Category Archives: Demographics

Single Woman’s Guide to a Mortgage-Worthy Credit Profile

Source:  / CreditCards.com

Research shows women often face challenges getting approved for home loans, and financial gender inequality may be to blame.

According to a study conducted by the Woodstock Institute, women are more likely than men to be denied mortgage loans. Typical reasons for mortgage denial include a high debt-to-limit ratio or a poor overall credit history.

The gender pay gap is a big reason why many women struggle for total financial independence. While the large-scale fight for gender equality is long and collaborative, there is something you can do to play a part: maintain a high credit score.

A strong credit score is important for financial equality

Your credit score is a tool lenders use to determine your trustworthiness when borrowing money and answer questions about your financial habits.  Will you max out your credit line? Will you pay your bills on time? Will you pay off your debt in full? Are you a high-risk or low-risk borrower?

Anytime you try to borrow money – whether on a credit card, small business loan, car loan or mortgage – your credit report and overall score will be reviewed to determine if you’re approved or denied and what your interest rate and credit limit will be.

A high credit score can also protect you (and your kids, if you have any) in case of divorce, a spouse’s death, or events that cause your spouse’s credit score to drop.

Gender roles in society have an effect on women and credit

Women sometimes have thin credit files due to traditional gender roles. An example is a household in which the husband is the family’s financial manager and applies for all credit cards and loans in his own name. In this case, his wife will not have an opportunity to build credit unless she obtains other credit lines in her name. If the husband dies or the couple divorces, the woman may find it difficult to strike out on her own.

A relatively low income – perhaps due to gender bias in a workplace – can also hamper a woman’s ability to build credit.

One of the most important factors lenders use to calculate your credit score is credit utilization. Credit utilization indicates how much of your total available credit you’re using. For example, if you have a card with a $2,000 limit and your balance is $1,000, you have a credit utilization ratio of 50 percent. The lower your utilization, the better your credit score will be.

Credit limits are often based in part on how much you are able to pay each month. So, since women typically make less than men (thanks, gender pay gap), that can result in a low credit limit, and a better chance of credit score damage from high utilization.

Establishing your own credit

If you have a thin credit file, there are a few ways to build it up:

  • Become an authorized user. If you don’t have any credit history to work with, you can start by becoming an additional cardholder or authorized user on a friend, family member or spouse’s card.
  • Apply for a secured or prepaid card. These cards are great starter cards for those who are worried about credit card debt, and they generally require no credit history to get approved. Just make sure the card you choose reports to one of the major credit reporting agencies.
  • Apply for a rewards credit cardIf you qualify, cards with no annual fee and a low APR can help you build credit with small purchases that you pay off each month. Plus, rewards cards help you earn points and miles that you can use towards travel or your monthly statement.

Preparing your credit before buying a home

Establishing credit isn’t enough to get a solid mortgage approval; your score must be strong, and your credit habits need to be healthy.

Here are a few ways you can make sure your credit profile is in great shape before you apply for a mortgage:

1.  Check your credit reports

A high credit score and a clean credit report can help you lock in a low interest rate. You can visit AnnualCreditReport.com to pull a copy of your report and look over it. You’re entitled to a free copy once a year from the three major credit bureaus – Experian, Equifax and TransUnion.

Review your reports for errors, no matter how small. Correcting these can help bump your score and ensure you have an accurate profile. All three bureaus handle report disputes online, which helps simplify the process.

2. Stay away from larger purchases and unnecessary credit lines

As you get closer to when you plan on applying for a home loan, avoid making large purchases and opening additional lines of credit. Experts advise limiting the number of hard inquiries into your account and keeping your credit profile “quiet” leading up to the homebuying process.

3. Reduce your utilization

Paying off debt (without draining your savings) can help boost your credit score, helping you land a better interest rate on your home loan.

Keeping your utilization low across your accounts is always a good credit habit to get into, whether you’re planning on buying a home or just want to stay financially healthy.

4. Improve your areas of credit weakness

Do you have a habit of forgetting to make payments on time? Set reminders on your phone or enroll in auto pay. Are you behind on any payments? Talk to your lender or card issuer about getting back on track. Did you find multiple errors on your credit reports? Make every effort to get those corrected.

Take the time you need to get your finances as healthy as possible before applying for that loan application. An extra six months to get your credit score up could mean the difference between being approved with a great interest rate and barely scraping by with a rate that will cost you an exorbitant amount of money down the line.

Protecting your credit

Your credit isn’t only important in the lead-up to buying a home. Credit scores are commonly used as an indicator for your overall financial health. Establishing strong credit habits and protecting your score can help you remain financially independent throughout your entire life.

