Home Buyers, real estate tips

HOA: A convenience or hindrance?

Home Owners Associations. Some people started clenching their fists just by reading those three words, while others completely embrace the opportunity to have one! I have lived in homes with an HOA and also lived in some without an HOA; I can certainly see both sides of the good and the ugly! Not every part of the country is as familiar with HOAs, but they are very common in new build developments or suburban community neighborhoods. If you are looking to purchase a home, make sure you understand which HOA governs the home, who manages it and how much they charge for dues or fees. The fee amounts need to be considered if you are using financing to purchase the home, however, often you need to pay the HOA separately from your mortgage payment.

The advantage of having an HOA is typically communal area maintenance, holding the neighborhood to a set of standards including curb appeal, every so often playing a part in the safety of the neighborhood, and can sometimes jointly share pay electricity or trash bills. If the neighborhood has parks, pools, recreational activities or other communal benefits, most likely the HOA is cleaning and maintaining all these areas. Having an HOA can certainly make for maintenance free living and beautiful neighborhoods!

The downside to having an HOA would be the fees and dues they need to operate. Some HOAs have expensive monthly dues, transfer fees, and capital improvement payments while others have fairly inexpensive dues and are very reasonable for the services they provide. Another drawback some homeowners feel when they live in a community with HOA, is the lack of freedom should you want to change anything about the exterior of your home. The HOA will have rules called Covenants, Conditions & Restrictions (CC&Rs) outlining their policies and guidelines to follow. These can include restrictions on paint colors, height limitations for home additions or renovations, landscaping changes, front yard belongings and more. These CC&Rs are intended to keep the cleanliness, safety, and impression of the community but some homeowners prefer the peace and freedom without an HOA.

Like most things in life, there are some good and some bad aspects to buying into an HOA. Ultimately, it is up to your preference and desire on where to own a home. Either way, make sure to do your research before buying a home and ask your real estate professional to help guide you through the process!

Find this article and others by Chianne Hewer at The Daily Tip Jar 

Home Buyers, real estate tips

Credit Misconception

Credit scoring and credit pulling often feels like a process that no one talks about the details. You can and should ask questions, though! Two very common misconceptions I hear from clients and others are concerns about different scores from different places and whether you can increase a credit score.

In order to understand how there can be multiple scores, first understand that there are different versions of credit scores. The biggest name is FICO and they calculate your score based on payment history, credit utilization, length of credit history, new credit and credit mix. This is unfortunately why not having any credit lines open can actually hurt your credit score. Each component weighs into an algorithm that spits out a score. One important aspect to note is that there are different formulas or scoring models that each industry needs to use. For example, when you apply for an auto loan they will weigh the components slightly differently than a mortgage company, or a credit card company. Why? Because they are loaning you money based on entirely different terms and for very different types of ‘items’ you are getting in return. They take your past behaviors into consideration based on the risk of what they’re lending.

Once you have reviewed or understood your credit score breakdown, you can then begin to increase or repair your score. Many are able to do this alone with discipline and changing of behaviors. You would need a very good understanding of what has hit your credit and a clear path to fix any issues. Others need help and hire credit repair companies who analyze your score and give you comprehensive steps to bring the score up based on the particular loan you’re trying to get approved. It all starts with understanding how it works and taking the time to review your score.

Don’t feel deflated about the credit rating system! It can seem complex but know that it carries a lot of weight when needing a loan, credit line, mortgage or rental agreement. The hard work put toward creating a healthy credit score can be worth it in the long run.  Decent or high FICO scores can often help with down payment assistance options for a home purchase, better interest rates, and more! Make sure to ask your lender or realtor for their preferred credit repair company.

Find this article and others by Chianne Hewer available on The Daily Tip Jar