Dave Zwierecki's Blog

When is the Right Time to Buy a Home

Dave Zwierecki (First Security Financial Services) — Sun, 19 Aug 2007 21:41:19 -0700

Right now there are a lot of homes up for sale and not enough buyers to buy up all of these homes. This is one of the top signs that we are currently in a buyers market. When there are too many homes for sale and not enough buyers, most of the time sellers are willing to go above and beyond to try and sell their homes. This may mean that they are willing to sell it for under market value and accept a significantly lower sales price than they would like to, they may be willing to offer incentives such as furniture or home repair store gift certificates, car leases, and much more. Therefore, now is definitely a good time to start looking for a new home if you have been considering purchasing a home. Chances are you can obtain a great bargain and buy a home for a considerably lower value than it is probably truly worth, especially if you are patient. Don't be afraid to bid low. Many people believe in bidding at a percentage below the purchase price, such as 10% under, but in this market it is not uncommon for consumers to bid 15-20%, and possibly even more, under asking price.

Mortgage companies are shutting their doors, filing for bankruptcy protection, merging, selling out to larger companies, and changing their guidelines by the minute. It is highly anticipated that this same trend will continue for awhile longer as well. So what does this all mean to you. It means that it is going to be tougher to obtain a mortgage the longer you wait. Rates have steadily been increasing over the past 12+ months and they will probably continue this upward trend, which means the longer you wait the higher the interest rate you will most likely qualify for. Therefore, even if the real estate trend of decreasing property values continues, the saving that you may realize you will probably end up paying for through a higher interest rate. Hoping for rates to decrease and property values to decrease may be too risky to wait for. Now is the time to buy, especially if you have a home that you need to sell. The worse the real estate market gets, the worse for you trying to sell your home as well.

Buying a foreclosed home could be a very beneficial way to buy a home and you may be able to get a home at a real good value. Keep this in mind though, usually sheriff auctions do not provide the tremendous deals that make buying a foreclosed home worthwhile. Buying a foreclosed home from sheriff auction can also be risky because they are buy at your own risk and you can not walk through the homes before buying to assess the damage or maintenance the home needs to be habitable. There are some good deals though at sheriff auctions, you just need to really do your homework before you go to the auction. two good rules of thumb are to drive by the homes that you are considering purchasing and at least look at them from the street, if not try to get up closer to the home, and also to find out roughly how much is owed on the mortgage so that you have a good idea as to what the lender needs to try to get out of the house to break even at auction. If you do not like the idea of the auction process, then you may want to consider finding a Realtor who specializes in selling homes that have been foreclosed on. There are many Realtors who specialize in this. The keys to buying foreclosed homes are patience and research. Therefore, foreclosure purchases are not a bad route to go if you do your homework and be patient.

In conclusion to recap everything, now is as good of a time as ever to look into buying a home. Prices are low, rates are still good and there are still quite a few mortgage programs available Not a lot of good can come out of waiting to buy a house, except unnecessary risk of paying more money, taking on a higher interest rate and/or possibly not qualifying for a mortgage program in the future. Foreclosures can be a good way to buy a home for a good low price, however certain caution and due diligence need to be taken anytime you are considering buying a foreclosure.

Applying for a Mortgage - Initial Steps

Dave Zwierecki (First Security Financial Services) — Wed, 15 Aug 2007 21:04:05 -0700

Applying for a mortgage can be a very big step in one's life. A mortgage is one of the biggest investments and liabilities in a person's life and needs to be handled with care. The wrong mortgage program can eventually lead to doom or worse yet, the loss of your home.

Applying for a mortgage can be an extremely confusing thing to do, especially for first time homebuyers. What bank should you work with, who has the best rate, who can you trust to do the best job for you, should you use a mortgage banker or a mortgage broker and many other questions are at the forefront of many consumer's minds. The first thing that you need to do before you apply for a mortgage is to sit down by yourself or with your spouse and figure out a budget along with your present, short term and long term financial goals. This way you will have a better idea as to what type of mortgage will be best for you along with a very accurate idea of how much of a payment you can afford to continue living the lifestyle you are accustomed to.

The second step in applying for a mortgage is to figure out who you should work with, a traditional bank, a credit union, a mortgage broker, a mortgage bank, etc... Who to choose can often be a difficult choice. Banks traditionally only have one set of underwriting guidelines and they are usually very picky about who they approve for mortgages. Mortgage banks will generally be a little less strict than normal banks, however they usually will offer retail prices on their rates so you may not always be able to obtain the best interest rate that is available. Credit Unions can many times offer financing on things that mortgage banks and traditional banks can not, however they do not always provide the best rates for what they offer. I do highly recommend considering becoming a member of a credit union though because they do have some very aggressive items that may be worth looking into for all different types of financing and investing. Mortgage brokers can usually shop your loan around with hundreds of different lenders and obtain wholesale rates offering the best of both worlds, however which one should you use. In this step, you should look at your newspaper over the weekend to see if any banks are having any rate specials for new mortgages, if so try applying for a mortgage with them as the first company. Next, you should look into a mortgage bank such as a Countrywide or Quicken loans or somebody and see what they can offer you. Finally, contact a mortgage broker in your area and see what they have to offer you as well. If you have shaky credit the mortgage broker will be your best option. You can also ask family, friends and or co-workers for recommendations as to who they have used in the past and if they were happy with them.

Finally, after you have found out who you would like to work with you will need to provide them with income documentation, asset verification, homeowners insurance information, purchase agreement (if applicable) and some other documents may be necessary depending on your situation. The mortgage loan process can be done in anywhere from as little as a week up to 3-4 weeks on average depending on whether you are refinancing or buying a home and how long your purchase contract states you have until closing. Therefore, shop around with a coupe of different lenders and brokers, ask family and friends for referrals, and sit down and prepare a budget along with your financial goals in order to begin the mortgage application process.

Down Payment Funds

Dave Zwierecki (First Security Financial Services) — Sun, 12 Aug 2007 20:23:13 -0700

If you are looking to buy a home, whether you are a first time homebuyer or a seasoned home buying veteran, you need to know and understand what sources of down payment funds are acceptable to use for a home down payment. Understanding what is acceptable to a lender and what is not can help you better prepare for the homebuying process and obtaining the best interest rate that you can.

Over the course of the last few years buying a home with zero money down had become increasingly simple and has grown in popularity. However, with the recent mortgage market meltdown, buying a home with no money down is beginning to, and will continue to, become much more difficult. The need for a down payment is going to become much more common once again as lending guidelines are tightening up on high loan to value loans.

So what sources are acceptable to most lenders for down payment funds and what are the guidelines for this down payment money? Usually most lenders want to see adequate funds available for a period of at least 60 days in your account. The most common methods of proof of these funds are through either a Verification of Deposit form or through 2 months of the most recent account statements. Thus, if you have "mattress money," which is money that you do not keep in your bank account or in any other type of account and you just have it sitting around your house you will want to deposit that into a bank account or investment account at least 2 months, but preferably longer, before you are ready to begin searching for a home. The requirement of having this money in your account for at least 60 days before being approved for your home loan is what is known as "seasoning" of your funds. By having the money in your account for a couple of months it shows that you have the ability to put money away, that the money is more likely to be yours and not a personal loan from a friend or family member, and that you have adequate money to use for the down payment of a home. If you are using money that was the result of a large deposit within the past 60 days for your down payment and/or closing costs of your mortgage, then you will need to "source" this large deposit. Sourcing the deposit simply means that the bank or underwriter wants you to show proof of where the money came from and that it came from an acceptable source.

