Monthly Archives: May 2023

Understanding the Impact of Mortgage Inquiries on Your Credit Score

19 Friday May 2023

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Your credit score plays a crucial role in determining your eligibility for various financial opportunities, including securing a mortgage for your dream home. However, many prospective homeowners are often concerned about the potential impacts of mortgage inquiries on their credit score. In this blog post, we will shed light on this topic, helping you understand how mortgage inquiries can affect your credit score and what steps you can take to minimize any negative impact.

1 – What are Mortgage Inquiries?

When you apply for a mortgage, the lender will request your credit report from one or more credit bureaus to assess your creditworthiness. These credit report requests, also known as mortgage inquiries, are recorded on your credit history.

2 – Types of Mortgage Inquiries:

There are two types of mortgage inquiries: hard inquiries and soft inquiries. Hard inquiries occur when you apply for credit, such as a mortgage loan. Soft inquiries, on the other hand, occur when you request your own credit report or when a lender checks your credit for pre-approval purposes.

3 – The Impact on Credit Scores:

Hard inquiries may have a temporary negative impact on your credit score. Each hard inquiry typically results in a small decrease in your score, typically around 5-10 points. However, multiple inquiries within a short period may have a more significant impact, suggesting a higher level of risk to potential lenders.

4 – Time Frame for Inquiry Impact:

The impact of hard inquiries on your credit score is generally short-lived. In most cases, the negative effect lasts for about 12 months. After that period, the inquiries no longer factor into your credit score calculation. Soft inquiries, on the other hand, do not impact your credit score.

5 – Mitigating the Impact:
While you cannot completely avoid mortgage inquiries, you can minimize their impact on your credit score. Here are a few strategies to consider:


a. Rate shopping: When looking for a mortgage, aim to complete all your loan applications within a short time frame (e.g., 30 days). Credit scoring models typically recognize this practice as rate shopping and treat multiple inquiries as a single inquiry, minimizing the impact on your score.

b. Pre-approval process: Instead of applying for multiple mortgages with different lenders, consider getting pre-approved. Pre-approvals involve a soft inquiry and give you an idea of the loan amount you qualify for without affecting your credit score.


c. Focus on credit health: Prioritize maintaining a healthy credit profile by paying bills on time, keeping credit utilization low, and avoiding excessive debt. A strong credit foundation can help offset any minor impacts from mortgage inquiries.

Conclusion:
Mortgage inquiries, especially hard inquiries, may have a temporary effect on your credit score. However, with proper knowledge and planning, you can minimize the impact while searching for the perfect mortgage. Understanding the time frame for inquiry impact and adopting smart strategies like rate shopping and pre-approval can help you navigate the mortgage process without undue stress on your credit score. Remember, a strong credit history built on responsible financial habits is key to achieving your homeownership goals.

Are you ready to fulfill your dreams of homeownership? If so, let’s connect today and make it happen! At RMF Realty Team, we specialize in helping individuals and families find their perfect home and navigate the mortgage process. Our experienced team of real estate professionals is here to guide you every step of the way, from finding the right property to securing a mortgage that fits your needs. Don’t wait any longer to turn your dream of homeownership into a reality. Contact us now and let’s start this exciting journey together!

#CreditScore101, #MortgageInquiries, #RMFRealtyTeam,

What You Need To Know About Home Price News

17 Wednesday May 2023

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The National Association of Realtors (NAR) will release its latest Existing Home Sales Report tomorrow. The information it contains on home prices may cause some confusion and could even generate some troubling headlines. This all stems from the fact that NAR will report the median sales price, while other home price indices report repeat sales prices. The vast majority of the repeat sales indices show prices are starting to appreciate again. But the median price reported on Thursday may tell a different story. 

Here’s why using the median home price as a gauge of what’s happening with home values isn’t ideal right now. According to the Center for Real Estate Studies at Wichita State University:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less. While this is a good measure of the typical sale price, it is not very useful for measuring home price appreciation because it is affected by the ‘composition’ of homes that have sold.

