The Houston Housing Market in 2020 and How Your Credit Score Affects Home Loans

The Houston Housing Market in 2020 and How Your Credit Score Affects Home Loans

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Houston is the fourth largest city in the U.S and the biggest city in Texas, with a population of 2.3 million people. Houston is one of the top markets in the nation for real estate investing with its diversified economy and a huge demand for housing. In 2019, the housing market Houston ended strong, and now that we’re in 2020, it continues to perform well.

 

 

Current Housing Market in Houston

COVID-19 has caused disruption in every sector, from real estate to farming and everything in between. Not only individual health has been compromised, but business health has been affected, as well. During the last week of March, the housing market also saw a small downturn compared to the rest of March’s performance. 

 

However, there is good news for the housing market. Even though COVID-19 interrupted the regular stream of sales, Houston sales were over 11% ahead of March 2019 levels. That is excellent year-on-year growth. Given the fact that we’re dealing with sales figures during a pandemic, these numbers are very encouraging. 

 

Why are we seeing such impressive growth during a pandemic? The federal government has lowered interest rates to the point where they are now at all-time lows. As a result, mortgage rates are also at an all-time low, and consumers are taking advantage of this fact. 

 

So, what are the numbers we’re seeing? March numbers, according to the Update from Houston Association of Realtors, recorded 7,566 single-family homes sold in 2020 compared to 6,995 in 2019. In total, that is an 8.2% increase and nine consecutive positive months for house sales.

 

Stated by credit repair Houston analyst, the most purchased homes fall in the single-family category with a price range of $500,000 to $750,000 for March. Single-family homes in the range of $250,000 to $500,000 came next. Families that leased single-family homes also increased during March.

 

Median pricing for single-family homes rose 4.1% to $249,900, and average home prices rose 3.8% to $309,785. When it comes to home sales in March, these numbers represent the highest prices ever recorded. 

 

Total sales for all property types equaled 8,965 for March, representing a 6.9% increase from March 2019. The total dollar amount for home sales rose 11% year-on-year to just over $2.6 billion.

 

houston housing

 

Houston Housing Market Predictions for 2020

Prospective homebuyers face competition when looking to purchase low to mid-range houses for the rest of 2020. Homes priced between $150,000 to $200,000 are already in low supply, and we’re only a few months into the year. 

 

On the upside, low-interest rates will likely remain in place for the foreseeable future. With the economic downturn due to COVID-19 and falling oil prices, Houston’s economy is facing a slowdown with the rest of the nation. However, falling interest rates and strong year-on-year growth are reasons to remain positive regarding the long-term outlook of moving to Houston.

 

 

How Does Your Credit Score Affect Loan Options and What Scores Do You Need?

When you’re looking to purchase a house, you’ll need to shop around for a mortgage. The most critical factor in getting the best mortgage rate possible from lenders is your credit score. As a rule, the higher your credit score, the better interest rates you’ll qualify for. According to David Lin, a former risk management director for Barclays and Citibank, if you have a credit score of 700 or above, you’ll be able to land a beneficial interest rate.

 

With scores above 720, you fall into the category of “excellent” rated credit, and you’ll have access to the best possible interest rates. A score that falls in the range of 690 to 719 is considered “good,” and at this range, you’ll still qualify for beneficial rates, though some lenders will be warier. Once you dip below 690, your options will become more limited, and if your score is around 640 or lower, a conventional mortgage might not be possible to obtain. 

 

 

How to Improve Your Credit Score

If you have a credit score that needs improvement, there is good news! With time and dedication, all credit scores can be improved. So what can you do to see your score improve by ten, twenty, thirty, or one hundred points? 

 

Here are five ways to improve your credit score:

 

On-time Payment

Whether you have auto loans, credit card payments, or school bills, pay each installment on time. Lapsing at all will significantly damage your credit score. If you’ve already lapsed on one or more bills, get back on track as soon as possible. Paying your loans on time is the single most significant thing you can do to improve your credit score. 

 

Cap Your Spending

Set a spending limit of no more than 30% of your total credit limit. For example, if you have a credit limit of $3,000 combined from your credit cards, plan to put no more than $900 total on your credit cards.

credit score for home

Pay Off Balances

If you have cards that have high balances, pay them down or transfer your balance to free up credit. Paying off balances will improve your credit score significantly.