Monitor your credit score for fluctuations and suspicious activity. Most card issuers have mobile apps, and many have built-in credit monitoring benefits for all cardholders. A lot of card issuers and banks allow you to set up purchase notifications, which can also help you stay on top of spending while watching out for fraudulent charges.

Another way you can protect your credit is by protecting your personal information. Never give out private information like usernames, passwords or account numbers over the phone or through email.

Finally, avoid using your credit cards more than is necessary. Pay them in full each month to avoid incurring interest charges and keep your credit score in good shape.  And maintain a savings account for emergencies and large purchases.

The bottom line

Building and maintaining a strong credit profile is important – both for future loan applications and overall financial gender equality. Make sure you’re putting your best foot forward for your future by establishing healthy credit habits, whether you’re a newly single divorcee looking to gain financial independence or a college graduate ready to make your mark on the world.

David Lafferty
CreditCards.com
9430 Research Blvd. | Building 4, Suite 400 | Austin, TX 78759

Seniors Can Reap Big Benefits in Downsizing

Source: Michael Longsdon  ElderFreedom.net

Seniors can reap big benefits in downsizing

There comes a certain time in many of our lives when we’re simply ready to move somewhere smaller. It could be because it’s becoming more difficult to manage a large property, the fact that the children have flown the coop, or even just because you want a change. There are numerous benefits to owning a smaller home, from ease of cleaning to being more energy-conscious.

Here is a guide to help you get started.

How to pack the household for transport

Packing for a weekend getaway is one thing, but packing your entire house is quite another. The first part, and often the most difficult, is going through your things and coming up with what you can say goodbye to. A smaller space will, unfortunately, mean less room for things. Start by either going through your clothes and letting go of possessions that don’t fit or don’t make you feel good about yourself, or things you’ve not worn in over a year.

You could also start in your kitchen and get rid of the gadgets you don’t use, or the pots that are too big or too small for practical use. Once you have completed your purge, think about packing a first-night box that’s full of stuff you will immediately need, from dinner supplies to your toothbrush and pajamas. For larger items, or if you simply have too much to do by yourself or with a partner, you may want to hire a company, not only to transport your items, but to pack them for you, too.

How to transition with pets

If you have pets, this is going to be a stressful experience for them. However, there are ways for you to mitigate their anxiety. If you stay calm through all the many stresses of moving, it will help your pet feel safe. If you introduce them to things slowly, it will help them as well. Take them for a few visits to the kennel where they will be staying during the move, introduce them to the new house or apartment before moving in, and get them crate-trained so they associate their crate with safety and comfort.

How to choose help

Research is going to be incredibly important during this time. First, you should consider working with an experienced real estate agent to help you sell your old place and buy your new home. Not only will they help you sell your current home more quickly, they will also be knowledgeable about home values in your current market (which currently average about $286K in Rainier, WA). This information will help you budget for your new home and all of your other moving expenses so you’ll stay on track financially.

You’ll also want a reliable moving company that is known for consistency and commitment to excellence. It’s one thing to get a recommendation from a friend, and that is often a good place to start, but you need to do a lot of digging. There are many websites you can visit to do some background checking, such as the Better Business Bureau, to get a few names. Once you have a few companies to pick from, get estimates and compare. It may be a lot of work, but it will be worth it to choose the best company possible for your budget.

How to take care of yourself

Moving is full of stress and uncertainty, so it’s extra important to take care of your own sense of well-being. Staying organized will help immensely when juggling the seemingly endless tasks ahead. Having a schedule will help keep you on track and succeed in keeping your blood pressure down. Once you arrive at your new home, get each room organized so that you can really start the settling-in process. Take your time unpacking each room, and as the moving boxes disappear, you’ll find that you are able to truly relax.

Balancing your schedule perfectly may not be enough to keep a level head, so find ways that work for you to relax. Whether it is working out every morning, doing yoga in the afternoon, reading your favorite or newest novel, or even taking a long, hot bath, do something to unwind and keep yourself sane.

Downsizing can seem intimidating, but it’s worth it if it makes your life easier. Fewer things to look after, smaller spaces to clean, and fewer stairs to navigate all can improve the quality of your life and open up more of your time to find things you enjoy. These truly are the golden years, and rather than spend them cleaning a large house you just don’t need, make time for yourself and your loved ones.

Image Courtesy of Pixabay.com

The Biggest Homeownership Hurdles for Millennials

Source: Liz Dominguez-RISMedia

Millennials should be making a sizable stamp in homeownership, but they have been largely absent from the housing space. Why is it that the largest generation in U.S. history isn’t participating in real estate as heavily as its predecessors? There are many difficulties standing in their way, according to new research.

