Your credit score and history are your keys to low interest rates and the ability to buy a home. If you're thinking of buying a home, your first step is to obtain your credit report and score to be sure that all of your credit information is reported accurately, that there is nothing on it that does not belong to you, and that your credit score is high enough that you do not present a risk to a lender.
You may be wondering, "What is my credit score?" The credit or FICO score is "a numerical expression based on statistical analysis of a person's credit files, to represent the creditworthiness of that person" (http://en.wikipedia.org/wiki/Credit_score). In other words, the credit score is what credit card companies and lenders use to determine if it's a risk to extend credit to you or loan you money.
All consumers are entitled to receive a free copy of their credit report each year. Visit http://www.annualcreditreport.com to receive your free copy from each of the three credit bureaus: Equifax, Experian, and TransUnion. To obtain your credit score from any of these agencies, you will need to pay extra, but you should obtain a credit score report from at least one of the bureaus. You do not need to purchase any credit monitoring services to obtain their free credit report. Knowing the credit score (and associated reasons for why it is what is) will help you know how to fix your overall credit and raise your score.
The following site gives an overview of credit scores: http://www.creditscoring.com/ pages/bar.htm. If you already have what is considered a good credit score, you may not want to make any drastic changes in the way you're handling your credit, as making any changes could cause your score to drop rather than raise it any higher. For those whose scores fall below 680, following some of the next steps may help raise your score.
Begin by verifying your name, current address, and social security number on your credit report. Then review all of the accounts listed on each of the reports to be sure that they are yours, that the balances are correct, and that the payment status is correct. Be aware that each of the three credit reporting agencies may list different information. Some creditors may report to only one or two of the agencies, while others may report to all three. If there is any information on your credit report that is not yours, contact the creditor immediately to verify the information. If you suspect identity theft, you will need to request a fraud affidavit and possibly notify police. The information in this article does not extend to cases of identity theft.
Now that you have verified the information on your credit report and looked at your credit score, you will likely notice the reason codes for why your credit score is what it is. There are several factors that affect your credit score: late payments, collections and charge-offs, length of credit history, and available credit are the most common.
Late payments account for a large percentage of your credit score, so you want to be sure that your payments always arrive on time. Late payments over 30 days will be reported to the credit bureaus and remain on your credit report for 7 years. Make it a priority to know the due dates on your credit cards and other installment loans and mail your payments at least 5-7 days before the due date. Credit card companies do not have to post your payment the day they receive it, so be sure to allow for ample time in case they do not post immediately.
Many banks offer free online bill payment. Some of these systems are similar to mailing a check, so consumers still need to allow for mailing time. However, you can set up automatic payments for your bills each month and never have to worry about being late again. Many credit card companies and lenders have now added free bill pay services to their websites as well. These systems generally allow consumers to pay their bill right up to the day that it's due. These companies may also offer automatic payments from your bank account or a credit card. Some companies will even allow you to make a change to your due date for your bills. You will need to contact your creditor to inquire. Note - they may charge a fee, so be sure to ask.
Be sure, when reviewing your credit report, that all credit cards and loans that have been paid off show a zero balance. If you've had accounts that have gone to collections or have been charged off, be sure to check that those are showing as paid. Contact your creditor to update your report if you find anything reported incorrectly; incorrect balances could affect the portion of your score related to available credit (explained below). You should always keep the statements that show you've paid an account in full in case you ever have to dispute it with the creditor or the credit bureaus.
Length of credit history is very important; accounting for approximately 15% of your overall score. Keeping credit cards open and active is important to maintaining that credit history, even if you don't use the card that often. Use you credit card once or twice every few months and pay the balance immediately to maintain the credit card and retain a solid history. If a credit card company is acquired by or merged with another company or if the card has been reported lost or stolen, your creditor may reset your opening date and you may not receive the history that is so critical. Contact your credit card company and make sure they have the accurate date that you opened the original account.