 

Find a Mortgage within 30 Days

When you apply for mortgages, lending companies will run your credit score. Each time this happens, your score will dip slightly. Finding your mortgage within thirty days will ensure that your interest rate isn’t impacted by credit checks.

 

Get Help

Sometimes the best thing you can do is work with a credit repair company to help improve your score. Companies can help you utilize strategies that are ideal for your specific situation.

 

 

Buy in Houston

Houston is one of the top markets for real estate. Acquiring a home in this area has lots of advantages, such as the low-interest rates for mortgages and a diverse economy in the city. Should you want to buy a house in Houston, achieving a high credit score is essential to get the lowest interest rate. We hope this article has given you an idea for improving your credit score to have a higher chance of getting the house that you want.

The Austin Housing Market: Tremendous Growth in 2019 & Predictions for 2020

The Austin Housing Market: Tremendous Growth in 2019 & Predictions for 2020

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Everyone wants to live in Austin! Since 2012, the housing market has continued to boom year after year, thanks to consistently ranking as one of the best cities to live in the United States. 

 

Add to the mix that many large companies, like Apple, Dell, and eBay, are moving their headquarters to the area, it’s no wonder that the Austin market is getting more and more competitive. If you’re looking for a home in Austin, you need to be prepared about what to expect. 

 

To help you, let’s look at what the market was like in 2019 and what you can expect moving into 2020, and what credit score you’ll need to get the best mortgage interest rate to make your Austin dream home a reality!

 

Austin Housing Marketing in 2019

Stated by credit repair Austin analyst,  the Austin housing market has gained incredible steam since 2010, almost doubling home values within the city. This year was no different. 

 

As of November 2019, a press release from the Austin Board of REALTORS stated that the median price for a single-family home within city limits rose 10.6% over the previous year! 

 

That’s a massive jump for a single year-over-year comparison! The average home price was at $400,000+ and climbing, with a high demand for single-family homes, which make up 47% of the city’s units. 

 

The demand for homes was unmatched by the supply, and the market reflected that dramatically. The average number of days a home was on the market before it sold was only 15. 

 

People were outbidding each other left and right, trying to get into the Austin city limits! 

 

Austin Housing Market Predictions for 2020

In 2020, you should expect a continued climb in both pricing and competition when it comes to the Austin housing market. Between the growing population and the shortage of housing, Zillow predicts that home prices will rise by 2.8%. 

austin tx housing market

A recent Zillow survey:

Indicated that 83% of participants believe that Austin will outperform the average U.S. home price growth over the next year. 

 

There is the possibility in 2020 that the Austin housing market will transition more towards a buyer’s market, but that will only happen if there is a significant increase in homebuilding efforts.

 

Austin will still have a substantial rental demand in 2020, with more than 55% of residents who rent rather than own, thanks to the rising housing prices. This poses an excellent opportunity for investors and homebuyers who want to purchase a property to rent it out. 

 

Rental income can make a massive difference to your pocket, and the way the Austin population and demand is booming, it’s an attractive investment.

 

What Credit Score Do You Need to Buy a Home in Austin?

If you’re looking to get in on the hot Austin housing market in 2020, you’ll need to make sure that your credit is in check. When you apply for a mortgage, your entire credit history will come under scrutiny, and your score will determine what interest rate you get for your loan. 

The higher your credit score, the better the rate. If your score is lower, you’ll have to deal with higher interest rates, and that’s even if you can get approved at all.

 

Knowing your credit score is one of the essential steps in preparing to purchase a home. Fortunately, if your credit score isn’t up in the 700’s, that doesn’t mean that you’re out of luck when it comes to getting a mortgage. The minimum score required depends on the type of mortgage you get. 

 

There are three common mortgage types:

 

Conventional

A conventional lender is typically a private bank or creditor, and while minimum credit scores will vary, they usually range between 620 to 640. 

