Are you ready to buy a Palm Beach home as a first-time homebuyer, or are you ready to move up to a more luxurious home in the Palm Beach real estate market? Now is the time to do it! Mortgage rates ended 2014 below 4 percent, but all major mortgage lenders are predicting rates to increase this year. The sooner you buy, the more you might save.

As a Palm Beach real estate agent, I’d like to suggest that one of the first steps you take to prepare for a Palm Beach home purchase is to improve your credit score. Higher credit scores tend to receive better mortgage loan options and rates. So even if you’re not ready to buy right this second, this is a step you can start right now!

Here are some tips from Credit.com on how you can improve your credit score this year:

1.  Check your credit report. You might already have a high credit score, in which case, you don’t have to improve it. It’s best to know what you’re beginning with.  It’s also important to review you report for errors, and then dispute them if you find any. You don’t want a mistakenly low score! You can receive one free credit report from each credit reporting agency per year.

2.  Lower your debt. This is an important one, because your debt-to-credit ratio is a huge factor in determining your credit score. Ideally, you want to pay off your credit card balance each time you use a card, and you want your debt no higher than 20 to 25 percent of your credit ratio. Find ways to lower your debt, such as selling things you no longer need, cooking and brewing your own coffee instead of eating out and purchasing coffee, and finding free events around Palm Beach for entertainment.

3.  Raise your limits. As contradicting as it might sound, having higher limits on your credit cards is a sign that you have good credit. Credit agencies look at that. if your levels are low, consider calling your credit card companies and seeing if you can get the limit lifted. This reduces your debt usage ratio. However, this doesn’t mean you should spend more so that you reach those limits!

4.  Pay on time. It is crucial to pay all of your bills on time. From your rent or mortgage payments, to your car, phone and insurance bills, paying bills on time accounts for about 35 percent of your score! Devise a planned schedule for sending out bills, or better yet, set up automatic bill payments so you don’t even have to think about it.

5.  Keep old cards around. Strangely, closing credit cards that you’ve had for a long time hurts your credit score. You’re better off keeping them open and not using them, or using them and paying them off each time you do.

When you’re ready to buy a Palm Beach home, contact me, your Palm Beach real estate agent! I am happy to answer questions and help you through the entire home-buying process.

Mary Hester
Real Estate Landings, LLC

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