Millions of consumers may soon see a boost to their credit scores, which could help when applying for a mortgage. One of the largest credit-reporting firms in the U.S., Experian PLC, announced it will give consumers the option to have their cellphone and utility payments factored into their credit scores early next year. About 46 million consumers who have limited credit data could instantly see an increase to their credit scores from the new data being added in, according to Experian.
Oliur – Unsplash
This marks the first time consumers will be able to have such data factored into their credit reports and scoring. It follows on the heels of several other changes. Fair Isaac Corp., the creator of the FICO credit score, will soon be launching a new credit score with Experian that will take into account a consumer’s history managing their checking and savings accounts. That move also could give consumers a boost to credit scores for those who at least keep several hundred dollars in their accounts and don’t overdraw.
Also, all three major credit reporting firms—Experian, Equifax, and TransUnion—have all recently removed negative information, like tax liens and judgments, from consumers’ credit reports. This move has also helped lift many consumers’ credit scores.
Experian’s latest change, named Experian Boost, will allow consumers to opt in and link the bank accounts they use to pay their phone and utility providers to Experian. The company can then track their monthly payments to utilities, cellphone, and landline phone and cable TV accounts. It will not track missed payments, according to The Wall Street Journal. Experian will delete the account from its credit report if consumers stop paying their bills for three consecutive months from the accounts linked to Experian Boost. Consumers’ scores will then be recalculated without the additional account. In such cases, that could then cause a drop to the credit score.
While people focus on spending time with family and friends, shopping for gifts, and traveling during the holiday season, it’s also important for them to pay attention to keeping their homes safe.
Without putting a damper on the holiday spirit, here are some simple precautions from Brian Collins, a writer for Hippo, an InsurTech company, that you can share with your clients.
Track all your online orders and make sure you’re aware of delivery times and days. Do your best to be home to receive packages when they are scheduled to arrive.
Even when you’re home, it’s wise to keep all doors locked.
Keep in mind that gifts under the tree can attract thieves. If you do put gifts out, keep them away from windows.
Burn or cut up packaging for expensive gifts before discarding it. Some thieves will dig through trash for clues about what valuables may be inside your home.
When shopping online, shop at websites you trust, create strong passwords for your accounts, pay with credit cards for more liability protection, and be very wary of email scams (don’t open attachments from people or businesses you don’t know).
Web-based security cameras are the best method to remotely monitor your home. You can see who is coming and going, when packages are delivered, and othre activity that occurs when you’re away.
Leave a key with a neighbor or make copies for family and friends instead of hiding it outside your home., where a would-be home invader might find it.
Don’t make announcements on social media that you will be leaving for the holidays.
Wait until you return home to make holiday-related posts online, and don’t post your location while you’re away.
Put your lights on a timer and have them turn on during hours when you would ordinarily be home, so your home doesn’t appear unoccupied.
Make sure mail and packages are held for you until your return.
Record the make, model and serial number of your valuables (artwork, electronics, firearms, etc.) and photograph or make a video log of your jewelry and other important belongings. Stolen property is much easier to recover if you have solid identifying information.
Tell a neighbor or friend when you’re going to be out of town, and have them drop by to check on your home.
Keep a close eye on your oven and stove when cooking.
If possible, opt for a freshly cut Christmas tree, since natural trees are more fire-resistant than artificial ones. Also, be sure to keep your tree watered and away from open flames, radiators, or space heaters. If you’re shopping for an artificial tree, make sure it is labeled as “fire-resistant.” Never use candles to decorate Christmas trees.
Avoid putting wrapping paper, which can ignite suddenly and burn intensely, in your fireplace.
Ensure your flue is open before igniting a fire, and remove any decorations from around the fireplace.
Test your smoke alarms and keep exits from your home clear.
Don’t overload your circuit breaker or extension cords.
When you leave the house or go to bed, turn off all your holiday lights to avoid a potential fire.
The Federal Housing Administration has announced that most of the country will see an increase to loan limits in the new year. The loan limit for lower-cost areas will be set at $314,827—or 65 percent of the national conforming loan limit of $484,350. In high-cost areas, the new FHA limit for 2019 will increase to $726,525, up from $679,650. The new loan limits will take effect Jan. 1.
The FHA sets single-family forward loan limits at 115 percent of median home prices, which is subject to a ceiling on limits. For the past few years, the FHA has been increasing loan limits in a greater number of counties. In 2016, the FHA raised loan limits for 188 counties. In 2019, 3,053 counties will see an uptick in FHA loan limits. View the FHA’s letter on 2019 forward mortgage limits.