A recent report by the Urban Institute, “Millennial Homeownership: Why Is It So Low, and How Can We Increase It?” delves deeper into the generational home-buying gap to assess the factors that are holding millennials back from their homeownership goals. When looking at the 25-34 age group, millennials are behind Gen Xers and baby boomers in homeownership rates by 8-9 percentage points, according to the report. When comparing overall homeownership rates in 2015, millennials were behind baby boomers by 42.8 percent and Gen Xers by 28.2 percent.

While factors such as parental wealth and creditworthiness play a role, there are more overarching influences on the millennial homeownership rate. The biggest obstacles?

Settling down is being pushed further out.
Millennials are delaying major life events such as marriage and childbearing. These milestones are typically associated with higher homeownership rates; in fact, the possibility of owning a home increases by 17.9 and 6.2 percentage points, respectively, for those who are married or have children.

According to the 2015 American Community Survey by the U.S. Census Bureau, 40 percent of millennials are married. This is 7.5 percent lower than the 2000 rate for similar age groups, and 13.8 percent lower than the 1990 rate. The average marriage age is being pushed out further out: Between 1990 and 2015, the proportion of 18- to 34-year-olds who never married increased by nearly 20 points to 53.9 percent. Many millennials are also waiting longer to have children. Between 1990 and 2015, the proportion of married households with children (with a household head age group of 18-34) decreased from 36.9 percent to 25.7 percent.

High student loan debt is tightening millennials’ wallets.
When compared to preceding generations, millennials are more likely to pursue higher education. According to 2015 rates, 65.8 percent of millennial household heads received some level of college education, a 10.1 percentage point increase from 1990 and a 13.3 point increase from 2000.

However, rising education costs have far exceeded income increases, creating a debt challenge. An estimated 36 percent of millennials have student loan debt, compared to 18 percent of Gen Xers and 4.1 percent of baby boomers.

Data from the Federal Reserve Bank of New York show that a 25-year-old’s average education debt has increased from $4,516 in 2003 to $10,033 in 2015. These high levels of debt are proving to be homeownership barriers for millennials who are struggling to save for a down payment while paying off their loans. They also increase debt-to-income ratios, potentially making it more difficult for them to obtain a mortgage.

Exorbitant home values are pricing them out of homeownership.
Members of the millennial generation, especially those with higher levels of education, typically flock to more populous locations, such as New York City and San Francisco, in search of high-skilled cities with employment opportunities and urban amenities. These areas tend to be more expensive, with low housing elasticity due to a shortage of new construction for starter homes, the report states.

Additionally, many millennials are rent-burdened, paying more than 30 percent of their income toward rent, leaving them less room in their budget to save for a down payment. According to research by the Pew Charitable Trust, the transition to homeownership is slower for rent-burdened individuals. The demand and pricing for rental housing dramatically increased after the financial crisis.

The racial divide remains a far-reaching challenge.
Millennials are the most racially and ethnically diverse generation. The increasing share of minority members, and the added home-buying challenges they experience, is lowering millennial homeownership rates on average, cites the report. According to 2015 statistics, white households represent the highest share of homeowners, making up 39.6 percent of all households. Meanwhile, the Hispanic homeownership rate decreased to 24.6 in 2015, and the black homeownership rate has been in continuous decline since 2000, sitting at 13.4 percent in 2015. The Asian household rate has fluctuated, dropping between 1990 and 2000 from 30.6 to 26.6 percent, before increasing to 27.2 percent in 2015.

How can the industry overcome these challenges?
According to the report, many potential homebuyers are not aware of down payment assistance, especially first-time buyers. The first step to correcting this problem? Increasing awareness of government-sponsored programs through financial education as part of a high school or college curriculum.

Additionally, the Urban Institutes proposes a streamlined and tech-centered mortgage application that shortens the process and more thoroughly assesses risk. The underwriting process should also be revised to include factors not typically within a credit score assessment, such as rental payment history, in order to assist consumers with low credit or a lack of credit history. Other proposed solutions take the form of revised student loan debt reporting, changes to land-use and zoning regulations, and reduced racial and ethnic disparities.

June Is National Homeownership Month

Source:  Liz Dominiguez/RISMedia

June is National Homeownership Month, and the industry is recognizing the importance of homeownership as a milestone of the American Dream.