 

USDA

The United States Department of Agriculture offers mortgages and loans to prospective homebuyers looking to purchase property in less industrialized areas. There is no set minimum credit score for these loans, but it’s recommended to have at least a 640.

fixing credit in austin tx

VA

If you’re a veteran, the Veteran Affairs department offers a variety of mortgage options and access to lenders to help you purchase your home. There are no set minimums, but lenders under this program typically require at least a 620.

 

FHA

The Federal Housing Administration offers loan and mortgage programs to help people with less than stellar credit purchase homes. With an FHA loan, you’ll need a minimum credit score of 580 and be able to put down a 3.5% down payment. 

 

You should also know that you’ll need to purchase mortgage insurance when you use an FHA loan to protect the lender if you are unable to make your mortgage payments.

 

With Austin still holding onto the top of the U.S. housing market, you should give some serious thought to purchasing an investment property. But to make it worth your while, you’ll need to make sure that you get the best interest rates possible with ensuring that your credit score is the best it can be. 

 

If:

You’re worried that your credit score will affect your ability to get a great interest rate on your mortgage, consider hiring a credit repair company. 

 

They are experts at helping folks repair their credit reports, and will help you understand your current situation, as well as put together a personalized, detailed plan to get your credit up to par. Don’t let your credit score affect you from realizing your dream of buying a home in Austin! 

 

 

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Why Did My Credit Score Go Down & How Can I Fix It?

Why Did My Credit Score Go Down & How Can I Fix It?

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Have you ever seen that episode of Black Mirror where the number of followers you have on social media determined whether you could purchase a car or be accepted into a prestigious apartment complex? This is essentially how credit scores work. 

 

A credit score can help you get a loan, buy a car, or rent a condo. If you have poor credit, this could close a lot of doors for you and affect your financial freedom. 

 

Maintaining good financial standing is no easy feat. The slightest dip can affect you in unforeseen ways. What’s worse, you might be scratching your head in confusion over why your score dropped and what you can do to boost it back up.  

 

Let’s go through some factors as to why your credit score has dropped and what you can do to repair your score. Don’t fret, while the idea of a poor credit score may seem scary, you are in control of it and this article will help you understand why and how. 

 

What are the Reasons Why Your Credit Score Dropped? 

You Missed a Payment/Are Late on a Payment

Life gets in the way. While you are pretty consistent when it comes to making your payments on time, there are some months where you either forget because you’re so busy or other financial obligations require you to skip a payment. This can cause a dip in your credit score as late payments make up a large portion of your credit score. 

Your Credit Card Limit Was Lowered

Credit card companies reserve the right to lower your credit line, especially if you’ve made a habit of being late on payments. Something like this can explain the drop in your credit score as it will increase your debt-to-credit ratio. 

It’s recommended to keep this to 30% of your credit limit and under. 

You’ve Closed a Credit Card Recently why does credit score drop

While you may have cut up a card and said that you were done with your addiction to shopping, closing an account doesn’t always work in your favor. It’s an incorrect state of mind to think that closing a credit card will benefit you. 

 

This may sound crazy, but the best thing to do is to pay off your credit card entirely and keep the account open. Put your card in a drawer or use it very sparingly. 

Did You Apply for New Credit?

If you’ve applied for a new credit card, a home loan, or any sort of loan, this can cause your credit score to drop. It’s unfortunate, but it happens. 

 

When a card issuer assesses your credit report, this is known as a “hard pull.” Unfortunately, this can lead to a slight drop in your credit score, whether you are approved or not for the credit card.

Made a Large Purchase

While you are given a maximum amount on your credit line, it’s never good to max out your credit card or come close to it. Especially if you’ve made a single large purchase. 

 

This shows that you are not utilizing your card properly and can sometimes communicate to credit bureaus that you have no intention of paying your credit card off or it could be difficult to pay off in a timely manner. 

Identify Theft Can Hurt Your Score

While you may think to yourself ‘I didn’t make these purchases, someone else did’, you could still end up paying for these fraudulent charges. Identity theft drops your credit score. Regularly check your account regularly to ensure all of the purchases on your card was actually made by you. 

Did You Pay Off a Loan?

I know what you’re thinking. You just paid off a loan early. You accomplished a longtime goal. Job well done! You no longer have to worry about holding the weight of that burden on your shoulders. Something like this can cause your credit score to drop. 

