New homes designed for the changes in your life

If you have set your goal to buy a new home, then there is no better time to start a savings plan than now. Interest rates remain at record lows and home prices in the Texas market are more appealing and affordable that most major markets across the country. Adding a savings program for your new home is easy once you have established your core savings plan. Know how much you can afford to spend and how much you will need for a down payment.

You’ll find a mortgage calculator on our website to help you determine how much home you can afford and the estimated monthly payments. This may also help you get a better idea of how much debt you want to eliminate.

If credit cards are making the biggest impact on your debt or inhibiting your savings goals, try some very simple steps like taking them out of your wallet, and start using cash. Limit yourself to just one or two credit cards and keep in mind that if what you are buying (within reason) can’t be paid off when the bill is due, you should reconsider making the purchase.

Just as important as saving money, especially when preparing to buy a home is your credit rating. In fact, savings and credit score are two of the most important things considered by mortgage lenders.

There’s a lot of talk about credit scores, watching over your credit, improving credit, establishing credit and repairing credit. However, the most important thing to understand is how your credit is scored and the necessary steps needed to establish good credit, maintain good credit and improve not so good credit.

The Fair Credit Reporting System and Accurate Transaction Act developed a formula that will rate every credit consumer’s spending history with a personal Credit Score.

By evaluating this score – the credit company you are working with will decide if you are responsible enough to get credit or if you are approved – how much of an interest rate should you be charged. If your credit score is average or below - chances are you will pay a higher interest rate since you could be a credit risk.

How many accounts you have, what type of credit you owe, if there any collections reported, and the overall type of debt, are all used to calculate your credit score.

Following is a summary of what is reviewed and included in evaluating your credit worthiness:

1. Paying your bills on time – because if you pay them late – even one day – or you are referred to a collection agency, declared bankruptcy, etc. – this will negatively impact your report and drop your score as much as 200 points.

2. Outstanding Debt – The amount of debt you owe verses your credit limits; in other words if your average limits are $2000.00 and the balance owed is almost that much – then it reflects negatively on your report. In short, you owe too many people.

3. How many years has it been since you opened your accounts? It’s positive to have been a long term credit customer – be sure your history is good. Additionally, if you are a young adult and just beginning your financial freedom – a short history is okay providing you have made timely payments.

4. When is the last time you applied for credit? A credit report that reflects a number of retailers, banks or other lenders checking your credit status indicates that you are traveling down a road to more debt. Remember, credit checks that you pull do not count.

5. What does your credit picture look like? How many accounts do you have and what types of accounts are they? The newest credit scoring formulas take into consideration the type of credit accounts you have – so a mixture is a good balance. What’s not? Having too many finance loans, retail cards or major credit cards.

Normally – most adults have an auto, home or education loan; one major credit card and perhaps one small retailer card.

For more information on credit and obtaining a free copy of your credit report, visit the Federal Trade Commission’s website at www.freecreditreport.gov.