Now that we have touched on sourcing and seasoning of down payment funds, what sources are acceptable to use for your down payment? Generally any funds that come from a checking account, savings account, 401k account, IRA account, money market account, stocks, bonds, mutual funds, certificates of deposit, and just about any other liquid asset account are acceptable, granted they have the 2 months seasoning requirement and there have not been any large deposits made within the last 60 days to cover all or part of your down payment. If you are taking a loan out on a retirement account, then full disclosure of the terms and payment of the loan must be included in your loan package and calculated into your debt to income ratio. Most lenders will only account for 70% of a retirement account since the money is generally deposited pre-tax and usually a early withdrawal penalty is associated with early withdrawal. The sale of personal assets is an acceptable source for down payment funds as long as proof of ownership of the asset can be established, transfer of ownership is proven, receipt for the sale is provided and value of the item can all be proven and provided.

Some other less common sources of a home down payment are borrowed funds secured by an asset, rent credit for option to purchase, credit for the value of the lot (if lot is owned already in regards to a construction loan), bridge or swing loan, cash value of life insurance policy, community pooled savings funds, and individual development accounts from non-profit agencies providing down payment matching programs. Generally non-acceptable sources of down payment funds include credit cards and credit card cash advances, personal loans, signature loans, overdraft protection on checking accounts, and cash on hand, also known as "mattress money." There are exceptions to some of the above down payment sources listed above, however these are all of the most generally accepted guidelines.

The type of financing will change some of these guidelines for what is acceptable and what is not in terms of a down payment. For example subprime lenders will allow different things than conforming and FHA lenders. This article has been based more heavily on Fannie Mae and Freddie Mac lending guidelines more than FHA and/or subprime lending guidelines. Therefore, consult with your mortgage lender about what type of financing you will be obtaining and ask specific questions about what is and is not acceptable. The information listed above will give you a very good idea though as to what is traditionally permitted and what is not.

Down Payment Assistance

Dave Zwierecki (First Security Financial Services) — Sun, 12 Aug 2007 10:53:27 -0700

Are you considering buying a home but have no idea how you are going to come up with money for a down payment? If you answered yes to this question you are not alone and roughly half of potential homebuyers in the US are in this same exact position. So how can you buy a home with very limited funds?

Saving up enough money to make a down payment on a home can be next to impossible for many consumers. Because of this, there are a variety of programs available to assist people who are interested in buying a home, but just do not have enough money available for a down payment. There are quite a few options available for consumers without money for a down payment. You can either try to find a down payment assistance program in your area or you can try getting approved for 100 percent mortgage financing, thus eliminating the need for a down payment.

Buying a home with a 100 percent, zero money down home loan is one option for those consumers who do not have enough money to make a down payment. According to a survey done a couple of years ago by the National Association of Realtors, 25 percent of all buyers financed 100 percent of the purchase price, and 42 percent of first-time home buyers bought with no money down. These numbers have increased even more over the course of the last couple of years as well. Even with lending guidelines tightening up due to the recent real estate market woes, there are still some no money down home loan programs available at this time. Therefore, having money for a down payment is not required and many people can still buy homes without having a down payment available.

Down Payment Assistance programs can be found by using a variety of different search methods. The first place I would recommend is to call your city and/or county government and family services offices. Many times they will be able to direct you in the right direction to find down payment assistance. Contact HUD at (202) 708-1112, or find your local HUD office online at http://www.hud.gov/ and see if they can provide any assistance or give you any suggestions. You can also try doing a Google search using your city or county name followed by the words "down payment assistance." The three links below contain a comprehensive list of down payment assistance programs that are listed alphabetically by state. If you are still unsuccessful there are a number of down payment assistance programs that are offered in conjunction with the help of the home seller of the house you are interested in purchasing. AmeriDream, Nehemiah Program, and Partners In Charity, just to name a few, are 3 of the most popular down payment assistance programs out there. These companies are nonprofit organizations that provide help to many families by creating a pool of funds for a down payment from the seller to you, the buyer. Down Payment help is out there, sometimes it just takes a little time, research, and extra effort to find the best option for you.

http://www.first-time-homebuyer-site.com/down_payment/down_payment_assistance_information.htm
http://www.first-time-homebuyer-site.com/down_payment/down_payment_assistance_information_-_part_ii.htm
http://www.first-time-homebuyer-site.com/down_payment/down_payment_assistance_information_-_part_lll.htm

Thus, consumers have many options to buy a home with little to no money down. Be careful which program you decide on because not all lenders will permit down payment assistance programs and not all lenders will lend to people on zero money down home loan programs. Therefore, even if you do not have a lot of money saved and put away to use for a down payment, chances are there is still a way for you to buy a home.

Tips to Avoid Foreclosure

Dave Zwierecki (First Security Financial Services) — Thu, 09 Aug 2007 21:24:39 -0700

If you are unsure of what to do about your home because you have started to fall behind on your mortgage payments or you are unable to sell your home because you owe more money that what your home is worth, do not panic. There are answers out there. If either of the above situations describe something similar to what you are going through, you need to act quickly. Waiting can only make matters worse.

The first way to avoid foreclosure is to look into refinancing your mortgage. By refinancing your mortgage, before you get too far behind, you may be able to refinance to a program that can give you at least a temporary fix until your financial situation gets back in order or until the housing market begins to improve once again. Look into adjustable rate mortgages that are fixed for at least a couple of years, interest only loans, or Pay Option ARM loans so that you can improve your positive cash-flow to help out with your situation and buy you some time.

Next, to avoid foreclosure, try contacting your lender to see if they will refinance you or if they can provide you with some assistance such as a forbearance or a loan modification. A forbearance will provide you with a temporary period of time that you will be permitted to either stop making payments on your mortgage or at least have your payments reduced for a short period of time. A loan modification is where the lender may be able to give you a lower interest rate on your loan, add on back payments to the end of your loan, catch up your late payments, etc... These two options are becoming increasingly common with the high rate of foreclosures. Lenders do not want to foreclose on you and they would rather avoid the foreclosure process if they can.

If you simply can not afford to keep your home anymore, then the best option as this point would be to sell your home. This way you can avoid foreclosure, find a more affordable home, or even a rental if necessary or desired, and save your credit from having a foreclosure reporting on it. If you are not able to sell your home for what you owe, then a short sale is a definite possibility and an option that needs to be considered. A short sale is when your lender agrees to accept a payoff that is less than how much you owe on the mortgage. You must submit a request for a short sale to the lender to be approved before you are permitted to sell your home for less than what you owe. If the lender agrees to your request, then the lender is agreeing to accept that as payment in full and you will owe them nothing further. However, a short sale could still have a negative impact on your credit, but it will still be much better than having a foreclosure on your credit.

Finally, if all else fails you can consider bankruptcy protection. A bankruptcy will temporarily stop the foreclosure process and your attorney may be able to negotiate something on your behalf with the lender. A Chapter 13 repayment plan option may provide you with a payment plan to follow so that you can avoid foreclosure and still be able to keep your home. Consult a bankruptcy attorney if you have exhausted all of your other choices to see what options you have available for yourself at this point and to find out if Bankruptcy may be right for you. Consider this only as an absolute last resort.

