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What you don’t know about your credit CAN hurt you!

Thinking about owning a home, but concerned about your credit? Here are some tips and information to help you get and maintain the best credit possible.


How credit and credit scores affect a mortgage borrower

If you haven’t looked at your credit report recently, it is definitely worth doing so. Knowing what’s on your credit report can potentially save you thousands of dollars if you plan to purchase and finance real estate soon. Mistakes, errors and unknown negative items can cause your credit score to drop, potentially exposing you to higher interest rates, delayed or even declined mortgage financing. Correcting errors and disputing things on your credit report can take time and effort, so it pays to start early and not wait until you are under contract to purchase a home.


What is credit scoring?

Credit scoring is a way lenders and other industries determine a potential borrower’s credit-worthiness and the likelihood of repayment. Fair, Isaac and Co (FICO) pioneered the concept of credit scoring in 1956, and is still the industry’s leading source for credit scoring. The numerical FICO score ranges from 300-850, and is based on factors including payment history, debt utilization, length of credit history, types of credit and number of credit inquiries, among other factors. The higher your FICO score, the more likely you are to be approved for a loan, and the better interest rate you’ll get. The following image shows the main five factors and their respective weights.

The biggest factor is your payment history. Consistently making your consumer debt payments on time is the best thing you can do to maintain great credit. Late payments, collections, charge-offs and judgments or liens can really damage your credit. The next factor is the amount of consumer debt owed, and the percentage of your revolving debt limits that is currently outstanding. Try not to let your revolving credit accounts get “maxed out”, as that really lowers your credit score. Try to keep your outstanding balances below 30% of the maximum limit if possible, and paying the entire balance off monthly will minimize your interest expense too .


The next three factors carry less weight than the first two, but are still important. The length of time you’ve had credit is important, so consider keeping older, well-established credit lines and accounts, rather than closing them. They will help your credit profile to show historic “depth”. The types and balance of credit also affects your score. Lastly, the number of inquiries into your credit and excessive applications for new credit can bring your scores down. Don’t worry about multiple credit pulls from similar providers when shopping for big ticket items like a mortgage or vehicle. The FICO scoring software counts multiple credit pulls from the same type of lender within a short period of time (typically 30 days) as one inquiry.


The three national credit repositories, Equifax, TransUnion and Experian all have slightly different formulas and weights they assign to the various factors. Consumers will typically have 3 FICO scores: one from each of the national credit bureaus. Conventional and government mortgage lenders use the lowest middle FICO score of the applicants as the “official” score for qualifying purposes. They set minimum FICO scores, with most conventional loan products requiring a minimum score of 620-640, and some government mortgage loan programs going as low as 580-600.  If you plan to purchase a home in the near future and get a mortgage, it is well worth the time and effort to make sure your credit score is as high as possible.


We here at Everist Mortgage want to help you get the best mortgage financing terms possible, and help you get prepared to buy and finance a home. Getting pre-approved before you start shopping for a home can help you find out if there are any errors or unkown negative items on your credit when we have enough time to help you dispute and remove them. While we are not a credit repair company, we have the experience of looking at thousands of credit reports over the years, and know how to counsel you on creative ways to improve your credit. We also have access to resources and contacts within the industry that can help you improve your credit strategically to position yourself for the best financing terms available when you’re ready to buy a home. Give us a call for a free, no-obligation consultation about your credit and financing options. It will be well worth your time!

Images courtesy of www.café, C license 2.0, some rights reserved

3 Reasons to Invest in Real Estate Now

The Austin/Central Texas area has gotten a lot of national press lately about being one of the most sought-after places in the country. With a net gain of 159 people per day moving into the Austin area, we’re one of the fastest growing metro areas of our size in the nation. Depending on your perspective and position, that can be a good thing or a bad thing.

It’s no secret that the real estate market here is red hot, and prices are rising. Many younger people and renters are feeling squeezed, as rents and occupancy rates are rising, forcing many to pay more and more of their monthly budget toward housing.

Local Austin expert Jonathan Sempsrott of Keyrenter Property Management states that the average rent in Austin is approximately $1,750 per month, up 3-5% from 2016. Occupancy rates are now 94%, with renters scrambling to find availability and landlords able to cherry pick their tenants and rental rates.

Now is a great time for renters, first time home buyers and investors to take advantage of the many benefits of owning real estate. For the same $1,750 average price of rent in Austin, you could make the payment on a $225,000 home with a small 5% down payment!