Credit Report Errors

In the end, people and technology are flawed. Mistakes happen. If an error occurs, even when it’s ultimately not your doing, your credit score can be negatively impacted. It’s frustrating, especially when you have been doing so well in maintaining a good credit standing. 

 

Paying an installment loan off early won’t necessarily improve your credit score, and keeping it open for the life of the loan may be a better strategy. 

 

credit dropped

How Can You Raise Your Credit? 

So, your credit score is not where you envisioned it would be. As we said before, there is no reason to panic. Do not reserve yourself to thinking that you will always be at this score for the rest of your life. 

 

No brand new car. No nice house in the suburbs. You can raise your credit score, and in this section, we will be going over how to do just that because it is possible. 

Make On-Time Payments

This point is a little bit of ‘hitting the nail on the head,’ but if it wasn’t obvious already, you should try your best to make your payments on time everytime. Even if you pay $5 more than the minimum and go at a steady pace for a while, it is better to make your payments on time instead of letting your payments build up.  

Don’t Use Your Credit Card Too Much

The idea of a credit card is tempting. You don’t have enough money in your bank account for those new pair of shoes, but you have room on your credit card. 

 

So, you get the shoes. Then you get a jacket. Then you pay for a fancy meal out with friends. 

 

Overusing your card on a very consistent basis is not good, so make sure you are aware of how often you swipe that card. 

Don’t Close Your Credit Cards

As mentioned before, it may seem like a good idea to close a credit card and not tempt yourself. You are doing more harm than good this way. Keep your credit card open and be mindful of when you should and when you shouldn’t use it. 

Raise Red Flags on Credit Report Errors

If you see something on your credit report that doesn’t look right, don’t let it just sit there and fester. Dispute this error before it can affect your credit score too badly. 

changes in credit scoreDon’t Apply for a Loan 

While you are trying to raise your credit score, do not apply for a loan. This may seem like a viable solution for helping you escape your credit card debt, but you will drop your score by doing so. While you are looking to boost your score and pay off debts, hold off on any loans.  

Request A Credit Line Increase

As mentioned earlier, maxing out your credit card is no bueno. You may feel like requesting a credit line increase is tempting, but you may want to take advantage of the opportunity. By doing so, your credit card balance will be further away from the maximum and not threatening to drop your score. 

Bring in a Credit Repair Company

When you feel like you are unsure of how to go about raising your credit score, then it’s time to bring in a credit repair company. These are the experts who do this for a living. 

 

While you may feel like you are out of options and your wheels are just spinning in place, a credit repair company will devise a customized solution to fit your exact needs and help you move forward. These experts will get you back on track and you can take a big sigh of relief.

 

When it comes to improving your credit score, remember that it is not a sprint, but a marathon. It will take some time to see results, which could be discouraging, but should actually be promising. 

 

You should know that while you may not see changes right away, you are taking the right steps that will pay off in the end. With the help of the tips listed above, along with a credit repair company, you will be on your way to a fixed credit score and leaving bad credit behind.

How Do Banks Control & Monitor Credit Limits?

How Do Banks Control & Monitor Credit Limits?

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When your new credit comes in the mail you’re given a paper listing your credit limit. Every so often, if you’re a good borrower, you can increase your credit limit. However, have you ever wondered how this credit limit is even decided?

 

The method used by credit card companies to determine your credit limit is called underwriting. Underwriting works via mathematical formulas besides testing and analysis. But, the exact details of how this works is kept tightly under wraps by each institution since it’s how these companies make their money.

 

In this article, we do our best to shed some light on credit limits, how they’re determined, and your credit limit is affected by your credit score.

 

What Is A Credit Limit?

Simply put, a credit limit is the maximum amount of money you can spend on your credit card. While a high limit allows you to purchase more expensive items, offers you more flexibility, and can improve your credit score, it can also get you into trouble easily if you get buried in credit card debt.

 

Remember:

 

How much of your credit you use determines a portion of your credit score. It’s wise to have more available credit than you’re using to keep your credit score high.