Therefore, even if your finances seem fairly bad or you are having a hard time selling your home there are many ways to avoid foreclosure. However, you must take action quickly and contact your lender as soon as you feel you are about to fall behind on your mortgage. Do not wait until you are behind. Contact mortgage lenders before you end up 30 days behind on your mortgage and this will leave more options open to you to refinance. Selling your home may end up being your best option, even if you need to do it via a short sale. After everything has been looked into and if there do not seem to be any options left you can always consult with a bankruptcy attorney so that you can try to avoid foreclosure. For more information please visit: http://www.themortgageu.com/mortgage/foreclosure_prevention.htm

First Time Homebuyers - Common Mistakes to Avoid

Dave Zwierecki (First Security Financial Services) — Thu, 09 Aug 2007 20:13:22 -0700

Getting ready to buy a home can be both a very exciting, yet a very terrifying experience. Most first time homebuyers have so many questions to ask, but they are unsure of who to ask. Who can a first time homebuyer trust and what can they do to insure a smooth homebuying experience?

First time homebuyers occupy a very large percentage of the real estate market. With a quickly changing real estate market, rising interest rates and tightened lending guidelines first time homebuyers can be even more confused than ever about buying their first home. The good news is that I am going to touch on a few of the common mistakes to avoid when you are buying your first home. These tips should provide some assistance with the homebuying process and hopefully help to insure a more enjoyable homebuying experience.

Buying More Home Than You Can Afford - This may be one of the single most common mistakes that a first time homebuyer can make. I know, the lender approved you for this much of a mortgage so you just had to take advantage of the full pre-approved amount. You and your spouse need to sit down together, before you even begin looking at houses or getting pre-approved by mortgage professionals, and figure out a very detailed and accurate budget. Figure out everything, including vacation money, holiday spending money, investment money, savings account funds, etc... and whatever is left over is the amount that you have left for a monthly mortgage payment. Remember you want to try and be able to maintain a similar lifestyle owning a home as to what you are living now. A mortgage lender is going to approve you for a mortgage based on how much money you make compared to how much debt you have on your credit report. A mortgage company will not care about how much money you invest each month, how much money you spend on your cell phone bill, how much money you pay a relative for a family member loan, how much your utilities are, how much you need to pay for food each and every month, how many vacations you go on each year, etc... These items do not show up on a credit report and unfortunately are not normally factored into your qualifying ratios. Therefore, you may end up being approved for a mortgage that is much more expensive than you might feel comfortable paying on. Do not get caught in the trap of buying more home than you can afford and live comfortably. Just because you are approved for more does not mean you need to buy a home for this maximum amount.

Buying A Home With Your Heart and Not Your Head - Be patient when looking to buy your first home. Your first home can be a starter home and does not need to be a "castle." Do not allow yourselves to become to emotionally attached to a home and stretch yourself to thin by buying with your heart. Do not allow yourself to buy a home that has a lot of what you want but little of what you really need. What I mean by this is to not allow yourself to sacrifice a 2nd bathroom even though you have 2 teenage daughters for a hot tub that you want. Be smart about buying your home and make sure it has everything that you need in a home and you can always add what you want in the future.

Not Getting A Home Inspection - While saving the cost of a couple hundred dollars may sound like a good idea when you are realizing how expensive it can be to buy a home, do not get cheap and avoid paying for a home inspection. Especially if the home is a little older, the couple hundred dollars spent on a home inspection can save you thousands and maybe even tens of thousands of dollars or more in the long run. Many first time homebuyers try to "cut corners" in terms of the costs of buying a home, but a home inspection is not usually one of the areas that you want to try to cut costs at.

Therefore, as a first time homebuyer, make sure you buy a home that is within your budget and not your lenders budget. Buy a home that has everything that you need it to have and do not skip the items you need for amenities that are simply desired, but not necessary. Finally, get your home inspected, especially if the home is slightly older as this can possibly save you many thousands of dollars in the long run. Follow these 3 helpful homebuying tips for first time homebuyers and you will be that much more prepared to buy your first home. For more mistakes to avoid please visit: http://www.themortgageu.com/mortgage/new_home_buyer_mistakes.htm

The Makeup of An Adjustable Rate Mortgage

Dave Zwierecki (First Security Financial Services) — Thu, 09 Aug 2007 10:04:47 -0700

So how exactly do adjustable rate mortgages work and what should I pay attention to when considering obtaining an ARM loan These are just a couple of the most common and most important questions that one needs to understand before jumping into an adjustable rate mortgage. I know that super low rate sounds great right now, but how much will it or can it adjust in a couple of years. What if something happens and your credit deteriorates and you are unable to refinance out of that adjustable rate in a few years? These are just a few of the questions that you need to ask yourself when considering an ARM loan.

An adjustable rate mortgage, more commonly referred to as an ARM loan, is simply a mortgage loan that has an interest rate that is usually fixed for a short period of time and then after that specified period of time is up the interest rate will adjust normally every 6 or every 12 months. How much the interest rate can adjust is determined by your ARM loan CAPS. Most adjustable rate mortgage loans have 2 different types of CAPS. The first CAP is a lifetime CAP. A common lifetime CAP is that your interest rate can not go any higher than 6% of your start rate. This means that if you obtain an ARM loan with an initial rate of 5% that your rate over the life of your loan can never exceed 11% (5% start rate + 6% CAP). The next time of CAP is an adjustment CAP. An adjustment CAP dictates the most that a rate can increase each adjustment period. For example, a common adjustment CAP is 2%. This means that each time your rate adjusts that you rate can not increase by anymore than 2%. So if you had a 5% initial interest rate, then your first adjustment could not increase your rate any higher than 2% for a 7% maximum. Therefore, you can see why it is extremely important to pay attention to the rate CAPS so that you know how much your rate and payment could end up at after the initial short term fixed period of your ARM loan.

ARM loan rates are made up of 2 items, the rate index and the rate margin. Your rate index is the adjustable portion of your rate and this is what determines whether your mortgage rate will increase, decrease or stay the same. Some examples of possible rate indexes are Prime (the most common in US), LIBOR (London InterBank Offered Rate), MTA (12 Month Treasury Average), COSI (Cost of Savings Index), COFI (11th District Cost of Funds Index), CODI (Certificate of Deposit Index), CMT (Constant Maturity Treasury), and there are others as well. These indexes fluctuate with the various market conditions and will be the main factor in determining what your ARM loan rate does. The other part of an ARM loan rate is the margin. Your margin is the fixed portion of your interest rate. Many ARM loans have margins that are between 1 and 2 percent. Some ARM loans have considerably higher margins. The lower your margin, the better it is for you and your margin never changes over the life of your loan. For example is you have an ARM loan and your index is 4% and your margin is 2%, this would give you a fully indexed rate of 6% and this is how an Adjustable Rate is calculated.

Therefore, there are certain items that you need to pay specific attention to when dealing with a mortgage loan such as the start rate, the index, the margin, the lifetime CAP and the per adjustment CAP. Knowing and understanding these items will help you to make a more educated decision when obtaining or considering an ARM loan. Look over your options and ask to see quotes for an ARM loan and a fixed rate loan to make sure there is a big enough difference in the adjustable rate to take on the added risk of an ARM. For more informaiton on ARM loans see: http://www.nomoneydown123.com/Ohio/is_an_arm_the_right_loan_for_me.htm

Your 3 Day Morgage Right of Rescission

Dave Zwierecki (First Security Financial Services) — Thu, 09 Aug 2007 01:13:15 -0700

Have you recently closed your mortgage loan on a refinance of your primary residence and now you have a 3 day right of rescission? Why does this exist, how does it work and what does this permit you to do? While the 3 day right of rescission may be a simple basic item, I felt that it was important enough to touch on and remind everyone what it is, how it works and why it is in place.

A 3 day right of rescission is given on all 1st mortgage loans on primary residences. This 3 day right of rescission provides a borrower with some time to review all of their closing documents and to make sure that the loan is one that they wish to keep. A borrower has until midnight on the 3rd day to cancel the loan. All cancellations should be sent out or faxed to the lender, the mortgage broker and the title company to be sure that your right to cancel has been viewed by all parties and the appropriate measures have been taken to cancel your loan before it funds.

