What Tacoma Buyers Need to Know About Credit

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When applying for a home loan, which is better: no credit or bad credit? This is a common question that I get from potential home buyers.

If you have bad credit, the bank can, at least, pull your records. They will see that you're going to be more of a liability than someone with good credit, but they can measure how much of a liability you will be. Bad credit will cost you more in interest, but you may still qualify for financing.

If you have no credit, there are absolutely no records for the bank to pull. You will be a mystery. Banks don't want to be the ones to find out if you are a liability or not, and, therefore, may not want to work with you.

If you don't have any credit, a simple way to build some is to open a credit card. I opened my very first credit card when I got into college. Even though I don't use it anymore, I keep the card open because the tradeline builds your credit and gives you a long credit history, building your credit score.

Ultimately, bad credit is better than no credit when it comes time to get a mortgage. If you have any questions for me, give me a call or send me an email. I would be happy to help you!

Tips for Paying Down Your Tacoma Home Mortgage

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Many clients ask, "When should I start aggressively paying down my mortgage?" Today, I'd like to give you some input.

First off, there is a huge difference between mortgage debt and other debt. In most cases, mortgage debt is considered a good debt. Other debt, like credit debt, is bad. If you have a car loan or student loans, those have higher interest rates than mortgages. You should pay down other debt before you start aggressively paying down your mortgage.

I also recommend setting money aside for an emergency fund. If you own a home, you're bound to have unexpected things take place. That's just part of homeownership. Make sure you have an emergency fund available. Don't spend it all paying the mortgage down.

Dave Ramsey is a great financial adviser. He writes about emergency funds. If you're interested, I would be happy to loan you one of his books.

In addition to that, you need to take other expenses into account. Maybe you need to set up a college fund for your kids, or your retirement fund needs some attention. Make sure those are taken care of before paying down your mortgage.

Ultimately, everyone's situation is different. Find the strategy that works best for you and go all in. I've got some great people on the mortgage lending side I'd be more than happy to connect you with, as well as financial planners. They can help you come up with a good, customized plan that works for you.

If you have any questions, give me a call or send me an email. I would be happy to help you!

Should You Trust Zillow’s Estimates?

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Today, we’ll talk about whether you should trust automated online home valuations, like the Zestimate on Zillow.

On a national level, Zillow’s valuations are off by an average of 5% to 15%, which isn’t bad. It’s not incredibly accurate, but it will give you a good idea of what you could sell for. However, their margin of error in Seattle is much greater. On their website, you can see that the Zestimates for Seattle have a margin of error of 22%!

So the simple answer is no, you can’t trust Zillow to give you an accurate valuation. The reality is there are so many things a computer can’t take into account when determining an accurate value of your home. What you need to do is contact a real estate professional that’s been through homes and knows the local market.

If there is anything I can do to help you , don’t hesitate to give me a call or send me an email. We will never be off by 22%, and we would love to be your resource for accurate real estate information.

What Do Rising Interest Rates Mean for the Pierce County Market?

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What's going on in the Pierce County Marketplace? This is a question we often receive toward the end of the year, so today we want to give you a quick rundown of recent trends.

In December of 2014, the median sale price was $235,000. This year, that price has increased 6% in our county, up to $249,000. This is on a pretty large scale; if we look at individual neighborhoods, on the other hand, the change in median sale price varies dramatically. Values vary depending on the area of the county you live in!

A good way to figure out how the market is doing is to take a look at the inventory, which is based on the principles of supply and demand. When there is zero to four months of inventory, we are in a market that is favorable for sellers. When there is five to six months worth of homes on the market, home prices vary with inflation and the market is neutral. If there is over seven months of inventory on the market, buyer's have the advantage and we often see declining home values. Last year at this time, we saw an inventory of 4.7 months. Now, that number has dropped to 2.5 months! This means we're in a very strong seller's market, and values are on the rise as a result of the high demand!

Days on market is another good marketplace indicator to take a look at. Last year at this time, the average days on market sat at 70 days. This year, we saw that number drop all the way down to 55 days. If you're looking to sell your home quickly, now is a fantastic time to do so!

Although all these current stats are favorable for sellers, buyers need not panic. Interest rates are incredibly low, which means lower monthly payments for you! If you wait, and interest rates increase by just 1%, your monthly payments will increase by 10%, which is obviously something you want to avoid.

Whether you're a buyer or a seller, we're here to help you make the most of current Pierce County market conditions. Give us a call or shoot us an email at any time, we would love to hear from you!