What you need to know about flipping houses in San Antonio

If any of you are like me, you have probably come across one of the seemingly hundreds of do it yourself (DIY) or house flipping TV shows that seem to have popped up overnight. The question is why do people get into growing trend; is it for the money or do they get some thrill out of the experience? A common theme in many of these shows is that if you find the right home you can make a hefty sum of money seemingly overnight. Let's be honest though, they are filming this entire process that takes weeks if, not months and are cutting it down to mere 30 or 60 minute segments. I am not saying that they do not make decent money on some of those properties, however if they are paying cash for it then they are in a situation many are not. If they are, on the other hand, not paying cash and using debt to finance it they are playing a dangerous game in which they could lose everything. So what's an ordinary person supposed to do in this situation? When one cannot afford to pay cash for a home and repairs but also isn't willing to finance an investment property? As your San Antonio Realtor I would offer you some alternatives; there is the obvious solution of don't do it and leave it to the pros, but then what fun is that. Maybe you could find some willing and able investor to front the money, but unless you are going to do all the work yourself then the said investor does not have much use for you. The safest alternative would be to go against the urge that screams "I want instant satisfaction" and start at your house. What better place than your home to try your handyman skills out and see if you are ready for the big flip. It can be a win-win of you select the right projects that will add value to your home. As a San Antonio Realtor I can give you ideas that will not only gain you equity but also experience, both of which will have the potential to pay off in the log run. The beauty of it is that there are plenty of resources for those willing to go to it alone, Home Depot offers classes, there are literally hundreds of blogs and then there is YouTube. With a little skill, the right tools and some determination you really can make a world of difference in your current home. There is a wealth of knowledge out there that is at your fingertips all you have to do is "search". Start on pinterest, you can literally find thousands of ideas with the click of a mouse. If you are serious about breaking into the real estate investment world then I would start reading on bigger pockets, it has a vast amount of information on the subject.  As always if you need a free consultation with a San Antonio Realtor I offer that as a service to homeowners with no obligation. photo credit

Want the power back? Learn how with these credit score basics

There is so much stress put on the credit score and what that means to your ability to qualify for a mortgage. Some people are even led to believe they can't buy without a particular credit score. As a San Antonio Realtor there are three things I suggest my clients think about when considering if their credit score will qualify them for a mortgage. What is the industry standard for a credit score, what is my bad score due to and what do I do if I have a bad score due to lack of credit history?

• Firstly, what is the industry standard when it comes to a mortgage worthy credit score? The industry standard for a typical credit score is 620 or better. However, this number changes based off the type of loan you are trying to qualify for as well as the individual lenders. What this score means is that you are or are not worth the risk that the bank is going to be taking by giving you a mortgage. Every lender is different but if your score is below 600 then there is a slim chance you will get a loan.

• The second thing to consider is why your credit score is bad? Is it due to a lack of history or a history of late payments, missed payments and/or collections? If your score is low due to negative marks against your credit, then you will need to get it above the mark for the loan your trying to get. Some simple things to do if you're trying to get your score up. Paying your credit cards down to below 50% of the available balance will help. If your balance is zero and stays zero, it doesn't improve your score, so put a tank of gas or charge something small every month. Don't immediately pay it off though, wait till you get your bill then pay it off and keep doing this every month...but don't be late! 

• Finally, we come to the hidden gem of this post, what to do if your score is low due to lack of history. There is a process out there that is built just for you and its called Manual underwriting. It is likely a term that you have never heard and what it means is that your ability to get a mortgage will be determined by a person. They will manually screen you on the list of factors other than credit score. This means coming up with at least four alternatives to prove your worthiness. These options could include something as simple as the history of paying your rent on time. If you have an electric bill, water bill, phone bill or insurance bills and can prove that you have paid them on time for a period of 12 months then they may qualify as substitutes. It is likely to be a more time-consuming process than merely getting qualified off of a credit score however, it is still a very viable possibility.

So whether you are attempting to qualify off your credit score or an alternative, there are options for you. If your credit score is low and you are trying to get it up, doing some of the things on this list may help you. If you have a lack of credit history then find a lender that does manual underwriting and tell them, you want to qualify without a credit score. If they don’t know what that is or tell you it is impossible then they are not the company for you.

As a San Antonio Realtor and not a mortgage professional nothing in this blog is intended as statement of fact. All content is for informational purposes only, consult a mortgage professional for the details of your particular situation.

How to get a home with bad credit!

There is so much stress put on the credit score and what that means to your ability to qualify for a mortgage. Some people believe they can't buy without a particular credit score. There are three things to think about when considering whether your credit score will qualify you for a mortgage. What is the industry standard for a credit score, what is my bad score due to and what to do if I have a bad score due to lack of credit history.

• Firstly, what is the industry standard when it comes to a mortgage worthy credit score? The industry standard for a typical credit score is 640 or better. However, this number changes based off the type of loan you are trying to qualify for as well as the individual lenders. What this score means is that you are or are not worth the risk that the bank is going to be taking by giving you a mortgage.

• The second thing to consider is why your credit score is bad? Is it due to a lack of history or a history of late payments, missed payments and/or collections? If your score is low due to negative marks against your credit then, you will need to get it above the mark for the loan your trying to get. There are simple things to do if you're trying to get your score up, such as paying your credit cards down to below 50% of the available balance. If your balance is zero and stays zero, it doesn't improve your score, so put a tank of gas or charge something small every month. Don't immediately pay it off though, wait till you get your bill then pay it off and keep doing this every month.

• Finally, we come to the hidden gem of this post, what to do if your score is due to a lack of history. There is a process designed specifically for this situation, which is called Manual underwriting. It is likely a term that you have never heard of but it simply means that your ability to get a mortgage will be determined by a person. They will manually screen you on a list of factors; other than credit score. This means coming up with at least four alternatives to prove your worthiness. These options can include something as simple as a history of paying your rent on time. If you have an electric bill, water bill, phone bill or insurance bills and can prove that you have paid them on time for a period of 12 months, then they may qualify as substitutes. It is likely to be a more time-consuming process than merely getting qualified off of a credit score however, it is still a very viable possibility.

Michael Mershon REALTOR