During your 3 day right of rescission, you are given 3 business days to make sure you understand what you are getting yourself into. Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and Saturdays all count as rescission day. For example if you closed on a loan on a Monday, then your 3 days would be Tues, Wed, Thurs and then your loan would fund on the fourth day which would be Friday. Another example would be if your loan closed on a Thursday, then day one would be Friday, day two would be Saturday, day three would be Monday and your loan would fund on the fourth day which would be Tuesday. Federal holidays also do not count as a rescission day. Holidays such as Christmas, Thanksgiving, Labor Day, Memorial Day, Independence Day, etc... would not count as a rescission day.

Understanding how your right of rescission works and your deadlines to cancel a mortgage transaction are very important. Your mortgage is a very big liability and probably the biggest liability that most consumers will ever take on and it should be treated that way. If you ever need to cancel a mortgage transaction before your 3 day right of rescission is up, then you will need to notify the lender and the title company in writing of your intentions to cancel the mortgage loan. It is highly recommended that you notify the lender and title company via phone and via mail and/or fax in order to insure that your request to cancel your loan is received. For more information on your right of rescission please visit: http://www.fshomeloan.com/content/recision_period.htm

Pay Option ARM Loans - Tips and Information

Dave Zwierecki (First Security Financial Services) — Wed, 08 Aug 2007 19:42:09 -0700

Can you really get a $200,000 mortgage loan for a payment that is only $644/month as Lending Tree is advertising. Can you really get a $150,000 loan for a payment that is only $450/month as Quicken Loans is advertising? You have probably all heard of these Pay Option ARM loans on television, radio, and/or the internet, but many of you probably don't really understand how they work. Remember the old saying "if it sounds too good to be true, it probably is."

So what exactly is a Pay Option ARM loan, a Smart Choice Loan, a Secure Advantage loan, Pick a Payment loan, or any of the other variations to the name of the loan most commonly referred to as a Pay Option ARM loan? A Pay Option ARM loan is a loan that provides you with multiple monthly payment options each month when you are making a payment. Many of these types of loans, offer 3-4 different payment options. For example a Payment Option ARM that offers four payment choices may offer an interest only payment, a 30 year fixed payment, a 15 year fixed payment, and a lowest monthly payment option. Rates on these programs usually start as low as 1% and the minimum payment rate can be based on this start rate for as long as 5 years. Sounds great so far, so where do I sign up?

The part you are not told about or that there is not much focus on, is the fact that your minimum payment is going to usually (almost always) be negative amortizing. This means that you are not even paying enough of a payment each month to cover the interest portion of your payment, and your mortgage balance is actually rising instead of decreasing. Even though your lowest payment option may be based on a rate of 1% or 2% or whatever it may be, the actual rate of the loan is based on the current market conditions and your rate index plus your rate margin. The bigger the difference between your start rate and the actual fully indexed rate means more negative amortization. Your rate margin is a fixed part of your rate that you need to pay a lot of attention to, and your index rate is the adjustable part of your rate that is based on a rate index such as Prime, LIBOR, MTA, etc... Rates have been headed upwards and so have these indexes. This means that the higher your rate increases, the more negative amortization you are experiencing and the more your mortgage balance is increasing each month if you choose to only make the minimum payment option. Many mortgage professionals are increasing your rate margin and they are making top dollar to do so. By a mortgage professional increasing your rate margin, they are being compensated by the lender for charging you a higher rate. Most consumers are not aware of the margin, what it should be or what it could have been and do not know enough to ask, so they end up with a high margin. It is too easy for mortgage professionals to increase your margin, because most consumers do not even realize what it is and they are not being told about what their fully indexed rate is (margin + index). Unlike a traditional mortgage where most consumers see what their exact rate is on their mortgage on all of their closing paperwork in black and white, the rate on the Pay Option ARM loans is not always that easy to understand. This ends up meaning higher interest rates, higher payments and more negative amortization.

These loan types are not all bad though and when used properly, in the right situations for the right borrowers can be a very strong tool for some borrowers. Pay Option ARMs can be very beneficial to self-employed borrowers, commissioned borrowers, real estate investors and anyone else who has income that fluctuates or is seasonal or anyone that needs to improve their monthly cash flow for a temporary basis. However, because these types of loans are being sold to consumers who are not right for them and because these loan types are being sold under deceptive terms, there is a lot of confusion about Pay Option ARM's. Therefore, always make sure you read in your final paperwork in detail, the rate and margin information, and ask a lot of questions about anything you are unsure of. If the deal sounds too good to be true, show the paperwork to a friend, attorney, or another mortgage professional (that you trust) and ask their opinion of what they think about the deal you are getting. Remember, a house is not only a large investment, but a large liability and it should be treated accordingly. Do not just take the word of the person selling you on the loan and seek other advice if needed. For more information on Pay Option ARMS see the following links: http://www.nomoneydown123.com/Florida/pros_and_cons_of_pay_option_arm_loans.htm and
http://www.mtgprofessor.com/Tutorials2/option_arm_tutorial.htm

Self Credit Repair - Tips and Information

Dave Zwierecki (First Security Financial Services) — Wed, 08 Aug 2007 19:30:38 -0700

Do you really need to pay someone hundreds and many times even thousands of dollars for them to improve or repair your credit? Credit repair is one of the most popular topics right now and there are many things that you should know before hiring the services of a professional credit repair company.

Anything that a credit repair company can do, you can do yourself. By repairing, rebuilding and fixing your credit on your own you can not only save a lot of money but you can increase your credit scores and improve your credit through a variety of different actions. The first thing that you need to do when you are looking to repair, rebuild or improve your credit is to obtain a copy of your credit report. I highly recommend going to http://www.annualcreditreport.com to obtain a free copy of your credit report from all 3 credit bureaus. You will want to select your state and then follow the simple instructions to order your free credit report. You are able to utilize this service for free one time per year. Once you have obtained a copy of your credit report from each of the 3 bureaus you will be able to dispute any information contained within your report right online, directly with the specific credit agencies that are reporting the information. Make sure that you write down all of the user-names and passwords that you use while creating your account(s) and save them in a safe place.

The first item that you should check your reports for are inaccuracies and information that is reported erroneously. Wrong information is one of the top reasons for declines in a person's credit score. A consumer organization estimated that up to 79% of Americans have credit reporting errors contained within their credit report and 25% of Americans have errors that could cause them to be denied for financing. This is one reason why it is very important to check credit reporting errors at least once per year. Anything that is wrong or seems like it could be wrong, dispute it. If you have proof of the error, dispute the item(s) online and then mail in proof of the error to the address that the credit bureau provides. If there are any credit inquiries on your credit that you did not initiate, dispute them as well. Stay on top of your disputes and document the dates and times that you started your disputes and what you have done. The credit agencies and creditors are on a time-line to process your dispute or the inaccurate information must be removed from your credit.

Next, if you have borrowed over 50% of the maximum credit limit on any of your credit cards, contact them and ask them if they can increase your credit limit. This will be favorable to your credit scores by improving your balance to limit ratios and this accounts for roughly 35% of your credit score. If they will not increase your limit or they won't increase it enough, then work on paying your balances down below 50% of your limit.

The next method of repairing your own credit is to see if any of your family or friends will add you to one of their credit cards with a long and good payment history and a good balance to limit ratio as an authorized user. This can help to increase your credit score within a little as 30-60 days. This method of credit repair or credit rebuilding is also sometimes referred to as credit piggybacking and has been around and used for years. This method of improving credit scores may not be around for very much longer, as lenders and the credit bureaus would like to see this benefit taken away, so utilize it while you still can.