The amount of debt that you carry on all your credit cards and loans accounts for a good portion of your credit score, so it's important to keep your debt low in relation to the amount of available credit that you have. Keeping balances under 50% of the available credit is good, but keeping it under 30% is ideal. Lenders look closely at the amount of debt you are carrying when you apply for a home loan. To lower your credit balances, paying just the minimum amount will not get your credit paid off quickly and you will pay a lot more in interest than your original purchases initially cost. To pay off your debt faster, try to double your minimum payment, if you can. There are several different methods to pay off your debts explained here: http://moneycentral.msn.com/smartbuy/home.asp.
You want to be sure that your credit score is above 680 to take advantage of better interest rates when you're shopping for a home. You will be happy when you have focused your attention on improving your credit score and your overall report. Knowledge is certainly power, and knowing your credit score and understanding the report will give you the power to achieve home ownership.
This article is intended to provide general information only, not specific advice. If a consumer requires more assistance, he or she should consult a financial professional.
Selling homes and making new friends for life in the process, for 37 years, has been a challenge in the ever-changing market and economy. Listening to my buyers' needs has taught me what works and what doesn't. I believe when you love real estate, it shows; when coupled with a love for people as well, it really shows!
Having a good listing inventory brings calls from buyers. With 77% of all buyers looking for their homes online, having presence on the internet is critical. It takes time and a level of expertise to stay on the first page of Google. I hire others to add fresh content and keep it up for me. Not only does my website display all my listings, but all listings in our Multiple Listing Service. I make sure my website provides excellent content about our community, schools, government, and other information buyers and sellers find helpful.
Always striving to offer the most professional service, I place my client's interests first. I answer their calls as they come in, whether early in the morning or late at night. Consumers are impressed to find me answering calls late in the evening; they are shocked to hear a real-live person. Being available wins the appreciation and confidence of the consumer and helps me build a strong referral base as those clients refer me to their friends, family, and co-workers.
Spending time with my prospective buyers and sellers, explaining the market, neighborhoods, financing, schools, and any other matter of interest tells them their best interest comes first. It is necessary to be fully informed in able to answer our client's questions. I pick up and deliver paperwork and go to my client's homes rather than asking them to come to my office. I arrange for inspections and reports, the appraiser, and any other issues which must be addressed. The referral to other service providers such as lenders, escrow companies, inspectors, insurance agents and handy people is appreciated by my clients. I only refer those people or companies that provide excellent and professional service.
I encourage my sellers to pay close attention to all of the comparable sales in their neighborhood or zip code to avoid overpricing their homes. Sellers must also be informed about keeping their homes in good condition, upgrading, designing great curb appeal, decluttering, and staging for showing, which can often raise the value of their home. Looking at my sellers' homes through the eyes of a buyer helps me to help my sellers because they may not know how to do what needs to be done. They need the help of their Realtor and I am willing to share my knowledge and expertise. Many buyers will not buy a home which requires work of any kind; our job is to help the seller place their home in the best possible condition that will cause a buyer to be interested.
In the declining market we have been in for the past two years, I stay abreast of the economy and my community, and try to answer my client's questions with intelligent and truthful answers. It is important to be truthful in every area of real estate. It is no longer about finding the Dream Home and making an offer; there are many other considerations to be considered.
Now is actually one of the best times to purchase a home. With the new law being passed, our first time home-buyer receives a $7,500 credit for buying. Savvy buyers on the trail for our excellent buys are jumping on them. Though this tax credit is given to all first time homebuyers and is reduced from their taxes, it has to be repaid in 15 years at $500 per year, interest free. Any first-time buyer purchasing after April 18, 2008 and before July 1, 2009, can take advantage of this credit. It is important for the buyer to speak with an accountant or CPA.
A strong, positive attitude, happy disposition and thoughtful consideration to our buyers and sellers are the keys to success in any real estate market. Consumers want a realtor they can trust and respect. My best tool for finding and keeping clients is to be honest and treat them with respect and dignity, exactly as I would choose to be treated.