 

While most Americans have credit cards, few of them think much about their credit limit, which is one reason so many of them get into trouble with their credit cards. Fortunately, it’s easy today to get a handle on your credit limit with the many apps available that assist you in managing your credit cards.

 

If you don’t have a smartphone or prefer not to use an app to achieve this, you can use the card issuer’s website to get this helpful information. Most of these sites will give you your balance and your limit at a glance so you know exactly where you stand.

 

If you don’t have access to an app or a website, you should be able to find this information on your statement each month.

 

How Are Credit Limits Determined?

Stated by a credit repair company in Austin, when a company sets a credit limit, it’s a sign of how much they trust the borrower to pay back what they owe. If you’re given a high limit, it means the bank thinks you’re low risk and are likely to pay off your debt and make timely payments. You’re considered a good borrower.

 

However, if you don’t look like a low-risk borrower to the bank, they’ll give you a low limit to start. If you pay your debts responsibly, the banks or card issuer may raise your limit after a set time. After some time, you can also request to increase your credit limit, if need be.

The Role Of Credit History

A major determining factor in your credit limit is your credit history. When you apply for a credit card, the card issuer checks things like your annual income and your credit report to determine what your limit will be.

limited by credit score

 

When they look at your credit report, they factor in your repayment history, your credit history length, and how many credit accounts you have open. Open credit accounts include other credit cards, mortgages, student loans, auto loans, and personal loans.

 

Card issuers also look to see if you have any derogatory information on your credit report. Bad marks on your report could be things like bankruptcies, missed payments, late payments, tax liens, or accounts that have gone into collections.

Other Items That Factor In Your Credit Score

 

While the underwriting process is different depending on the company, many consider identical variables in determining your limit. Some items they consider are the credit limits on your other accounts and your work history.

 

Your debt to income ratio also plays a role. If you have a lengthy work history and low debt to income, you’ll be seen as low risk and most likely be given a higher limit.

 

If you apply for a card and don’t get the credit limit you were hoping for, it’s most likely something in your credit report that’s holding you back. That’s why it’s a good idea to check your report regularly to know where you stand and what you can do to improve your credit score.

 

How Do Credit Limits Affect Credit Scores?

While credit card limits affect how much purchasing power you have, they also directly impact your credit score. One of the ways it does this is mentioned above in your credit utilization ratio or known as debt to credit ratio. This ratio is important as it comprises 30% of your FICO credit score.

 

People with low credit limits get into trouble easily with credit utilization, which is why it’s best to strive for higher limits. If you have high credit utilization, it reflects poorly on your credit score.

 

However:

 

Remember that every credit report is different, and just because you brought your ratio down and it reflects positively on one report, it doesn’t mean it’ll do the same on another.

 

Still, it’s wise to keep your credit utilization ratio low when possible. How low? Well, many experts say under 30% is a good number to aim for.

 

A good way to increase your score and lower your credit utilization ratio is to ask for an increase in your credit limit but keep your card usage the same.

Monitoring Credit Limit

What About Going Over Limit?

We probably don’t have to tell you this, but going over your limit is a bad move. Going over the limit takes your credit utilization to over 100%, and that’s a bad place to be in.

 

Most items, your credit card company will just deny the transaction that puts you over your limit, however, some don’t. Some card issuers allow users to opt into an over the limit coverage whereby they pay a fee if they go over and the card issuer honors the transaction.

 

Still, even if you have this protection, it’s best not to go down that road.

 

Besides hurting your credit, going over the limit puts you at risk for having your limit decreased or your account closed by the card issuer. Also, being over the limit may cause your card issuer to increase your interest rate. So, avoid going over whatever you do.

 

It’s important to understand how credit limits work and how they impact your credit score. Equally important is staying on top of your credit score to know where you stand. There are many apps available right from your smartphone that let you access your credit score and show you where you need to improve.

 

Are you getting your phone out now?

 

 

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Thinking of an Apartment or Home in Austin? Here Are the Credit Scores You Need for Good Terms

Thinking of an Apartment or Home in Austin? Here Are the Credit Scores You Need for Good Terms

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So, you’re thinking of buying a home or renting an apartment in the Austin area? Are you moving into Austin and need a place to live? Well, the housing market here is robust, but getting a good deal on an apartment or favorable terms on a home loan depends on having a good credit score

 

This article will provide a picture of what the Austin home market is like, and what kind of credit score you might need to get a place you’ll love.