Here are just 3 great reasons to consider buying a home now:

  1. Make the rising prices work for you, not against you: By owning a home, rising values will be working for you. You will be building equity in your home as the values go up, while being able to protect yourself from rising rents. Owning a $250,000 home that appreciates 5% per year will build equity of $12,500+ per year! Whether you are buying your first home, a vacation home or an investment property, this equity appreciation will yield great returns over time.
  2. Interest rates are good right now, and may be heading up soon: Average 30 year fixed mortgage rates are in the 4% range for borrowers with great credit. This is excellent and very low compared to historic levels. With a growing national economy and stock market, mortgage rates are poised to rise by the end of the year. Major national bond market buyers Fannie Mae and Freddie Mac have indicated they may begin to slow down or stop buying mortgage-backed securities in the near future. As they now buy $20-40 billion per month, their slowing or exit from the market could translate to mortgage rates rising .375-.5% by the end of 2017. Locking in on a low fixed rate mortgage will protect you against rising rates and housing costs
  3. You may not need as much cash as you think you do to buy: I have talked with many people who think they need 20+% cash to buy a home. Unless you are an investor buying a rental property, this is not the case. We have many low down payment mortgage options available, including zero down options for military veterans or those that want to live just outside the city limits. We have conventional and government financing options with down payment options as low as 3-3.5%, and some of these programs allow for family members to help you with the down payment. There are creative ways to have some or all of your closing costs paid for you, and ways to minimize the total cash investment of getting into a home.

For these and many other reasons, now is a great time to buy real estate!

Give our office a call for a free, personalized assessment to find out what options are available to you. My team and I look forward to helping you and those you know in any way we can.

Everist Mortgage Wins Texas Monthly Magazine/Five Star Mortgage Professional Award for 6th Year


Thank you for your support!


The Everist Mortgage team is very grateful and thankful to our clients, referral sources and industry partners to have been chosen again (for the 6th year) for this prestigious award.  Five Star is the largest, most-widely published market research/award firm for mortgage professionals in North America, covering over 40 major markets in the USA and partnering locally with Texas Monthly Magazine.


This is not a paid award, and must be earned by the votes and recommendations of our clients, referral and industry partners who have directly worked with us. Surveys of thousands of Central Texas home buyers and consumers rank their home buying and mortgage financing experience based on five criteria: customer service, integrity, communication, preparation and attention to detail and overall satisfaction.


Out of approximately 8,500 mortgage originators in the Austin/Central Texas area, approximately 230 were chosen for this coveted award, representing only the top 3% of mortgage professionals in the area. Winners will be listed and featured in the June issue of Texas Monthly Magazine. For more information about this award and the methodology used, click here:


We could not have achieved this prestigious award without your help and support, and I want to thank you deeply for your ongoing support, business and referrals. We are here to help, and I look forward to being your go-to source for all your mortgage financing needs!


Is rolling back Dodd Frank really a good idea?


Has the Consumer Financial Protection Bureau (CFPB) gone overboard with mortgage regulations?


I have been helping families get great home loans throughout Texas for over 23 years. While the process my clients have to go through to get a home loan has never been easy, I have noticed that it has gotten increasingly difficult for them and me over the past 7 years or so.


Even during the years of easier credit and more flexible underwriting prior to 2007 and 2008, I always made sure my clients could afford their mortgages and that they knew all the terms and details of the home loan package they were getting. When the national housing and mortgage crisis hit and the industry changed, I agreed (and still do) that the national lending environment had gotten too loose, and needed reigning in with some reforms and more conservative guidelines.


However, the resulting federal agency that was created out of the Dodd Frank reform, the Consumer Financial Protection Agency (CFPB), turned out to swing the pendulum way too far in the other direction in my opinion. Over the next 7 years, this agency has grown in size, power and authority, answering to nobody, not Congress, not even the President. The agency’s top executive , Richard Cordray, has been described as the “2nd most powerful man in the government”, behind only the President himself. Banks and lenders have been sued and fined by the CFPB for various violations and missteps over $5 Billion so far. Despite many pleas by the industry for clear rules and direction from the federal agency on how lenders should operate, the CFPB largely guided the industry via “regulation through enforcement”, levying fines and penalties against banks and lenders to send a message to everyone else.


The message has been heard loud and clear, but it may not be the message that consumers want to hear. Easy as it is to point the finger of blame for the nation’s recession on big banks and Wall Street and cheer as punching bags like Wells Fargo get hit time and time again with fines over hundreds of millions of dollars, the net result has been a severe tightening of consumer credit in the marketplace. Banks and lenders have drastically pulled back in making loans, fearing the risk of making any mistakes that might result in having to buy back loans or pay penalties or fines they deem arbitrary.


Many lenders have chosen to get completely out of the mortgage lending industry, and those that are still lending are much stricter on consumers’ credit and financial qualifications. The cost to originate a mortgage loan has skyrocketed, due primarily to the high cost of regulatory compliance. Recent studies show the average cost to produce a mortgage today is approximately $8,000, with a large percentage of that for regulatory compliance. These rising costs cause the consumer to pay more for a mortgage. The national average time it takes to close a mortgage loan is 52 days, and the average conventional borrower FICO score is 726. This has left many deserving and qualified potential homeowners left out of the credit market.


While I agree that the lending industry must be regulated and lenders must operate within the boundaries of prudence and good sense, the pendulum needs to swing back toward the middle a bit. Home ownership is at a 50 year low right now, with only 62% of Americans owning their home. Millennials are the largest demographic of our population, and many of them fear that owning a home will be out of their reach. The current administration has talked of reducing regulation and restructuring the CFPB in a way to make it more accountable to the government, both of which could be good news for consumers.


