Increase Your Credit Score Before Going For A Mortgage
b'With Terry Story, 27-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Terry\\u2019s topics this week include the all-important credit score\\xa0that banks consider before granting a mortgage. Instead of the old automated process, a new kind of software allows for \\u201ctrended credit data\\u201d which pulls payments you\\u2019ve made from the past two years to see, not only if you\\u2019ve paid on time, but how much of your balances you actually pay. Mortgage lenders are looking at patterns that give them a predictive feature to determine whether or not you\\u2019re a good risk.
Changing topics, Terry comments on the fact that, overall in our country, lot sizes are continuing to shrink, mostly due to high population density, since many people choose to live close to work and schools.\\xa0 Even retirees often opt for living in cities and more crowded residential sections which allow them the ease of walking to most places. If you long for wide open spaces, large expansive properties do still exist at reasonable prices, but those tend to be in more remote areas.
Terry\\u2019s Real Estate Survival Guide topic concerns a question that was submitted from Gary Singer of the Sun Sentinel. The reader asked a question regarding the responsibility of a homeowner to pay a portion of a fee levied against the homeowner\\u2019s association for a code violation. Regardless of the circumstance and its relevance to any particular homeowner, all members are held equally responsible and must share in any such expenses. It\\u2019s all for the good of the community in which you chose to live, says Terry.
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Steve Pomeranz: It\'s time for Real Estate Round-up.\\xa0 This is the time every single week we get together with noted real estate agent Terry Story.\\xa0 Terry is a 27-year veteran with Coldwell Banker located in Boca Raton, Florida.\\xa0 Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: You know, I understand that the banks are changing the rules a little bit on how they measure your credit in order to give you a mortgage. \\xa0Tell us about that.
Terry Story: That\'s right, Steve.\\xa0 Up until now, they evaluate a buyer\\u2019s potential standard credit by looking at an automated process.\\xa0 They take into account how much you owe, who it\'s owed to, and if you make your payments on time.\\xa0 Now, this revised software\'s going to rely on what they\'re calling a trended credit data, which is going to be pulling payment records from the last 24 months to determine not only if you pay on time, but how much you pay towards your credit card balances.\\xa0 In other words, they\'re looking to see that you\'re making more than that minimum.
What\'s also being said, really, they\'re looking for habits.\\xa0 It\'s not really necessarily saying that you should pay 20% more or anything like that, but seeing that your willingness to pay more than that minimum and they\'re looking for the habits.
Steve Pomeranz: The idea basically is that as the gathering of data grows and they\'re able to apply more statistical analysis to it, they find different aspects of our financial life that can predict, or have predictive natures, or predictive features.\\xa0 They\'re saying, "Hey, we realize that if we can see who is paying off their loans at a faster rate and doing it consistently over time, we can assign maybe a higher credit rating to them, and we feel more comfortable about giving them a mortgage." This is a new wrinkle.\\xa0 We haven\'t seen this before.
Terry Story: That\'s right.\\xa0 I think this is a good thing.\\xa0 I don\'t think it\'s necessarily going to penalize those that only make the minimum payments because, for some, that\'s all they can do, but certainly you get the extra credit if you go the extra mile.'