Finally, there are a lot of other smaller factors that you can do to repair your credit. Stop inquiring about new credit for awhile, do not close older unused accounts unless absolutely necessary, limit the number of credit cards that you obtain to no more than 5 (preferably 2-3), make your future payments on time, pay off all collection accounts or have them removed after 7 years, and make payments that are more than the minimum required (even if it is only a few dollars more). By staying on top of your credit and knowing the basics of credit and disputing errors you can repair and/or rebuild your credit quickly, easily and efficiently for a little bit of your time and effort instead of paying hefty fees to a credit repair company. For more credit repair tips and information please visit: http://www.nomoneydown123.com/Ohio/credit_problems.htm and
http://www.federalreserve.gov/pubs/bulletin/2004/summer04_credit.pdf

The Real Truth About Credit Inquiries!

Dave Zwierecki (First Security Financial Services) — Wed, 01 Aug 2007 21:12:40 -0700

I am sure you have heard someone tell you not to let any other companies pull your credit because it will lower your credit at some time or another. You have probably heard a lot of things about credit inquiries and how they will lower your score. In this article you will finally find out the real truth about this much confused topic.

Credit inquiries can acount for roughly as much as 10 percent of your total credit score. This means that if the maximum credit score possible is an 850, credit inquiries could affect your score by as much as approximately 85 points, although you would truly need to have a lot of inquiries in order to see anywhere even close to this type of impact on your credit score. Wow, 85 points can be quite a big swing for anybody when it comes to their credit score. So let us find out about what inquiries affect your score and what inquiries do not.

Soft Credit Inquiries

Soft credit inquiries are those that are requested by yourself to check your own credit, those made by businesses to extend offers or services to you, those initiated by businesses that you already have an account with, and inquiries that are made by possible employers. These inquiries will most likely still report to your credit report, however they will not affect your credit scores good or bad. Therefore, this debunks myth number one that if you check your own credit your credit score will suffer.

Hard Inquiries

Hard credit inquiries are those that will affect your credit score and they are initiated by a creditor when you apply for an auto loan, a credit card, personal loan, cell phone, mortgage, or anything else you authorize a lender to pull your credit for in order to obtain some type of financing. These inquiries can affect your credit score and bring your scores down if you have a lot of them in a short period of time. There is some truth to the myth that every time you apply for financing your score can go down. However, read on to find out the specifics to this one.

Credit inquiries can affect different people in different ways. For example a person who has 5 new accounts opened up within the past couple of months is more likely to take a bigger "hit" to their credit score for the number of credit inquiries that they have, as opposed to someone who simply has only 1 new account opened in the past couple of month with the same number of inquiries. Why do credit scores lower for the number of inquiries that you have? The more inquiries you have puts you in the class of looking for more credit which increases a person's risk. Credit inquiries will normally not affect your credit score by very much unless you have a lot of inquiries on your credit report within a short period of time.

Inquiries from Rate Shopping

If you are shopping for a mortgage loan or an auto loan, you will generally always have a 30 day window to do your rate shopping and all inquiries made within that 30 day period of time will only count as 1 inquiry against your credit score. Older credit scoring models used to have a 14 day window and the newest credit scoring models are now increasing this to a 45 day window. To be safe though, plan on having a 30 day window to shop around for the best financing deal for your auto and mortgage needs. Some lenders pull their clients credit using older scoring models because they are normally cheaper than using the newest credit scoring models that have just come out. This debunks the myth that you can not shop around with other companies or have multiple companies pull your credit or else your score will go down. This has been an old sales tactic that many people have used for a long time to try and prevent their clients from shopping around elsewhere.

Therefore, credit inquiries can definitely affect your credit score, they should not limit your ability to shop around for a mortgage or auto loan with multiple companies, and you should limit the number of creditors that pull your credit for financing purposes. Do not be afraid to shop around, but try to keep all of your inquiries within only a couple of days from each other to make sure you are comparing similar rates.

Short Sale Information

Dave Zwierecki (First Security Financial Services) — Tue, 31 Jul 2007 22:33:21 -0700

Are you trying to sell your home but you can't seem to find anyone willing to buy it for enough to cover what you owe on it right now? If this sounds familiar, you are not alone as thousands of homeowners are going through this same exact situation each month. Find out how you can sell your home for less.

If you are struggling to find a buyer for your home who will pay you enough to cover your mortgage payoff, you are not alone and there may be a solution for you. A short sale can be very useful in these types of situations and they are becoming increasingly common as the real estate market has been taking a bit of a "beating" as of late. A short sale is when you sell your home and the lender agrees to accept a balance that is less than the full amount that you owe them. Now why would the lender agree to accept less than the full amount that is due to them? This is a very good question. First off a short sale benefits the lender by getting the property off of their books and saving themselves from the possibility of having to foreclose on the property. If the lender has to foreclose on the property, the amount of time and money they will need to put into the process will be quite considerable. Therefore, by agreeing to allow you to sell your home for less and take what the market will give you, helps you out and helps the lender out.

If you are in this situation then working with a real estate agent who is familiar with short sales will come in quite handy. A real estate agent who is knowledgeable and experienced in short sales can really make this process go much smoother and can give you a better chance at getting your short sale request with the lender approved. Once you have a bona fide offer made on your home that is not enough to cover the cost of the mortgage, you need to contact your lender and request a short sale. You will need to send in your request to the lender with all of the details of the sale along with your request for the short sale itself. Once the lender receives your request they will review it and all applicable documents and information and make a decision as to whether they will accept your short sale request or not. An experienced Realtor can give you assistance with this request to give you the best chance for it to be approved.

Once your request for a short sale has been approved and the home is sold, you are relived of any further obligations to this home and mortgage. The lender will release you from any remaining balance and you will be done. However, there has to be a drawback to this, right? You can't just get out of this "scott-free" can you? Yes, there is one drawback. Normally, the mortgage lender will provide you with a 1099c, a cancellation of debt form, in the amount of the shortage of money that they received from the short sale. This does not mean you have to pay any money back, but what it does mean is that you will have to report this on your taxes for the appropriate tax year and this amount will be treated as "normal income" and you will have to pay taxes on it as though you had earned the money during that year. A small price to pay to be able to get away from your home mortgage debt without a foreclosure affecting your credit. For more information on short sales please visit: http://www.nomoneydown123.com/Ohio/short_sale.htm

Therefore, if you have any thoughts that you may have a hard time selling your home for what you owe on the home, you may want to ask around to some various Realtors if they have had any experience dealing and assisting with short sales before you decide on which one to sign a contract with. This may help out in the long run, if necessary.

Sell Your Home Quicker - Tips for a tough market

Dave Zwierecki (First Security Financial Services) — Tue, 31 Jul 2007 21:07:40 -0700

With a tough real estate market right now, selling your home can be very tough, stressful and time consuming. Read on for some tips on how to improve your chances at selling your home quicker without having to lower your price too much.

One of the first and most important tips that I can give you, and you have probably heard a million times is to improve the curb appeal for your home. The exterior of your home is the first item that people are going to see. Therefore, there should be a lot of emphasis placed on your homes exterior. Power-wash your siding, re-mulch your landscaping beds, trim up bushes and hedges, add colorful flowers, add some cheap bushes in bare spots, spot seed your lawn if you have any bare spots, water your lawn to "green it up," weed and feed your lawn as well, re-paint the siding if needed, pick up any lose debris in the yard, rake up leaves, trim tree branches if necessary, keep yard mowed very regularly, edge along your driveway and your sidewalks (makes a big difference), pull out all weeds in landscaping beds, waterproof wood patios, re-seal concrete patios, hide or store away any unsightly or run down outdoor furniture and/or decor, repaint or replace your mailbox if necessary, clean outside windows, make any necessary repairs to siding, roof, flashing, shutters, etc... and anything else that you can think of to improve your curb appeal.