Wells Fargo appears not to have a conscience. After we taxpayers gave them $85 billion in bailout money, the company planned a 12-night junket to Las Vegas to "thank" its emloyees for a job well done. The junket was canceled when lawmakers criticized the lender and accused the company of misusing $25 billion in taxpayer bailout money.
Melissa Murray, a spokesperson for Wells Fargo stated that the conference is a company tradition and that they never planned to use bailout funds for the trip. "It's really important that our team members are still valued and recognized," she said. I would like to remind Ms. Murray that these employees still have jobs; they are gainfully employed instead of joining the thousands of others previously employed in the lending field in the unemployment lines. One would think that gainful employment in this economic crisis would be enough gratitude. Instead of wasting money on this sort of extravagance, Wells Fargo should be giving this money to homeowners struggling to stay in their homes.
If these lenders had been doing their jobs properly, our country quite possibly would not be in this financial mess. What would their reward be then? Personally, I think all of Corporate America needs to look closely at its top personnel, and those who led their companies and our country into this giant problem should receive their walking papers. Let them apply for unemployment. Instead, these executives received millions in bonuses paid for with taxpayer bailout money. Common sense by the top administration of these companies clearly isn't common anymore. This insanity has got to stop.
The first and most important step in purchasing a home is securing financing. This is especially true today, in the light of tightening credit standards and risk-based pricing.
Before you begin your search on the internet for your dream home, it would be wiser for you to speak with a qualified lender regarding today's mortgage market.
I recommend that you chose a lender that not only offers conventional financing but is an FHA approved lender as well. Your lender should also know what local and state home-buying assistance programs are available.
Most states and even some counties and cities offer first-time buyers assistance when purchasing a home. This may be in the form of a tax credit or down payment assistance. The Housing and Economic Recovery Act of 2008 has approved a temporary tax credit for first-time buyers.
Due to the onslaught of foreclosures many changes have occurred in the mortgage industry. Actually, for the most part lenders are returning to the old fashioned practices of years ago, lending on credit stability and savings ability.
One of the most significant changes in the mortgage industry is risk-based pricing. Your credit score will not only affect your ability to qualify for a loan but will also affect how much a loan will cost.
Today's, buyer is much more savvy than in years past and that is a good thing. It is not a good thing to assume you know how much you can afford in a home or that all you have to do is have good credit.
Talking with family and friends is helpful but you will need to speak with a loan specialist to understand how the mortgage market has changed and what those changes will mean for you.
Speaking with a good lender will help you determine what price range you can afford, what you will need in available funds, how to secure a home loan, which financing option is the best for your particular financial needs as well as a plan to meet these goals.
It is a very confusing time for John Q. Public. Half the economic forecasts say there will be a recession or inflation, while another segment is predicting that we will see neither but the economy will recover slowly.
Half of the personal financial advisors are advising buyers to take advantage of the current real estate market, while the other half is advising that "a wait and see" approach is the wiser option.
It is true that home values could depreciate even further, but that does not make purchasing a home today an unwise choice.
It is a sure bet that rental costs will increase in the next 30 years. However, with a fixed rate mortgage loan, you will know exactly what your housing budget will be for the next 30 years. Owning a home offers certain tax advantages as well.
As a long term investment, purchasing a home is a wise choice. Almost all financial advisors include owning a home as part of your financial portfolio. An investment in a home today has the potential to yield a large cash return in 30 years.
Currently home prices are affordable, interest rates are low, affordable financing is available. If interest rates increase even one percent, you could lose tens of thousands of dollars in purchasing power. If home prices would further depreciate, but interest rates would rise, the cost in interest payments would by far out-weigh the savings in purchase price.
A home is much more than an investment. It is a a place to be, a place to live - your own little corner of the world.
Let me start by saying fixing is like the old adage "beauty is in the eye of the beholder".
