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 |  | What's the Score? |  | | | Making the Market Work | | | | Work It |
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I am pleased to present you with the latest issue of Life@Home. Delivered to home buyers, sellers and owners on a monthly basis, this electronic newsletter is designed to give you the real estate information that is important to you. In each issue, you will find practical tips and articles related to buying, selling or owning a home, as well as the latest news on real estate trends. I hope that you enjoy this issue of Life@Home. If I can be of any assistance, please do not hesitate to contact me. |
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| What’s the Score?
 Banks and lenders want to loan money to people who have the ability to pay back the debt. That’s why they will look closely at your credit score or FICO score during the application process. The score is a number, generally between 300 and 850, that indicates how much risk is involved in lending you the money. It is determined using a statistical model and is based on your credit history. The higher your FICO score, the better.
So now you may be wondering, what causes someone to earn a low FICO number? Here are five things that can adversely effect your rating.
1. Late Payments – Failure to pay your bills on time can drag down your score. This includes credit cards, utilities, school loans and other debts. The later the payment the more damaging the effect. It is also important to note that late payments stay on your credit history for a period of seven years.
2. Maxed Out – If you are carrying a lot of debt or are close to your credit limit on several accounts, you could be seen as high risk. In other words, the lender sees you as someone who is spread too thin and may not be able to make future payments.
3. No Track Record – Lenders also look at the length of your credit history. If you’ve only had accounts open for a short period of time that could hurt you. Lenders want customers with a proven track record, where history shows they are able to pay back debts over a significant period of time.
4. Not Diversified – One credit card, also called a revolving account, used consistently and paid on time may not be enough for some lenders. A good mix of credit, like car loans, other mortgages, school loans in addition to revolving credit is viewed more favorably.
5.Too Much? – If you’ve opened several new accounts recently, it may raise a red flag. Your score will factor in the number of new accounts versus more established ones.
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| | | | Making the Market Work
 Real estate can be one of the best ways to put your money to work. Historically speaking, real estate investors who do it right have seen steady returns. If you are considering buying as a business enterprise, consider these four points.
1. Do your homework –Know your finances inside and out before you buy. Although you may be able to count on rent to defer some of your costs, be sure to factor in renovations, emergency repairs, vacancies, recurring costs and other expenses.
2. Know your strategy – Is your plan to buy a home, renovate then sell it for a profit? Do you plan to hold onto the property for the long term? Come up with a specific plan with benchmarks that will help you determine if you are meeting your goal.
3. Location – Whether you are buying residential, commercial or vacation property, pay special attention to location. It is often better to purchase a mediocre property that can be renovated in a prime location than to buy in a less desirable area.
4. Know the tax implications – There are definite tax benefits to owning a second property, but there are also repercussions when it comes time to sell. Capital gains tax must be paid on profits from a real estate sale. If you plan to use the proceeds to buy again, look into a 1031 tax deferred exchange. This provision allows you to defer capital gains and roll-over the funds into other real estate investments.
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Work It
 Is your office or work station a distracting mess? Improve the situation by dedicating 10 minutes each day to organizing your desk. Also, take time daily to manage your inbox. Delete emails you don’t need and create a folder system for action items. Twenty minutes of maintenance can make a difference. |
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