Th next tip is to have your home staged to help you with your home selling efforts. You can either hire a home stager to come out and stage your home or you can try to do it yourself. A home stager is probably less expensive than you might think and this can save you literally tens of thousands of dollars in the end by selling your home for a higher value. The cost to have your home staged professionally is only a small fraction of the cost that you would spend on your home's first price reduction. You can either hire the home stager to do all of the work for you or you can simply hire them to consult you and give you advice on what they recommend that you do. A professional home stager can easily spot the trouble areas and uses creative problem solving to help the home sell. Having your home staged can not only increase the price that you end up selling your home for but it can give you an advantage over the other homes for sale and help you to sell your home quicker.

The third tip is thoroughly cleaning your home. Clean out the inside of your cupboards, drawers, microwave, oven, refrigerator, bathrooms (tub, toilet, sink, floor, etc...), cobwebs off of ceilings, receptacle covers, dust furniture, clean all interior glass and mirrors, kitchens, and everything else that you can think of to clean. Give special attention to the kitchen, bathrooms and doorways as these are the main items that people look at with great detail. Consider steam cleaning the carpets or even replacing them if necessary.

Tip number four is to do minor repair and remodeling work that is needed. This means tighten all door handles, make sure doors open freely and do not stick, caulk all counters and tubs, touch up paint or repaint rooms entirely if needed, fix loose railings, nail holes in walls, broken receptacle covers, leaky plumbing, loose or missing shingles, broken trim and/or molding, and anything else that might need a quick fix.

Reducing clutter is tip number five. Consider renting a storage facility to place boxes, furniture and other odds and ends in while you try to sell your home to make your home appear much roomier. We never realize how much stuff we accumulate over the years and by making some of this stuff disappear we can open up our rooms that they appear much roomier and spacious. You can also move some of your stuff in with friends, neighbors and/or family if you want to save on the storage fees.

Finally, the last tip is to hire a Realtor and make your home available for showings anytime. There is nothing worse than a homeowner who limits the days and times that there home can be shown to potential buyers. Potential buyers have a lot of choices out there and if they can not get into a home to view it when it is convenient for them, they will move on to the next home. The more homes that a buyer looks at, the lower your chances are that they will buy your home. Let your Realtor know that they can show your home anytime, just give you at least a short bit of notice beforehand and you can have your family ready and out of the house. Most potential buyers do no feel comfortable in a home where the homeowners are in the house. This feeling of being uncomfortable is what the buyers leave with, and it lessens the chances of them buying your home as well.

Therefore, even though this is a long list of the many things that you can do to make your home more appealing and to help to sell your home quicker, you do not need to do everything on this list. This is a guide only to help you think of items that you may not have already thought of to improve, repair, or just simply do. Best of luck to your home selling experience and I hope you are able to sell quickly at a high price. For more tips and information on selling your home please visit: http://www.gofirstsecurity.com/Florida/staging_your_home_for_selling.htm

David Zwierecki is a licensed mortgage broker in the states of Ohio and Florida with over 10+ years of experience in the mortgage industry. For more information, further tips or just to learn more about mortgages, real estate and credit please visit: http://www.gofirstsecurity.com or http://www.TheMortgageU.com

What Do You Really Need From Your Home???

Dave Zwierecki (First Security Financial Services) — Tue, 31 Jul 2007 18:00:57 -0700

Before buying a home or entering into a purchase contract to buy a home there are many items that need to be carefully considered. These items are even before you start talking to a mortgage broker, your local bank, and/or a Realtor as well. Read on to find the single most important step in the homebuying process that is often not given nearly enough thought.

You have finally decided it is time to get out of your apartment, rental home or your parents home and buy a home of your own. However, you do not exactly know where to start, who to contact or what your first step should be. Rest assured that there are many consumers in your exact situation, asking these same exact questions everyday. One of the most overlooked items of the home buying process is buying a home that does not fit your exact needs or lacks the functionality that you need in a home.

Home functionality and your housing needs are one in the same thing. When I say home functionality what I mean is what do you absolutely need from your home to be happy, comfortable, and for the home to be functional? For example, if you were looking to buy a home in the hottest part of Arizona, buying a home without air conditioning would probably not be a smart buy. If you have 4 teenage daughters, buying a 1 bathroom home would probably not be a very good decision. If you have a family that consists of 5 children and 2 adults, a home with 1 bedroom would definitely not fulfill your housing needs. A two story home with all of the bedrooms upstairs would not be good if you had an elderly parent or handicapped family member who could not make it up stairs. Therefore, your home needs to be able to function well for you and your family's needs.

Before you talk to a mortgage professional or a Realtor, you and your spouse should sit down by yourselves and create a list of your housing "needs" versus your housing "wants." Too many people do not take this critical step in the homebuying process and they end up with a home with a lot more of their "wants" instead of all of their "needs". Stick with this list and do not deviate from it when looking at homes. Here is a list of some specific items to pay attention to for your specific needs:

* school systems
* distance to employer(s)
* number of bedrooms
* number of bathrooms
* house size
* yard size
* heating and cooling systems
* age of home
* rural, suburban, or urban
* crime rates
* nearby businesses (types, how many, traffic, etc...)
* storage space
* how many people are in your family
* any handicap needs (house with all Bedrooms on 2nd floor would not be good for someone who could not make it up stairs)
* home office needs
* garage size
* house location (near a "dump", nuclear power plant, power lines, night club, highways, etc...)
* city water, city sewer, septic tank, etc...
* many, many more items too

Now some of the "wants" that people have such as a pool, hot-tub, walk-out basement, extra large house, extra car garage, extra bedroom, finished basement, super sized lot, gourmet kitchen, oak paneling, brick front, island counter, library, enclosed patio, sun room, etc... should definitely be put behind your list of housing "needs." Too many people are sacrificing what they need, for the more superficial items that they do not need. This can cause emotional distress, family problems and extreme dissatisfaction in your homeownership experience and with your family life. While an extra large house may be nice to show off to your friends and such, remember you are the one who has to live there and make the payments there. Buy within your means, stick to your list of housing "needs" first and foremost, and then after you have found some houses that satisfy all of your needs, you can begin looking at which houses contain some of your "wants" as well. For more information on what to look for in a home visit this link: http://www.fshomeloan.com/Toledo-Lucas/what_should_i_look_for_in_a_home.htm

Preparing for Home Ownership - What can I do to get ready?

Dave Zwierecki (First Security Financial Services) — Mon, 30 Jul 2007 20:06:47 -0700

Preparing for Homeownership!

So you are thinking about looking into buying your own home, but you don't have any idea as to where to begin, what to do, who to talk with first, what type of mortgage to get, how much money to put down, what documents you will need, so what should you do. If this sounds anything like your current situation, don't worry because you are not alone and plenty of people ask these same questions each and every day. Although, chances are if you are reading this article, then you are heading in the right direction.

Where do you begin then, and who should you talk with first in order to prepare for homeownership? First, before you do anything else, you and your spouse should sit down, figure out a good budget that still allows for you to live the lifestyle you are accustomed to, and invest the amount of money that you need to, in order to be ready for retirement when you have to. Do not, and I repeat do not, get caught up in the game of "keeping up with the Jones's" or the "status symbol" of having a huge house that everyone envies. I guarantee they won't envy the payment, nor will they help you make the payment each and every month (for most likely the next 30 years). Life is too short to stress about whether or not you will be able to make your mortgage payment, pay for your child's braces, buy your child new school clothes, etc... Live within your means and enjoy what you do have.