Some buyers will not consider buying a home that requires minimal work such as paint and carpeting, while others are willing to take everything down to the bare walls and, in essence, start over to make the home reflect their personal style. Some buyers are willing to do work at a later date in order to purchase a home below market value.
If you are willing to except a home that is not in turn-key condition, then please read further because I am going to tell you about a special financing program for homes that need anything from a "touch up" to homes that need revitalizing.
This loan program allows buyers to do repairs; as simple as cosmetic repairs such as carpeting, paint or landscaping to major renovations such as replacing windows, energy systems and even room additions. This loan program does not require any interim loans or require that the repairs be completed before the escrow closes.
FHA has recently formed the Streamline-K Loan program which allows buyers to borrow funds for the purchase of a property and obtain money for repairs all in one easy loan.
The Streamline-K Loan program is not the same as the FHA 203-K program (which is still available). The Streamline-K Loan program has done exactly what its name implies, it has streamlined the very complicated 203-K process, making it a great option for home buyers.
The Streamline-K Loan program offers the same benefits as the standard FHA loan: low interest rates (fixed or adjustable), flexible loan guidelines with regard to credit and low down payments (minimum 3%).
If you are considering a home purchase in the Fresno-Clovis area, this is a wonderful opportunity to expand your home options in a market that is already allowing you the best affordability in years.
Contact an FHA approved lender for pre-approval and for more details regarding the Streamline-K Loan program.
There is a silver lining in the storm cloud over the housing market in Northern California. Along with the decrease in home values comes a decrease in property taxes. Many homes that were purchased after 2004 are being reassessed in Fresno, Tulare and Kings Counties. Fresno County has reassessed the home values of over 46,000 properties (most of which were single-family units) and sent out postcards to homeowners to relay the information. Tulare County is close to finishing their property re-evaluations and homeowners in that county who purchased their home after 2004 should be receiving a postcard from them sometime in August. Kings County is taking a little longer because, unlike the other counties, they have forgone the computer reassessment and are doing their re-evaluations by hand. If you purchased your home after 2004 and believe you are due a property value reassessment, you should contact your county's assessors office to file an appeal. But don't wait, these appeals will only be open until November and only apply to those homes purchased after 2004, due to Proposition 13 that placed a cap on assessment growth at 2%.
IndyMac Bank was the largest lender to Alt-A borrowers. The mortgage giant has in effect gone out of business. The Bank will still be operating but under Federal supervision and will no longer be issuing mortgage loans.
Unfortunately, this means a tighter credit crunch in the mortgage industry and possibly higher rates for Alt-A borrowers. What is an Alt-A borrower? It is the average American, the one who does not have perfect A1 credit.
There will still be loans for Alt-A borrowers but they may be much harder to find and more expensive in regards to interest rates and loan fees.
In the near future, other Alt-A lenders will either come to fill in the gap or they will follow IndyMac's lead and leave the business as well.
July may be the best time for you to purchase a home, before all the fallout from the exit of IndyMac as a mortgage lender, occurs.
Have You Been Waiting For The Bottom of The Market? Your wait may soon be over.
Data Quick Information Systems (which monitors real estate activity nationwide) reports sales are up not only in California but throughout the country. The figures that are being published indicate that the bottom of the market seems to have been reached in many of the nation's areas.
California, including the Central Valley, is still seeing a decline in homes prices but the rate of decrease per month does seem to be leveling off. Sellers know that they are facing stiff competition in pricing, due to the high rate of foreclosures on the market and the number of buyers in the market place. Sellers know that buyers are going to do what buyers have always done, shop the market for the best value. Existing homes sales are in the sellers favor at this time. Established landscaping and interior décor can save buyers thousand of dollars making pre-existing homes more desirable than new homes. Resale homes sales increased by 40% in April.
A few weeks ago the Fresno Bee reported that sales were up 2% in April from last year. That trend continued through May. Even the hard hit counties of Riverside and San Bernardino have seen sales volume rise.
