurs with the buying and selling of a home. Instead, we present your case in the best light possible, all the while holding your information confidential from any competing interests.

One Realtor skill that’s often not apparent is our ability to network with other service providers (housing inspectors, title companies, etc.).

Professionally, we can’t recommend one specific vendor over another. However, we do keep lists of vendors with excellent reputations as well provide references for the vendors. This service allows you to choose the best provides for your particular situation.

Now, here’s one Realtor skill that everyone truly appreciates – the ability to handle tons of paperwork! Today, purchase agreements can run 10+ pages, and that doesn’t even include all the state and federal disclosure statements that are required in the current market! Heck, a real estate file can end up being 2-3 inches thick with paperwork these days!

And it’s not only the heavy paperwork handled by Realtors; it’s also the attention to detail within that paperwork. It’s their job (or a lawyer’s, depending on the state) to make sure all the information is correct because if it isn’t, it can end up costing the client hundreds of dollars.

So, as you can see, there are many reasons why it’s wise to use an experienced Realtor for the purchase or sale of a home! To find out about the services I haven’t mentioned in this article, contact me today at 402.598.3965 or peg@maloney.com.

Before Buying a Home, Talk to the Neighbors To Determine If the "Neighborhood Value" Is There!

"Neighborhood value" is the atmosphere of a particular area - the look and feel of the homes and yards and so forth. But, more importantly, it's the "vibe" you receive from the neighbors. Let's be honest: You can buy the finest home on the planet, but obnoxious neighbors can spoil the whole living experience for you.

Or, it could be the opposite - the neighbors aren't obnoxious; the current owners are. They may have had disputes with their neighbors and created an unhappy climate.

Depending on the nature of the disputes, the neighbors may be glad to see you, or they may be so negative toward the current owners that their attitude may spill over onto you, even though you had nothing to do with the situation! If that's true, then you may want to look at homes in a different area.

But there's also another important reason for you to talk with neighbors; good neighbors can alert you to problems you may not be aware of; for example, basement flooding, termites, leaky roofs, etc.

When that happens, you can either look at a different house or negotiate with the seller to lower the price of the property!

The Best Way to Evaluate a Neighborhood and Its Value

The best way to evaluate a particular neighborhood is write up a checklist of desirable aspects before you ever enter that neighborhood!

Below, I provide you with typical features (in alphabetical order) to check out. However, you should add as much detail as possible to that list since everyone has different needs and wants.

• Association fees (if applicable)

• Closeness to parks and recreation for the kids

• Crime rate

• Length of commute to work

• Noisy pets (barking dogs, etc.)

• Property taxes.

• Proximity to busy streets or main thoroughfares.

• Proximity to mall, shops, restaurants, etc.

• Reputation of school district

• Sidewalks and running trails throughout the neighborhood.

• Type of families in the neighborhood, etc.

The list above has all the "objective" features of a neighborhood; that is, you can measure them, for the most part, by facts and figures.

Assuming a neighborhood meets these objective criteria, then it's time to analyze the "subjective" features by visiting the area.  Drive through the neighborhood to get an initial look. Do this at different times and on several different days to get a real feel for the area.

Assuming you like what you see, you should also get out and walk the neighborhood. You may well see things you missed from the car. As I suggested earlier, talk to the neighbors to get their opinions of the neighborhood and the property you're considering.

I'd recommend you select a time when they're likely to be outside walking or in their yards (gardening, watering, mowing, etc.). That way, you don't have to knock on their doors and interrupt their personal time.

Since buying a home is such an important decision, you can see that it's vitally important to check both the objective and subjective features of a neighborhood. And, since it's my business to know every one of those aspects, I encourage you to contact me so I can fill you in on the "neighborhood value" of an area you're interested in! Contact me at 402.598.3965 or peg@maloney.com.