When is Your Credit Score not Your Credit Score?

Who has monitored their credit on sites like Credit Karma, only to apply for a loan and have the score vary so wildly that you couldn't get financing?  In my time as a mortgage originator, I lost count of how often applicants would say, "But I just checked my score and it was way higher than that!"

My usual response would be that sites like Credit Karma are sort of like Zillow for your credit profile.  The information is a good estimate of what your score and profile are, but lenders don't use that exact formula.  Realtors use a similar line on some disclosures by saying the "information is deemed reliable but not guaranteed."  That was true enough of an explanation when I was on the corporate side of the desk, but I recently applied for my own financing and found out just how hard it can be to navigate what my credit score really is.  I felt like Alice in "Through the Looking Glass," I knew what my credit score was this morning, but it changed a few times since then.

This post will break down what that meant and what happened.  In that order.  Have you ever looked for a recipe online and seen a long soliloquy before the list of ingredients?  "It all started when I took a year off from college to backpack through Italy.  I met a Tuscan grandmother who told me that the secret to a good marinara was patience..."  And here you are thinking, "Damnit, I'm in the checkout aisle at Costco right now and I'm just wondering how to add some zest to the rigatoni.  I don't need to read 'Eat, Pray, Love' first.  Or if I'm being entirely honest here, again."

So I'm switching things up and doing the useful part first and then the story for anyone who's still reading.

First-Time Home Seller, Part One

I have worked for almost twenty years with first-time homebuyers - either counseling them as a non-profit employee or counseling them AND closing their mortgages as a loan originator.  So I’ve seen that there’s no shortage of advice out there for first-time homebuyers. But when I went to sell my home, I thought about how little guidance there is for first-time SELLERS.  Which most first-time buyers will become at some point in their lives. Now that my home has sold, I want to walk people through that experience and hopefully provide a few helpful pointers of what you might not have thought about before that undertaking.

If it seems, at times, like a piece of advice comes out of nowhere and one thing doesn’t always follow another in any logical sense, that’s because in the process of selling your home things come out of nowhere and one thing doesn’t always follow another in any logical sense.  Selling your home is sort of like if you’re dating someone and the relationship gets to the point where the two of you are finally ready to take the big step and meet one partner’s friends for board game night. And it turns out you thought you knew how things would go but everyone’s got these inside jokes and they bust out the rule book to prove to you that you’ve been playing Monopoly wrong for your whole life and you’re thinking about breaking up with her before the game is even done but they made you be the damned thimble and now you’re determined to win, if only to prove a point.  

In order to give some semblance of order while still allowing for the occasional non-sequitir, I’ve broken this series down into three categories.  The emotional/mental side of things, the physical/practical aspect, and the finances.

Rental Screening Proposals Go Too Far

Minneapolis is proposing a sweeping change to how landlords can screen tenants.  The ordinance is, well, problematic enough to rouse me from my slumber.  I've got a few blog posts left in me on this site and then I'm doing my best to look forward instead of back at my old town.

The proposed changes can be found here and here.

And it's not all bad, to be honest.  But like a lot of what this council does, this proposal takes some good and necessary changes, adds in some trendy left-wing buzzwords, mimics west-coast policies that may or may not apply to the realities of a Minnesota marketplace, tosses those in a blender with some predetermined conclusions and today's ideological purity requirements, and presto!  That's how you get new city code!  Schoolhouse Rock really ought to write a song about this, but it's tough to find words that rhyme with "ordinance."

I do want to break this down into the good, the maybe, and the ugly.  First, the good parts...

On Representation within Neighborhood Boards

Image from Wikipedia.

There is an ostensibly noble push to create more diversity on Minneapolis neighborhood boards.  Noble because the premise is sound; community organizations should at least somewhat mirror the demographics of the neighborhoods they serve.  I characterize the current push as coming from a questionable place though, and that leaves me with doubts about whatever policy might come from any changes.

My entire twelve-year connection to north Minneapolis was spent as part of a neighborhood organization, either as a staff person or as a committee and board member - even two years as board chair.  If there is one thing I learned as an absolute truth for community participation during that time, it is this:

Meetings don't make people come to meetings; issues make people come to meetings.

So when city staff, elected officials, or critics and opponents of these organizations make the accurate claim that some don't have enough people of color, renters, or other demographics in attendance or leadership roles, my first questions are...

Time of Sale Energy Disclosure is the New Regulation Nobody Wants

Photo is of my home in Superior, built in 1900 and getting as much rehab as I can do in 2019 and beyond.  Note the amount of insulation.

In an attempt to address energy efficiency, the Minneapolis City Council is poised to consider adding new burdens on the sale of residential homes.  Specifically, a blower-door test and a two-inch hole drilled on the inside of an exterior wall would tell prospective buyers new information about the home they are purchasing.  If implemented, I worry that this will lead to more difficult real estate transactions, lower home values, and possibly even a net loss in energy output.

While my time living in Minneapolis has drawn to a close and my time owning property there also nears an end, that doesn't mean my connection to the city is severed and never to be restored.  A future job, relationship, or investment opportunity could always take me back to the Twin Cities at some point.  And a regulation like this would make me less likely to make that investment in this fair city.

We'll get into the broader market impacts, but first on a personal note...