Buyers are finding that home prices are becoming more attractive as prices roll back to near the same values as four years ago. Selection of homes styles is also a positive for buyers, The excess in current inventory is giving buyers more choices in finding a home which matches their lifestyle.
Another factor in increased sales is the relocation buyer. Home values are so much more attractive here, than in the Bay Area or the Greater Los Angeles area, many people are opting to relocate to the Central Valley.
According to Data Quick, the areas seeing the best increase in sales are the regions where home prices have declined the most. The California Association of Realtors reports that home affordability in Fresno County has risen for 44% in 2007 to a current rate of 56%.
Interest rates are still historically low. In May they began to inch upward but in the last few weeks this trend has reversed. Interest rates are expected to increase by the end of the year. The economy will be playing an important roll in the Federal Reserves position in regards to future rates.
The worst of the mortgage crisis has been worked through and the bottom of that unfortunate debacle has been reached according to many experts. There will still be foreclosures in the high numbers but the flood is beginning to recede, although the flood waters will recede slowing. It will be at least another year before Riverside and San Bernardino Counties will see any recovery in their market.
When a real estate market goes through a downturn, the way back up is always a little shaky. Solid footing may still be a ways off in the future, there is still a high inventory rate and we need to see a decline in the number of foreclosures entering the market each month. According to historic indicators it does appear that recovery for the real estate market is on the horizon. The economy, rising fuel prices and the forth-coming elections will all have their influence on what will happen next.
Personally, I believe this is an excellent time to buy, prices are down, inventory for buyers is at its best and interest rates are reasonable. Motivated buyers working with motivated sellers make it a win-win situation for everyone.
Fresno State Bulldogs won the NCAA baseball Championship on June 25th and I couldn't be prouder, if they were all my own sons!
I am sure I am joined by many in that sentiment, as was proven in the turnout the team received when they came home. Over 6500 waited at Biden Field to cheer the team while another 5,000 welcomed home the team with a parade. Despite warnings about air-quality (due to devastating fires in the mountains) everyone that could turn out to cheer the Champions did.
No one thought they could do it but these boys knew that they could do anything and wouldn't listen to commentators, statistics or doomsayers. And they proved themselves right on June 25th.
Despite injuries to key players, the Bulldogs proved it is all about team work and commitment.
Fresno State not only won its first baseball championship but, in addition, several players made the 2008 Men's College World Series All-Tournament Team. The qualifying players were: Outfielder - Steve Detwiler, Outfielder - Steve Susdorf, Pitcher - Justin Wilson, Second Baseman - Erik Wetzel, and Third Baseman - Tommy Mendonca. Congratulations to all of these fine players.
Fresno State's Tommy Mendonca was named the Most Outstanding Player in the College World Series. Congratulations Tommy!
Congratulations Bulldogs! -Fresno is proud and so am I!
Carole Jacoby offers information about buying and selling real estate in Fresno, CA. You will find articles on a variety of subjects such as Home Staging, Green Living and so much more.
Carole Jacoby is an expert in her field and is happy to share her knowledge with you.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
There is a silver lining in the storm cloud over the housing market in Northern California. Along with the decrease in home values comes a decrease in property taxes. Many homes that were purchased after 2004 are being reassessed in Fresno, Tulare and Kings Counties. Fresno County has reassessed the home values of over 46,000 properties (most of which were single-family units) and sent out postcards to homeowners to relay the information. Tulare County is close to finishing their property re-evaluations and homeowners in that county who purchased their home after 2004 should be receiving a postcard from them sometime in August. Kings County is taking a little longer because, unlike the other counties, they have forgone the computer reassessment and are doing their re-evaluations by hand. If you purchased your home after 2004 and believe you are due a property value reassessment, you should contact your county's assessors office to file an appeal. But don't wait, these appeals will only be open until November and only apply to those homes purchased after 2004, due to Proposition 13 that placed a cap on assessment growth at 2%.
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