“The response to the recent decline in mortgage rates is already being felt in the housing market,” says Sam Khater, Freddie Mac’s chief economist. “After declining for six consecutive months, existing home sales finally rose in October and November and are essentially at the same level as during the summer months. This modest rebound in sales indicates that home buyers are very sensitive to mortgage rate changes—and given the further drop in rates we’ve seen this month, we expect to see a modest rebound in home sales as well.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 20:
30-year fixed-rate mortgages: averaged 4.62 percent, with an average 0.4 point, dropping slightly from last week’s 4.63 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
15-year fixed-rate mortgages: averaged 4.07 percent, with an average 0.4 point, unchanged from last week. A year ago, 15-year rates averaged 3.38 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.98 percent, with an average 0.3 point, falling from last week’s 4.04 percent average. A year ago, 5-year ARMs averaged 3.39 percent.
Home buyers are bringing more money to the closing table. The median down payment on single-family homes and condos purchased with financing in the third quarter was $20,250—up 7 percent from the previous quarter. The median down payment as a percentage of the median home sales price was 7.6 percent in the third quarter—the highest percentage since the fourth quarter of 2003, according to ATTOM Data Solutions, a real estate data provider.
Among the 96 metro areas ATTOM tracked, the cities with the highest median down payments as a percentage of the median home sales price were:
Buying a home that was too small is the biggest regret among first-time home buyers, according to a new survey by Porch.com, based on about 1,000 surveyed consumers about their mistakes when buying a home. Not saving enough money before buying is another main concern cited in the survey.
The first-time buyers surveyed, on average, went over budget by $3,615 in their first year of homeownership. Within their first-home budget, they spent the most money on new appliances, a new roof, a new furnace or air conditioning, and landscaping. Forty-eight percent of first-time buyers said they did not set aside enough money for their first year of ownership.
“Purchasing a first home is not only expensive but can be emotionally exhausting,” Porch.com researchers note in the study. After a home purchase—despite a few regrets—most buyers, however, are satisfied with their purchase, the survey found. Baby boomers were the most satisfied with the purchase of their first home at 22 percent, followed by millennials and Generation Xers at 17 and 15 percent respectively. More buyers said they were “mostly satisfied” (47 percent for baby boomers; 53 percent for Generation X; and 49 percent for millennials).
National homebuilder Taylor Morrison has its eye on pastels, unique finishes, and floral touches in the upcoming new year. The builder says it will be incorporating some of the freshly spotted hottest home design trends into its model homes that are set to debut in 2019.
Some of those home design trends that it expects to make a splash with home buyers in the new year are:
1. Pastels and jewel tones: Baby blues, mint greens, and blushing pinks will gain popularity in 2019, according to the homebuilder. “We’re calling these the ‘ice cream cone’ colors,” says Lee Crowder, design gallery and model home branding manager for Taylor Morrison and Darling Homes in Houston and Dallas. “But if pastels aren’t for you, bold jewel tones like emerald and sapphire are another popular option for the new year.”
2. Monochromatic schemes: The builder also picks high-contrast, monochromatic designs as a go-to trend for 2019, particularly in the kitchen. “Pairing dark finishes with stark white or gray cabinets will be a very popular look in the new year,” says Brittany Wightman, a Taylor Morrison design consultant in Charlotte, N.C.
3. Florals: “We’re seeing tons of floral patterns inspired by [fashion] runway looks,” Crowder says. “Florals are a top trend in the fashion world right now, so it makes sense that floral wallpaper is making a comeback.”
4. New finishes: Hardware finishes like black, rose gold, and brass are gaining popularity, according to the builder. “Black is a really important color for 2019, and you’ll be seeing it pop up everywhere—from countertops to hardware and faucets,” Crowder says.
5. Healthy homes: Healthy lifestyles that are also reflected throughout the home’s design is also trending, Crowder says. “While there are a lot of different ways to achieve this look, one must-have is an abundance of plants,” Crowder says. “Bringing touches from the outdoors inside is not only an aesthetic choice, but real plants also provide the benefit of filtering the harmful chemicals out of your home.” Crowder also suggests swapping out hardwood for dust-collecting carpet and switching out high-gloss paint for flat finishes (since there are fewer chemicals in them).