After figuring out your budget you should also figure out what you need from your house. Do you need to have 4 bedrooms because you have 3 children? Do you need to have 3 bathrooms because you have 2 teenage daughters who get up for school at the same time you go to work? Do you need to be in an excellent school district because you have school aged children? What are your needs and what functionality do you need from your home. Buying a two story home with one bathroom upstairs would not be a good idea if you have someone who can not walk up stairs living in the house. Make a list of "needs" and make another list of "would like to haves." Don't settle on the "needs", but learn to settle without some of the "would like to haves."

Now you are ready to begin and next you should start off by talking with neighbors, friends, relatives, co-workers, etc... to find a reputable mortgage company or a reputable Realtor to begin working with. If you find a great Realtor first, then start off with the Realtor. If you find a good Mortgage Professional first then you should start off with the Mortgage Professional first. Many times it makes things easier to get pre-approved for a mortgage first so that you know you can indeed buy a house, how much you can afford and also it to show Realtors and sellers that you are serious and ready to buy. Good Mortgage Professionals and good Realtors can be very hard to find and once you find one, hold on tight and never let go.

Your Realtor will be able to find the houses for you to look at based on your needs and your Mortgage Professional will be able to put together your mortgage options, down payment options and program choices based on your financial situation and financial goals. You may qualify for a zero down mortgage loan or you may need to put down 5-10% in order to buy a home, depending on your financial situation, credit scores, debt to income ratio, etc... The most typical mortgage program right now for a home-buyer is a 30 year fixed rate mortgage. This offers the most comfort and affordability of almost any other mortgage program because the rate is fixed for the life of the loan and you are stretching your mortgage out over 30 years. You can always pay extra whenever you want if you desire to pay off your mortgage quicker as well. There are many other programs available as well, but especially in this real estate market right now, the 30 year fixed will usually be the best and most reliable option. Do not get "suckered in" to one of those television advertised deals of a 300,000 mortgage for only $800. If it sounds too good to be true it usually is.

You will need to have ready for your mortgage professional:

Your last 2 year's of W2's or tax returns
Your 2 most recent pay stubs
You 2 most recent bank statements (for checking and savings accounts)
Any other liquid asset statements (401k, IRA, mutual funds, stocks, bonds, money market account, etc..)
Bankruptcy discharge papers (if applicable)
Divorce Decree (if applicable)
Purchase agreement (if you already have one)
Name and phone number of your insurance agent (if you know who you will place your homeowners insurance through)
Any applicable supporting documentation for additional income, credit documentation, assets, etc...

Following the above directions to be prepared for homeownership won't guarantee that everything will go as smoothly as possible, but they will help to make everything goes much smoother and lessen your chances for future problems with your experience of the homeownership process.

Credit Problems and Options

Dave Zwierecki (First Security Financial Services) — Sat, 28 Jul 2007 12:51:28 -0700

Credit Problems? What can be done?

Do you have credit problems? Are you looking for help with repairing your credit? Do you want to know what your options are? Are you trying to buy a home with bad credit? Do you need 100% financing but your credit score is too low? If any of the above questions describes your situation or you currently have some issues with your credit score(s) being low then this is indeed a must read.

Low credit scores and bad credit can cause many problems in today's world with so much emphasis on almost everything you do placed on your credit profile. Whether you are applying for a new credit card, applying for a personal loan, wanting to get financed for a mortgage, trying to find a homeowners or auto insurance carrier, applying for a new job, trying to rent an apartment, or whatever it is you need to do, everyone wants to look at your credit profile and credit scores and use this to help base their decision on. To be honest, this is extremely scary. Many people have credit problems because of bad situations, bad choices made at a young age, life threatening illnesses, family problems, and a wide variety of other reasons that happen to come our way in life. The problem for most people is that once they get into a bad situation and their credit suffers due to this, it becomes a very tough and sometimes never-ending battle to dig yourself out of this situation. Lets face it, bad things happen to very good people.

There are some solutions and assistance available out there though to improve your credit, your credit scores and your financial situations. The first thing that you need to do is to obtain a copy of your credit report and look to see how good or bad your credit actually is, where the deficiencies in your credit report are and whether there are any inaccuracies being reported within your credit report. This will give you an idea of where to go next and as to what you available options are. You can obtain a free copy of your credit report once per year by visiting http://www.annualcreditreport.com/.

Your next step will be to determine how bad your credit actually is and which of the following is going to be your best option. You can choose from trying to repair your credit yourself, hiring a credit repair company to work with you on fixing your credit report, you can hire a credit builder types company to help rebuild your credit almost overnight, or you can find a mortgage broker that would be willing to assist you with improving your credit scores. There are various ways sites online that offer numerous tips on how to repair credit, sample credit dispute letters, credit scoring factors and everything else you can think of. Here are a few links with a lot of good information on self credit repair/maintenance help:

http://fshomeloan.com/index_files/mortgageblogger.htm
http://www.creditinfocenter.com/forms/
http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm
http://credit.about.com/od/creditrepair/Credit_Repair.htm

Self credit repair can be done for very cheap and can also produce great results. The keys to making self credit repair work are to put forth a genuine effort of many different credit repair tactics and to stay persistent with your credit repair efforts. For self repair you must obtain copies of all of your credit reports from all 3 credit bureaus. Next you will dispute anything that is improperly listed, that contains errors or is listed unfairly. If your first round of disputes are unsuccessful you will send out another round of disputes and repeat this process until your credit has improved and the items are reporting correctly. You must keep good records of everything that you mail out, copies of everything and copies of all correspondence back from the credit bureaus and/or the creditors. Obviously there is more involved to fixing and improving your credit by yourself, however for the sake of time and simplicity I am only going to provide the basics for you here in this article. You can find out much more detailed information from clicking on the links above.

So, if you realize or decide that self credit repair help may be too extensive, time consuming, complicated or just plain difficult you may want to consult the services of a credit repair company. BE ADVISED THAT THESE COMPANIES ARE USUALLY CHEAP! There are literally thousands of companies that offer credit repair. Some of these companies are scams, some are worthless and provide an expensive service that does not follow through on their promises, and yet there are some that are very good at what they do and they provide you with a truly great service. Credit repair companies usually charge on average anywhere from $500 up to $1,500 per person. Usually, this will cover 1 year of credit repair. Other companies charge by the month, offer discounts for multiple customers and offer discounts for extended service agreements. Shop around to find a credit repair company that you can trust. Do your homework before entering into an agreement to work with one of these companies. Search sites such as the Better Business Bureau at http://www.bbb.org/, Rip Off Report at http://www.ripoffreport.com/, the appropriate state attorney generals office at http://www.naag.org/, or any other website that you know of that may be able to provide more of a background on the company you are considering dealing with. I also highly recommend doing a Google search on the name of the company to see what type of information comes up. If people have had bad experiences with a certain company, they will write about it online somewhere and if they do, it will generally come up in a search. Try this search with the company name "in quotes" and not in quotes for best results. Credit repair companies can help out, but again be cautious as to which company you decide to work with. Here are a few companies that I have come across in the past that seem to be good at what they do and seem to be reputable from what I have seen and heard:

