Credit Scores Explained

Let’s face it, most of us don’t have a couple hundred thousand dollars under our pillow to buy a home or even a new vehicle. We need banks to loan us large amounts of money for big-ticket items. How do banks determine who qualifies for a loan by calculating our credit score?

Your credit score is 100% up to you. How does it work?

First, we explain how the banks obtain your scores. Loan institutions use three credit bureau agencies: TransUnion, Equifax, and Experian, to get your score. They submit your social security number, and each company gives a score from 300-850. The higher the score, the better.

The three credit bureau agencies use FICO and Vantage Score to determine your score. Below are the five items FICO uses to determine your score:

  • 35% Payment History – Pay down/off loans that are currently outstanding
  • 30% Amounts Owed – Do not spend more than you make. Keep your loan-to-debt ratio below 30% (not including your mortgage debt) but all other debt owed like vehicle loans, credit cards, student loans, etc. Experts say to stay below 10% if you want to maintain a credit score in the high 700s
  • 15% Length of Credit History – Keep the line of credit/loan open, even if the balance is zero. Do not apply for a dozen credit cards just because you can. The credit limit, even though it’s zero, the balance goes against your credit score under income to debt (#2 above.) Furthermore, do not close a bunch of credit cards either because the score is also measured by history by 15%.
  • 10% Mix – Keep a mix of credit (a car loan, a credit card, and a mortgage.) Lenders like to see a borrower who can handle a combination of loans.
  • 10% New Credit – Restrict yourself from applying for credit of any kind unless you have planned this through. Every time a creditor submits your application for a loan, it reduces the current score. They say 5 points or more for every pull.

Keeping a healthy, high credit score takes discipline and constant work. If you have questions or need help obtaining a loan, contact the experts at EB Mortgage today!

EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today! 

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/

Experts Spot Recession Signs in Michigan

Soaring prices for items such as gas, airline tickets, food, and more are signaling alarms to economic experts. According to a June report by the University of Michigan Surveys of Consumers, buyer sentiment decreased by 14.4 percent in June, and roughly 79 percent of consumers anticipate bad times for business conditions in 2023. 

University of Michigan economist Joanne Hsu said, “As higher prices become harder to avoid, consumers may feel they have no choice but to adjust their spending patterns.” Some economists project a 50 percent chance that the United States economy will slide into a recession before 2024. 

For Michigan, the automotive industry is a telltale sign of a potential recession, as huge layoffs generally begin there. When people are out of work, they swiftly cease taking out vehicle loans. 

Strong consumer demand has outpaced supply, as semiconductor shortages have put auto production behind for nearly two years. This unusual trend is leaving automakers with empty lots. Car sales in April and May of 2022 were ultra-low due to lack of supply, not demand. 

According to some consumers, a recession is already happening due to the United States jobless rate being 3.6 percent in June for the fourth month in a row. For Michigan specifically, the jobless rate was 4.3 percent in May. 

Technically, a recession is labeled as an economy that shows negative growth for two consecutive quarters. It is possible that the United States economy could slip into this trend, but the stark recession in 2020 lasted only two months at the beginning of the COVID-19 pandemic. 

The Great Recession took place between December 2007 and June 2009. The jobless rate stayed around nine percent and higher for most of 2009 and 2010. 

Gabriel Ehrlich, director of the University of Michigan’s Research Seminar in Quantitative Economics, says he doesn’t see a recession as inevitable. He warned that a recession could be sparked by the Federal Reserve’s effort to fight inflation along with the war in Ukraine. 

“All bets are off if supply chains have major problems. That’s the number one wild card.”

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EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today!  

Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/ 

Home Maintenance 101

Owning a home is a constant responsibility. Upkeep includes aesthetics, but it’s essential not to overlook smaller, less-noticeable aspects of home maintenance as well. For first-time homebuyers, home maintenance might feel somewhat overwhelming. Where do you start? Look no further.

Monthly

Each month, you can do some easy and inexpensive tasks to prevent extensive maintenance and costly repairs down the road.

  • Check carbon monoxide detectors
  • Test smoke detectors
  • Wash the hood of your stovetop range
  • Clean furnace filters and replace them every three months
  • Unclog or clean the drains in your sinks
  • Inspect toilets and sinks for any leaks

Seasonally

Imperative to maintaining a quality, well-kept home, the changing seasons are a natural reminder to stay on task with these chores.

  • Spring and Summer
    • Clear dead foliage, weeds, and debris from the yard
    • Prune trees
    • Clean gutters by removing debris
    • Sweep patios or decks and look for signs of cracked wood or loose nails
    • Examine exterior siding
    • Power wash your driveway, sidewalk, patio, or deck
    • Dust the garage floor and walls with a broom or leaf blower
    • Ensure your sump pump is draining properly
  • Fall and Winter
    • Winterize your air conditioners
    • Check and clean your fireplace and chimney
    • Unhook your outdoor hose to prevent damage from freezing
    • Remove/store window screens and install storm windows
    • Check radiators and surrounding pipes for leaks or cracks

Annually

Each year, doing these tasks will help keep your home in tip-top shape. If you follow this checklist sooner than later, it will save you from accruing considerable expenses in the future.

  • Ensure the dryer vent is correctly discharging outside and remove lint buildup
  • Drain the water heater tank
  • If you have a septic tank, ensure it’s clean
  • Look for termites or bugs congregating near or within your home
  • Clean your bathroom exhaust fan to remove dust
  • Inspect your roof

Long-Term

Several home elements will sustain wear-and-tear throughout the years, eventually requiring repair or replacement. The list might include:

  • Replacing garage door openers
  • Resealing grout in the kitchen or bathrooms
  • Replacing caulk around windows or doors
  • Cleaning heating ducts
  • Replacing old appliances

It’s imperative to pay attention to these small yet critical factors and address them as they arise to avoid dealing with a substantial bill later down the line. Owning a home isn’t always smooth sailing, but the joys and long-term rewards make it worthwhile. Between growing equity or taking pride in your home, a well-executed maintenance schedule can help you decrease costs for years to come.

We can help you refinance or purchase a new home – contact us today to learn more.

EB Mortgage is a locally-owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us at 866-246-0516 or e-mail contact@ebwmtg.com today.

Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.