Starting in 2020, all new homes constructed in California will be required to have between 2 kilowatts and 3 kilowatts of electricity sourced directly from solar panels. State legislators, whom have been considering such a measure for some time, officially voted recently to amend state building codes. Other states are watching how the change plays out and may want to follow suit, California officials have said. “These provisions really are historic and will be a beacon of light for the rest of the country,” says Kent Sasaki, chair of the California Building Standards Commission. “It’s the beginning of substantial improvement in how we produce energy and reduce consumption of fossil fuels.”
The new mandate, however, won’t be cheap to homeowners. The upfront costs of installing typical solar panels ranges from $8,000 to $12,000. The timing of the move also worries residents who lost their homes in recent wildfires in California because the mandate will add to their rebuilding costs. “With median home prices in California already more than double the national average, this decision will make it even more difficult for the average Californian to afford a home,” California Assemblyman James Gallagher wrote in a recent letter to the Building Standards Commission.
But the commission says the extra costs, which will be applied to a homeowner’s mortgage, should be minimal over the life of the loan. In the case of a 30-year fixed rate mortgage, the additional cost amounts to an extra $40 per month—but the savings in monthly utility charges could be around $80 per month. The commission also says homeowners can lease solar panels instead of buying them up front.
Secured financing is the key to how many homeowners are paying for home upgrades, according to a new survey from home remodeling website Houzz and Bank of America. Owners who used secured financing were able to fund much larger home improvement projects, too, at nearly three times the median spending of those who paid for renovations with cash only ($32,000 versus $13,000), the study showed.
More homeowners are turning to the equity they’ve accumulated in their homes. Those with mortgages have seen their home equity more than double since 2011. HELOCs—home equity line of credit—are the most common form of secured financing. HELOC originations totaled $157 billion in 2017, which is more than 60 percent of consumer real estate–secured financing, according to the study. Consumers surveyed said the top motivations for using a HELOC were ease of use (39 percent), low cost (38 percent), quick access to funds (30 percent), and tax deductions (29 percent).
“Recent record gains in home equity give homeowners greater confidence to invest in their home, spurring growth in the more than $300 billion home improvement market,” says Nino Sitchinava, Houzz’s principal economist. “Our study confirms that a meaningful share of homeowners are tapping into it to fund large-scale renovations, such as kitchen and bathroom remodels. Secured loan originations will likely continue to grow in the near term as homeowners increasingly find it advantageous to stay put and renovate rather than trade up to a nicer home in an environment of tight housing inventories and higher interest rates, among other factors.”
Generation Xers are the most likely to finance renovations with a secured loan compared with any other generation. They represent 40 percent of renovating homeowners. Gen Xers also spend the most on renovations, reaching a median of $38,000 in 2017. Millennials and baby boomers each spent a median of $30,000 in 2017 on their home renovations.
“Homeowners, and Gen Xers in particular, are comfortable using their home’s equity to make renovations that can have a significant impact on their lives, increasing their home’s value and improving their comfort,” says David Doyle, senior vice president at Bank of America. “Using responsible financing options … homeowners are updating aging housing stock and improving their home lifestyle while still balancing other financial obligations.”
The study also found that most borrowers intend to pay off their secured loans within five years. However, one-third of surveyed consumers said they preferred six years or longer for their payment plans.
House hunters like to search for homes online during their workday, a new survey shows. The peak times for consumers to search for home listings are between 9 a.m. to 5 p.m. on the weekdays. The most popular time is Friday at 10 a.m., according to a new analysis from real estate brokerage Redfin.
“Searching for a new home is like a job. Maybe that’s why people most often do it while they work,” Redfin notes in its analysis.
Nearly 64 percent more consumers are on Redfin’s website at 10 a.m. on Fridays than any other time, according to the study. Following closely behind, the next most popular window is 11 a.m. on Mondays.
On the flip side, researchers found that weekday evenings are unpopular times to search for homes. Weekends also failed to come close to the weekday mid-morning rush of browsers, researchers note.
“One possible explanation is the popularity of weekends for hitting the pavement and touring homes in person rather than through a computer or smartphone screen,” Redfin notes. “Another reason could be the rise in real estate technology tools,” such as notifications that are sent when new homes meeting the person’s preferences hit the market or there’s a price change. The temptation to take a peek at the new listings may be too great when a consumer receives a notification while they’re sitting at work in front of their computer or phone at work.
