Page 12 - October 2023 Issue.indd

DOLLARS AND SENSE by Tolbert Rowe

Housing Shortage Leads Soaring Prices

If you are homeless or otherwise 3% interest rates. No need for landlords your credit report, more specifically
in search of a place to live, Caroline to put ads in the local paper or advertise your credit scores, will be critical. You
County is not the greatest place to be online. The network of rental companies cannot purchase nor can you rent

looking, especially for younger people and landlords receives calls everyday without a satisfactory credit report that
just trying to start out in life. Heck, the regarding units available. shows you are prudent in managing your
entire Mid-Shore area has a shortage of use of credit.

The pandemic has made many tenants
decent affordable housing, either to rent

squatters in that landlords have been If you are just starting out and need to
or purchase.
prohibited from moving for eviction. establish credit you need to get a secured

Mom and Dad, or other family members Rental assistance moneys for those credit card. These are major credit cards,
have become the source of shelter for tenants who have fallen behind have usually VISA or Mastercard where your
many people, young and old. The saved many landlords from their own credit limit is determined by the amount
challenges of the Covid pandemic and economic disaster. you put on deposit with the issuer. You
limited inventory of homes for sale has send the issuer $300, and they will issue
So, with all this gloom and doom
served as a catalyst for developers to you a credit card with a $300 limit. If
about housing and the prospects for
build homes on the few building lots you default on the card they keep your
the situation to improve in the near
that had been sitting dormant for a money, hence the term “secured.”
future looking fairly grim, why would
period of time. Currently, the high cost
anyone consider purchasing a home? When just starting out it is imperative
of lumber and other building materials
For the simple reason that you need to that you set yourself up properly to get
and compliance with ever tightening
live somewhere, and you might as well a good credit score. First, make your
building requirements has stopped any
be an owner instead of a tenant. This payments well before the due date. Do
serious investor from moving forward
market, with exorbitantly higher rents not be late making your payment! If you
on any new housing projects.

reaching levels close to what it costs to are late, that reflects negatively on your
With a shortage of housing units be an owner, is a prime reason to buy account and lowers your credit score.
available for sale or rent, prices for instead of rent, even with today’s higher
Keep in mind that the goal is to establish
purchasing as well as monthly rents have prices.
good credit so when a credit score is
soared to levels that seem unsustainable.
There are things you can do now to be reported it is a good score, and not a

There is a feeling that at some point
considered a serious buyer, and doing bad one. Late on your payment... Bad.
prices will come down, or at the very
these things will also make you look Charge amounts over your credit limit...
least stabilize. But the $64,000 question
better to a potential landlord if renting Bad. Getting a credit card and not using
is “when will that happen?”
will be your first step getting out on it... BAD. It does no good to have a credit
Rental units, if you can find one, have a your own. card for the purpose of establishing

monthly rental payment that could be credit and leaving it in the desk drawer
Th e first thing you must do is establish

higher than what a mortgage payment collecting dust.
good credit. Whether renting or buying,
would be, especially with current sub
Think of your credit score like a water

pump. Using the card is like priming the
pump and getting water fl owing. Every
“Your Mortgage Consultant Since 1985”
time you make a payment is one more
Purchase or Refinance handle stroke on the pump bringing up
more water.
Get the card, use it every month and
make payments before the due date;
another pumping stroke. More water...
Keep the balance on the card at, or
115 E Dover St. Ste 3 - Easton, MD
below 40% of what your available credit
tolbert@baycapitalmortgage.com C. Tolbert Rowe, is (credit limit) and the flow of water
www.baycapitalmortgage.com NMLS Vice President/Lending is steadier and more dependable. And
182844
use the card every month, because for
410-819-3005 / cell 410-310-3520 every month there is not activity, water
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