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Buying a home on two incomes can be difficult enough, but it can be even more demanding if one spouse has poor credit.

A poor credit score can make it difficult to qualify for a mortgage, leading to a higher interest rate on a home loan. A spouse with poor credit could be left off the loan application entirely, requiring the other person to have a high credit score and a high enough income to afford the loan on their own.

If a spouse with poor credit does qualify for a loan, the lender could require a bigger down payment on the house.

FHA loans, for example, which are backed by the federal government, require a 10 percent down payment with a FICO credit score lower than 580, while a credit score above 580 only requires a 3.5 percent down payment.

A credit score is just part of the financial background a lender looks into. Income and a debt-to-income ratio are also considered, though a high income by itself wont overcome a poor credit score.

Credit scores range from 500 to 850. A low score of 650 can be a predictor of making late loan payments, while a 550 score means youre not likely to pay at all.

A couples credit scores arent averaged together in a home loan application. Lenders will use the lower of the two credit scores. If a husband has a 620 score and the wife has 700, then the lower score will be used in the mortgage application and an interest rate of three-eighths to half a point higher will be charged.

Options for Those With Poor Credit

There are ways to get around one spouse having a low credit score. In the above example, the wife with the 700 credit score can get a home loan if she qualifies on her own.

Both spouses should be listed on the homes title or deed, but only she would be listed as the borrower. The husbands name could be added to the deed later when his credit score improves.

Buying a home on one income, however, can be difficult. The best solution is to improve the lower credit score, something that should be done months before applying for a loan.

In fact, a 10-point credit score improvement can be achieved quickly by paying down credit cards, which could be enough to get a better interest rate.

Even minor credit improvements such as closing all but one credit card can take 30 days or more to fix. Most fixes can take three to four months to show up on a credit report, so repairs should be made before applying for a loan.

Published with permission from RISMedia.

There are some obvious things that can hurt a credit score: paying your bills late, using too much available credit in proportion to your income, and defaulting on a loan. Some other financial transactions, however, don’t affect a credit score. You may even be surprised by them.

Here are five things that don’t affect a credit score, which is something you want to continue improving so that you’ll have access to the best mortgage rates and terms:

Income
Creditors and lenders obviously want you to have an income, and information about your employer may be listed on your credit report, but your actual income isn’t reported as part of a credit score.

Your income will be used to decide how much you can afford to borrow, but a high salary won’t boost your credit score, and a low salary won’t hurt it.

Overdrafts
Overdrawing your bank accounts can be costly, but they won’t hurt your credit score as long as you clear them before they go to collections.

If your account remains overdrawn for weeks and the bank sends it to a collections agency, you can expect your credit score to be dinged. It’s not the overdraft account that’s causing the credit score to drop, but the fact that it went to a debt collection agency.

Missed Insurance Payments
A credit score can be used by an insurance company to calculate your insurance premium, but your insurer won’t report your insurance premium payments”whether on time or late”to credit bureaus.

If you miss just one insurance payment, your insurance company could cancel the policy entirely or until payment is made. But it’s unlikely they’ll send it to a collections agency.

Checking Your Own Credit
You can check your credit report or score as much as you want without being penalized for it. Start at AnnualCreditReport.com for a free report each year from three of the major credit reporting agencies.

If a lender checks your credit score, such as when applying for new credit, that will likely hurt a credit score, though only a little and not for long. Too many queries in a short time could drop it a little more.

Credit Counseling
If you’ve sought help from a credit counselor to help manage your credit card payments, it may show up on your credit report. It won’t, however, hurt your credit score.

As long as your creditor is getting your payments on time”either through you or the credit counselor”the fact that you’re getting credit counseling won’t hurt your score. But if the payments arrive late, expect to see your credit score drop.

Published with permission from RISMedia.

Break-ins occur every day across the U.S., resulting in property damage, theft and, in some cases, injuries. The unfortunate reality is that anyone can become a victim; however, studies have found that criminals are much less likely to target homes with security systems.

Reasons to Get a Home Security System
Installing a security system could give you peace of mind. You would know that your home was protected, whether you were there or not, and that the police would be alerted if someone tried to break in.

A security system could also save you money. If thieves broke into your home and stole valuables, your homeowners insurance policy would cover the losses, but you would still have to pay a deductible, which could be several hundred dollars or more. If a laptop that contained financial documents were stolen, the burglars could use the information to commit identity theft”or sell it to other criminals for that purpose. They could open fraudulent accounts in your name, wreck your credit and prevent you from obtaining loans or credit cards that you needed. Thieves might also steal items that could not be replaced, such as family heirlooms or photos that were stored digitally.