Current Housing Market in Austin

Stated by credit repair Austin experts, while housing prices across the country are dipping as of 2019, and properties are lingering on the market longer than before, some local markets are thriving, which means there’s fierce competition for buyers and renters alike. 

 

The real estate market here in Austin is one such market, and it ranks as one of the hottest in 2019 and looks to get even better in 2020. According to Zillow, median home values in the Austin area grew by over 6% as of June 2019, and most experts expect that growth to continue, albeit more slowly, over the next year.

 

Because of a thriving job market, values for homes in Austin have continued to grow since 2012, and while this trend is the same for many major metro areas, Austin is one of the strongest. 

 

While many homes stay on the market longer in other areas — some up to 50 days or more — here in Austin, the average time for a home to be on the market is 12 days, which indicates a healthy housing market with a lot of potential.

 

One of the major driving factors in the Austin housing market is the incredible population growth as it ranks consistently as one of the best places to live.

 

Another factor that drives up value here in Austin is the supply/demand ratio when compared to other cities in Texas. 

 

According to the Home Buying Institute:

 

As of May 2019, the Austin area had less than a two-month supply of homes for sale. A “balanced” real estate market has closer to five or six months worth of supply. 

 

austin housing market

What About Affordability?

With a population that’s growing and an economy that’s booming, it’s no surprise that homebuyers and apartment hunters are concerned about affordable housing. 

 

Although home prices in Austin are climbing and continue to climb, many experts say Austin is still one of the more affordable places when compared to more saturated markets like San Diego and Seattle.

 

Still, experts advise that if you’re planning on relocating to Austin, you’re going to have your work cut out for you because there is a high demand and low inventory. 

 

The competition for housing is fierce, which is why it’s advised that you start looking for a house or apartment as soon as possible to give yourself plenty of time to find the right place at the right price. 

 

Since homes do not sit on the market long in Austin, deciding to wait or ‘think about it’ may mean losing a property to someone else who’s ready to buy. 

 

Lastly, take advantage of low mortgage rates, which have decreased dramatically over the last few years. The average rate for a 30 year fixed mortgage loan decreased to 3.8% as of June 2019. But to get these low rates, you’re going to need a good credit score, which takes us to the next topic.

What Credit Score Do You Need For A Home in Austin?

So, if you’re looking for a home, it’s essential you examine your credit score before you apply for a loan. Your credit score is a significant determinant factor in whether or not you get a loan and what terms you get with interest rates. 

credit score for austin home

The higher your score, the more favorable terms you’ll get, and the lower the down payment you’ll need.

 

While there are a variety of home loans you can apply for, in general, the average credit score for Texas first time home buyers is 671, according to Credit Karma. However, the credit score you need depends on the type of loan you’re getting. 

 

For example:

 

With an FHA Loan, you may be able to get that with a score of 580 or above. A VA Loan can be had with a score of 620 or more. A USDA Loan can be gotten with a score of 640 or above, and a conventional loan can be gotten with a score of 620 or above.

What About Renting?

If you’re interested in renting an apartment, your score is still important, but not as much as when you’re getting a loan. Most people or companies who are renting out apartments will expect you to have a score of 620+. 

 

However, because Austin is a hot market, and demand is high, rental companies and landlords may want to see scores over 700.

 

While landlords differ in what they look for, generally speaking, they want to know about your income and your credit history to show them you have the money to pay your rent and you’re responsible for making your payments on time.

 

Just like a low score may get you denied for a home loan, so too will a low score get you denied for an apartment.

 

Because your credit score is so important when renting or buying, it’s essential that you do all that you can to improve your credit score if it’s not where you want it to be before you begin shopping. Once you start shopping head over to Craft Apartment Locators in Austin to locate your new apartment today!

 

The best way to improve a low score is to start making all of your payments on time and pay off your debt as quickly as possible. If you need help, contact a credit repair company to get you back on track to get you into the home of your dreams.