President Trump, Congress and new Treasury pick Steve Mnuchin are all looking at easing the government regulatory burden on the lending industry, and I believe this would be a good thing for consumers and homebuyers. The executive order signed last Friday by President Trump to roll back the Dodd Frank Act will bring this issue to the forefront. We will be watching the developments on this and putting out updates in the future.

2017 Housing and Mortgage Outlook Series

What to expect for housing and mortgage in 2017

Are you thinking of buying or financing a home this year? Wondering what impact the recent administration change will have on real estate and mortgage financing? What about the outlook for 2017 here in Central Texas?

I will be addressing some of these questions and more in this and future editions of my email newsletter and blog.  You will receive valuable information and commentary on questions such as:

  • What is the forecast for the Central Texas Real Estate market – is now a good time to buy?
  • What are interest rates expected to do this year – should I refinance?
  • What if I have bruised credit and need some help preparing to buy a home this year?
  • What is the Trump administration planning regarding mortgage regulation, Dodd Frank and the Consumer Finance Protection Bureau?
  • What should we expect from Ben Carson in his new role at HUD, and what happened with the rollback of the FHA mortgage insurance?
  • What is all the talk about possibly restructuring Fannie Mae and Freddie Mac – what will that do to the housing market?

Answers and comments to these questions and more will be coming soon in upcoming segments from Everist Mortgage. Stay tuned and let me know what other questions or topics you’d like to know more about. The good news is that this year is shaping up to be a strong and healthy one in the Central Texas real estate market, and projections are optimistic. Rates are very low right now, and I’d love to help you or someone you know with a personalized assessment of options. Please give me a call or email if I can help!

Happy holidays from the team at Everist Mortgage

As 2016 winds down and we prepare for the holidays and a new year to begin, my heart is very full and grateful.


The year has been an amazing one filled with many wonderful things, including my 1st full year of marriage to my amazing wife Nancy, some great trips and adventures with her, my new stepdaughter and her husband, my two boys and even my parents to Colorado, Missouri and other fun destinations.


My boys are older now and launching into manhood and independence. It’s been bittersweet to watch them grow up and become adults, but also rewarding to see them become self-sufficient in many ways and take charge of their lives and destinies.


Everist Mortgage has remained successful, and I’ve had the opportunity to meet and help many great clients; some past clients I’ve known for years, and some new ones that were referred to us.


Austin, Texas continues to grow, and be one of the hottest destinations in the country for people that want to move here.  While it’s bad for traffic, it’s good for my business!


As I look back on the past year and forward to the new one, I have some regrets and things I wish I’d done differently, but for the most part I’m content and happy with the direction of my life and business. Faith in God is a big part of my life, and I’m trusting in my Abba Father to lead me in these coming days where He wants me to go both in my business and personal life.


I look forward to meeting and helping lots of new families this coming year and beyond!

Curious about loan limits for 2017? We’ve got them here for you

As we near the end of 2016 and look toward the new year of 2017, the mortgage lending industry is undergoing some changes, and Central Texas is still a very hot real estate market.


Here are of couple of updates that are important to know if you or someone you know will be looking to purchase or finance a home in the near future:


  • Increasing loan limits: With increasing conventional and FHA loan limits coming next year, more opportunities for homebuyer and borrowers will be available. Here are the new loan limits for 2017:

Conventional loan limits:

  1. 1 unit: $424,100
  2. 2 units: $543,000
  3. 3 units: $656,350
  4. 4 units: $Z815,650

FHA loan limits (For the Austin Metropolitan area)

  1. 1 unit: $361,100
  2. 2 units: $462,250
  3. 3 units: $558,750
  4. 4 units: $694,400


  • Rising values and prices in the Austin area: The Austin area continues to be a very hot real estate market, with the median sales price in Austin approximately $345,000. The median price for the 5 county Austin MSA area is approximately $275,250. Sales are up over 11% over this time last year, and new home starts last month were over 4,000! This means it’s even more important to get pre-approved for a mortgage before you go out shopping for a home. Sellers in a hot market won’t take your offer seriously if it’s not accompanied by a strong letter of pre-approval from a reputable (preferable local) mortgage lender.


If you have questions about the pre-approval process, or any questions about the Austin and Central Texas market, don’t hesitate to reach out to us for a free 30-minute consultation.


Happy holidays!

Michael and the Everist Mortgage team

Welcome to our new Everist Mortgage website and blog!

We’re so happy to have the new site up and running, with many improvements and more helpful information and features for our clients. Improvements and added features are coming soon as well.


The new site is designed to make it easy for you to navigate. You can receive helpful information about the mortgage process, get answers to frequently asked questions, run calculators and preliminary estimates, sign up for our newsletter, start your online application process and soon securely upload financial documents needed for your loan approval!


Michael and the Everist Mortgage team have over 23 years of mortgage lending experience in Central Texas, and have helped thousands of individuals and families successfully finance their homes.


Feel free to explore the site and let us know how we can help you.


Our business depends on word-of-mouth recommendations and referrals from our happy clients, so we want to earn your trust and business relationship as well. Future and ongoing blog posts will cover new developments in the mortgage and lending industry, latest things happening at Everist Mortgage, as well as personal stories from Michael and the team.


We look forward to having you back soon!