Installing a security system could even help you save money on your homeowners insurance. The system would make your house less likely to be the target of a break-in, and your insurance company might reward you by lowering your premiums; therefore, the security system could pay for itself in whole or in part.

Which Type of Security System Should You Install?
There are two main kinds of home security systems: wired and wireless. Earlier security systems were wired directly to a landline and the homes electrical system.Not only is a wired system difficult to hack, but it’s also hard to remove and reinstall somewhere else, so it typically stays with a house when it’s sold. If you installed a wired security system and decided to put your house on the market in the future, it could be an attractive selling point.

A wireless system could be installed quickly, probably without professional assistance. If you chose to install a wireless system, you would likely be able to control and monitor it using a smartphone, which means you could let trusted individuals, such as family members, into your house and be able to keep an eye on your kids if they got home while you were still at work. In addition, you could take the wireless system with you if you were to move in the future.

Make Security a Priority
Regardless of where you live and how safe you think your neighborhood is, the truth is that crime can happen anywhere. Protecting your home with a security system can give you peace of mind and help you and your family avoid the financial costs and psychological trauma of being the victims of a crime.

Published with permission from RISMedia.

Homeowners insurance is supposed to cover catastrophes such as fires, hurricanes and a tree falling through the roof. But there are some much lesser problems that a typical insurance policy can cover.

Here are some of the surprising things covered by many home insurance policies. Check with your insurer first to see if youre covered for them:

Riot: Called a civil commotion by insurers, riots can include vandalism, fire and explosions, which are normally covered by home insurance. Having a state of emergency declared in your area because of rioting could make it easier to file a claim, as could a police report on damage to your home.

Volcano: If your home is in the path of an erupting volcano, your home is covered. Earthquake damage, however, isnt covered by most standard policies.

Dog bite: Up to $300,000 in medical care may be covered if your dog bites someone. Other claims, such as for pain and suffering in a civil lawsuit, may only be covered up to a certain amount or may require additional coverage.

Spoiled food: If a storm caused your power to go out and the food in your refrigerator is spoiled, your homeowners insurance should cover the cost of replacing the food. However, check if youll have to pay a deductible first and if its low enough to make filing a claim worthwhile.

Items stolen on vacation: Your belongings should be covered wherever you go by a homeowners policy, including on vacation under an off-premises provision. Had your laptop stolen in Lithuania? You should be covered. For more expensive items, such as a wedding ring, you may need to buy an additional rider to cover it.

Dorm theft: Just as your belongings are likely covered when youre on vacation, so are your childs things at college ” up to a point. A dorm room on campus may be covered by your homeowners policy, but off-campus housing may not be. The liability limits on a students belongings may be lower, so an expensive computer or bike may need to also be covered by renters insurance.

Gazebo: Your home is covered, and so is your entire property. This can include structures such as gazebos, storage sheds and patios. Tell your insurance company that you have such structures, and provide photos and other documentation such as work orders to show they exist and how much they cost.

Feel free to contact me for more real estate tips.

Published with permission from RISMedia.

According to a recent HomeAdvisor research report, Americans spent on average $564-$2,260 to install a home automation system, with prices ranging as high as $15,000 to install a hard-wired system. While outfitting your home with a full suite of smart home technology can be pricey and intimidating, there are some smaller ways you can start to incorporate this all-the-rage trend into your abode.

Smart home automation deals with syncing household devices and systems with schedules or responsive sensors, says HomeAdvisor, which means that smart home technology is dependent upon smartphone apps and wireless internet routers. The goal is to save on costs, and add convenience and security throughout your home.

A good place to start is with your thermostat. A variety of smart thermostats are available, allowing you to automate and control your homes temperature from your smartphone. Some, like Nest, learn your habits throughout the day and set the temperature accordingly.

You might also want to consider a smart television. An evolution of the Roku and Apple TV external devices, smart televisions have integrated everything you could ever want right into your set – Netflix, Hulu, YouTube, HBO Go, Pandora, network TV, gaming and much more.

Another great feature to consider is smart shades or blinds. These programmable, remote-controlled window coverings allow you to schedule open-and-close times in conjunction with the rooms exposure, putting you in control of energy saving and setting the mood.

Speaking of setting the mood, a whole host of smart light dimmers give you the option to control the lights in your home from your smartphone. This is an especially useful security feature while youre away from your home for extended periods of time.

Another great security option is smart smoke and carbon monoxide detectors”this technology alerts you to not only what the problem is but within which part of your home its happening.

While the smart home technology options are endless and fascinating, keep in mind that they are internet dependent, so if your home goes offline, so will your devices.

Like this update? As your local real estate professional, I can provide more great tips like this and answer any real estate information questions you may have. Contact me today!

Published with permission from RISMedia.