For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

People buy homes based on their monthly mortgage payment, not the price of the house. When mortgage rates go up, they have to buy a less expensive home to keep the monthly expense affordable. More ‘less-expensive’ houses are selling right now, and that’s causing the median price to decline. But that doesn’t mean any single house lost value. 

Even NAR, an organization that reports on median prices, acknowledges there are limitations to what this type of data can show you. NAR explains:

“Changes in the composition of sales can distort median price data.”

For clarification, here’s a simple explanation of median value:

  • You have three coins in your pocket. Line them up in ascending value (lowest to highest).
  • If you have one nickel and two dimes, the median value of the coins (the middle one) in your pocket is ten cents.
  • If you have two nickels and one dime, the median value of the coins in your pocket is now five cents.
  • In both cases, a nickel is still worth five cents and a dime is still worth ten cents. The value of each coin didn’t change.

The same thing applies to today’s real estate market.

Bottom Line

Actual home values are going up in most markets. The median value reported tomorrow might tell a different story. For a more in-depth understanding of home price movements, let’s connect.

Overcoming Housing Challenges for People with Disabilities

05 Friday May 2023

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Finding a home that meets their needs can be a daunting task for people with disabilities. The search for an accessible and affordable home can be challenging, and sometimes frustrating. People with disabilities face unique challenges when it comes to housing, including accessibility, affordability, and discrimination.

Accessibility is one of the biggest challenges that people with disabilities face when searching for a home. Many homes are not designed with accessibility in mind, making it difficult for people with mobility issues to move around comfortably. Accessible features such as ramps, wide doorways, grab bars, and accessible bathroom facilities are often missing in many homes. Lack of accessibility can limit the freedom of people with disabilities, making it difficult for them to perform daily activities.

Affordability is another significant challenge for people with disabilities when searching for a home. People with disabilities often have limited financial resources due to their medical expenses, which can make it difficult to afford the high cost of accessible housing. Many people with disabilities are also unemployed or underemployed, which further limits their financial resources. This can make it challenging for them to find affordable housing that meets their needs.

Discrimination is another significant challenge that people with disabilities face when searching for a home. Some landlords and property owners may discriminate against people with disabilities and refuse to rent to them. This discrimination can be blatant or subtle, such as not making reasonable accommodations for disabilities or charging higher rent to people with disabilities. This can make it difficult for people with disabilities to find suitable housing.

In addition to these challenges, people with disabilities may also face difficulties in finding inclusive communities where they can feel welcomed and valued. The lack of inclusive communities can make it difficult for people with disabilities to participate in community activities, access healthcare services, and other essential services.

Despite these challenges, there are ways to overcome them. One way is to work with a real estate agent who specializes in accessible housing and has experience working with people with disabilities. They can help people with disabilities find homes that meet their accessibility needs and budget.

Another way to overcome housing challenges for people with disabilities is to advocate for their rights and participate in disability rights organizations. These organizations can provide information and resources on accessible housing and advocate for the rights of people with disabilities.

In conclusion, finding suitable and affordable housing is a significant challenge for people with disabilities. Accessibility, affordability, discrimination, and lack of inclusive communities are some of the challenges that people with disabilities face when searching for a home. However, with the right support, resources, and advocacy, people with disabilities can overcome these challenges and find a home that meets their needs. It’s important for all of us to work towards creating more inclusive communities where everyone can thrive, regardless of their abilities.

#AccessibleHousing, #DisabilityRights, #InclusiveCommunities, #RMFRealty, #RMFRealtyteam,

Why Buying a Home Makes More Sense Than Renting Today

02 Tuesday May 2023

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Why Buying a Home Makes More Sense Than Renting Today

If you’re a South Carolina resident who is considering buying a home, you might be wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988. 

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732,up by $15 from last month and down by $32 from the peak but is still$354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With South Carolina rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, South Carolina homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years). 

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

Homeownership Allows You To Start Building Equity

In addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth. 

And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it may make more sense to pursue your dream of homeownership.