Seller’s Mathematics
When buyers begin the real estate process, they are often encouraged to carefully consider their finances. The fact is sellers would be wise to do the same. You want to know exactly what money you have, how much you owe and what expenses you might incur. Each of these will be factors when determining list price and ultimately the final sale price.
Here are four steps that can help you see the big financial picture.
1. Ask a real estate agent for a Competitive Market Analysis (CMA) to help determine the value of your home.
2. Estimate how much it will cost to sell the home. Including commission, closing costs, taxes and the cost of getting the house ready to show.
3. Think about how much it will cost to purchase your next home. In addition to sale price, add in things like moving expenses, home inspections, homeowners insurance and other ancillary costs.
4. When you have all this information together, do the math. Take the estimated value from the CMA and deduct the amount left on your mortgage note. (This number can be acquired by calling your lender.) From that result subtract what you expect to spend on selling the home. What is left is an estimate of your total proceeds. This number will help you gauge how much money you have to spend on a new home and/or how much you may need to borrow.
5 Factors that Decide your Credit Score
Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. These factors will affect your score.
1. Your payment history. Whether you paid credit card obligations on time.
2. How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.
3. The length of your credit history. In general, the longer the better.
4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.
5. The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.
For more on evaluating and understanding your credit score, go to http://www.myfico.com.