This year’s theme, set by the Department of Housing and Urban Development (HUD), is “Find Your Place.” HUD is one of many agencies that provide resources to help consumers obtain and sustain homeownership. Through its network of housing agencies, consumers can seek out counselors for homeowner education, foreclosure prevention and budgeting assistance. With mortgage options through the Federal Housing Administration (FHA), consumers with low credit or low-down payment funds can reach their homeownership goals faster—a significant method of aid for millennials and upcoming buyer generations flooded with student loans, making it difficult to amass the funds needed for conventional financing. According to HUD, over 47 million homeowners since 1934 purchased a home with a mortgage insured by FHA, and around 40 percent of all borrowers purchase their first home using an FHA loan.

“Homeownership serves as an enduring symbol of security and prosperity, and it provides many Americans with a legacy they can pass down to their children and grandchildren,” said HUD Secretary Ben Carson in a statement. “During National Homeownership Month, we recognize the abiding value of owning a home, and we rededicate ourselves toward helping hard-working families to find their place in the American dream.”

Although homeownership rates are currently stalled at 64.2 percent, experts say the lack of dramatic increase is a reflection of a market that is withstanding challenges such as low inventory and rising interest rates. While the number has not moved much since the first quarter of 2017, there have been gradual increases since 2016, following a significant drop after the housing crisis.

While the National Association of REALTORS® (NAR) celebrates its commitment to homeownership year-round through resources provided on its Homeownership Matters and HouseLogic sites, NAR President Elizabeth Mendenhall recognized June as a pivotal time to reaffirm the association’s mission to promote homeownership.

“National Homeownership Month is a time to celebrate and promote the modern American Dream of owning a home,” said Mendenhall in a statement. “Homeownership changes lives and enhances futures, and many Americans see it as one of their greatest hopes. These individuals are counting on the nation’s 1.3 million REALTORS® to champion and protect homeownership and help make it more affordable, attainable and sustainable. REALTORS® pledge to continue to lead efforts to ensure that the dream of homeownership is not only possible, but very real, for any and all who want to achieve it, so they can have a place of their own to make memories, start growing their financial futures, and build strong communities.”

In addition, Freddie Mac’s website for National Homeownership Month provides valuable resources for homeowners, such as educational articles, homeownership program statistics and opportunities consumers can take advantage of in order to make their homeownership dream a reality.

According to the National Association of Home Builders (NAHB), primary residences are ahead of all other financial assets, business interests and retirement accounts, accounting for nearly one-quarter of all assets held by households in 2016, as reported in the latest edition of the Federal Reserve’s Survey of Consumer Finances.

“Homeownership is a primary source of net worth for many Americans, and is an important step in accumulating personal financial assets over the long term,” said Randy Noel, chairman of the NAHB, in an interview on NAHBNow.

In recognition of National Homeownership Month, NAHB is making a toolkit available for its members; the toolkit includes a video on the value of homeownership, sample social media posts, radio scripts and other talking points, relevant articles, and even print ads showcasing the benefits of homeownership.

Citing the passing of the Economic Growth, Regulatory Relief and Consumer Protection Act and this past year’s tax reform bill as recent progress, President Donald Trump released a statement pledging the administration’s commitment toward increasing homeownership incentives across the country:

“During National Homeownership Month, we affirm the joy and benefits of homeownership. For millions of Americans, owning a home is an important step toward financial security and achieving the American Dream. My Administration is committed to fostering an economic environment in which every family has the opportunity to enjoy the sense of pride and stability that can come with owning a home.”

The Profile: Thurston County Statistics & Data

Updated November 2017

First published in 1982, The Profile is a compilation of statistics, trends, analyses and comparisons for Thurston County and its jurisdictions. Since its inception, The Profile has developed a reputation as a comprehensive and reliable resource for a wide variety of users needing current, accurate data for the region. The Profile is updated each fall.

AcknowledgementsThurston Regional Planning Council wishes to thank the many public and private agencies, and their staff, that have provided data and information used in The Profile. Some of the agencies contributing to The Profile include:

  • Washington State Office of Financial Management
  • U.S. Census Bureau
  • U.S. Bureau of Labor Statistics
  • Washington Department of Employment Securities
  • Washington State Superintendent of Public Education
  • Northwest Multiple Listing Service

Complete data sources are included with each table. While TRPC strives to provide the most accurate and timely data available, it cannot guarantee, and is not responsible for, the reliability of data originating from other institutions.

Archives

Thurston Regional Planning Council published The Profile as a printed document between 1982 and 2013. During that time period, TRPC continued to use the latest technologies and information to make the document a leading resource for data on Thurston County. To see how The Profile — and the data included — have evolved during its 30-plus year history, explore The Profile archives.