http://www.thecrcgroup.com/
http://www.htdifinancial.com/

If you absolutely do not believe bankruptcy is the route that you would like to take and you want to do your best to pay back most or all of what you owe, you can consider a consumer credit counseling or a consumer credit consolidation program to help you gain control of your finances again. Again these types of companies are a "dime a dozen" and there are literally thousands of them available out there. You should do the same type of research on these companies as mentioned above on the credit repair companies as well. Anyhow, the way these companies work is that they have prearranged agreements with many of the large credit card and lending firms throughout the nation that allow them to set up accounts for their clients to pay back their debt while reducing their balances, lowering their interest rates, freezing late and over the limit charges and/or any combination of these items. Therefore, you can save money in fees, interest and or lower your overall balance with some or all of your creditors in order to be in charge of your finances once again. If you do become involved with one of these type of companies please be advised that many lenders will consider these companies similar to filing bankruptcy or barely a step above bankruptcy. Your choices can be hindered or taken away altogether when you are trying to obtain new credit such as buying a house or a car while being in consumer credit counseling. Many mortgage lenders will not lend to a borrower when they are currently in CCC. While this does not make complete sense in regards that the consumer thinks they are doing the right thing by paying off their debt, it is still considered the next closest thing to bankruptcy from a lenders view. Studies have shown that consumers who have enrolled in the services of a consumer credit counseling service are more likely to default on their mortgage loan that consumers who have not. This makes it a higher risk to a bank. However, working with these types of companies can help improve your credit and can often result in less damage to your credit.

Another option to improving your credit scores is by using a credit rebuilding company. You can try to do some of the credit improvement techniques listed above, such as a credit repair company or self help credit repair, in addition to using a credit rebuilding company. A credit building or credit rebuilding company will basically add seasoned and important trade-lines to your credit report for a fee. These can be some of the most costly ways to improve your credit scores and your credit report but these can also provide immediate benefits with some of the best results. The 3 most important factors in determining your credit score are payment history, balance to limit ratios, and length of credit history. By buying tradelines on your credit report you are able to take care of all 3 of these items. You are paying to utilize someone else's credit history as an authorized user (most of the time without any actual access to the account) and in return your credit report will add their excellent payment history on the "said" account, their great balance compared to credit limit will be added to your report, and their long established/seasoned credit history will be added to your report in order to improve your credit scores. While this type of credit building is permitted right now, there is talk from the credit repositories themselves to start preventing or avoiding this type of credit scoring loophole. If you think this option may be good for you, then you may want to look into it sooner than later. You can also use this method at a much lower price by using a friend or family member to add you as an authorized user to their account versus paying a company to do this for you. Here is a link to a company who has built a strong name and reputation for themselves for providing this type of service:

http://instantcreditbuilders.com/

Finally, you can choose to file bankruptcy as a last resort. Filing bankruptcy over the past year or two has been made slightly harder to do than it was in the past as bankruptcy filings had reached all time high levels in past years. When filing a personal bankruptcy you have 2 options. You can file a Chapter 7 Bankruptcy or you can file a Chapter 13 Bankruptcy. A chapter 7 bankruptcy is one in which most of your debts are simply wiped out and you are given a clean slate. Most people who file bankruptcy choose to file this type of bankruptcy over a chapter 13 for many reasons, of which many are quite obvious. Usually a chapter 7 bankruptcy is fully completed within 3-6 months start to finish. A chapter 13 bankruptcy is a repayment plan. The repayment plan can last anywhere up to 5 years to pay back a good portion or possibly all of your outstanding debt. If you are unable to file a Chapter 7 then your only option for bankruptcy will be a Chapter 13. If you can not demonstrate the ability to pay the Chapter 13 bankruptcy then most likely you will not be able to file bankruptcy altogether. A chapter 13 bankruptcy will not be completed, also referred to as discharged until the payment plan has been completely paid off. A bankruptcy can help many people in many different situations and provide a fresh start for them. While the level of bankruptcies in recent years has been record setting the profits of the credit card companies are still reaching record levels as well. Therefore, if you have decided to file bankruptcy you should not be embarrassed by it nor feel like you are doing something terrible. Many consumers simply run into bad situations, whether they or a family member has suffered a life threatening illness, lost a job, or some other unfortunate situation and bankruptcy can help them to get back on their feet again, get a fresh start and help to relieve the stresses caused by money problems. Here are some great links about bankruptcy:

http://www.bankruptcyinformation.com/
http://bankruptcy.lawyers.com/Bankruptcy-FAQ.html
http://wiki.answers.com/Q/FAQ/1784

Here is an article that I wrote in another blog of mine located at:
http://fshomeloan.com/index_files/mortgageblogger.htm.

This information about credit and credit scoring is still up to date and very worthy of reading about credit scoring and credit reports. Please contact me if I can be of any further assistance to you about any of the information contained within this report. Some quick tips for helping to increase your credit score:

* Know and understand your credit and how credit scoring works

* Review your credit report 1-2 times per year

* Request limit increases to provide better balance to limit ratios (do not use extra limits)

* Pay all accounts on time and make sure you do not go past 30 days late

*Avoid allowing any accounts to go into a collection status

*Avoid bankruptcy

*Never max. out your credit cards

* Ask questions if you don't understand something on your credit report

* Dispute inaccuracies and errors as soon as they are discovered

*Keep you balances 40% or lower from your credit limit on revolving credit

*When shopping for a mortgage or auto loan try to do it within 14 days so that it only counts as 1 inquiry

* Do not close revolving accounts after you pay them off

* Don't be afraid to ask friends and family for help or advice if you get into a jam

* Don't go crazy applying for a lot of new credit

* Use some common sense

* Look into some of the alternative rebuilding credit methods mentioned above

* Establish a long history of credit

* Don't think that if you pay for everything in cash and don't have any credit that this is good for you.

* It may help your debt to income ratios, but it will not necessarily help with financing for a mortgage or with having a good credit score.

* Do not live on credit cards and manage your credit wisely

* Be responsible when utilizing credit and don't over extend yourself

* If you get into credit trouble search for a solution early on, communicate with your creditors to find a solution before your credit is destroyed. Most lenders are willing to work with you as long as you communicate with them.

Unfortunately credit and credit scoring has become to important of a part of our lives as it can affect so many different things. Be smart and try to maintain the best credit rating that you can, utilize the advice and the links I have provided for you and don't be afraid to ask for help when you need it. The worst thing you can do is to do nothing at all.

Fees, Fees, Fees

Dave Zwierecki (First Security Financial Services) — Fri, 27 Jul 2007 18:14:25 -0700

Whether you are buying or selling your home fees are an inevitable part of the closing process. What do they all mean though and are they all really necessary?

Unfortunately when you are dealing with real estate there are always going to be fees and closing costs involved in the process. Even if you are not obtaining a mortgage on the property, there will still be fees associated with the real estate transfer, such as a recording fee, transfer fee, title/attorney fees, notary fees, doc stamp, etc... Even if you are obtaining a mortgage on the property and you are using a lender that is advertising no closing costs or no fees, chances are you will still have to pay for items such as an appraisal fee, your 1st year of homeowners insurance, your tax and insurance impound account deposit, and quite possibly an application fee. But how can these lenders avoid all of the other fees that you have heard about or noticed in prior real estate transactions. The answer is very simple, they increase your interest rate on your mortgage loan to account for the amount of money you would have had in fees, and then some. Many of these lenders advertising no closing costs or fees will even add a pre-payment penalty to your loan to make sure that you stay in it for at least a few years so that they can recover the money that they paid for your closing costs.

So what are all of these fees for and what do they do for you? We will not discuss every individual fee in this blog, but we will focus on the main fees and charges. First, we have the appraisal fee. This one is pretty self explanatory, as you want to make sure the home is worth what you are going to pay. Next, we have your lender fees, such as underwriting and such. These fees compensate the lender for reviewing the file, making sure the file adheres to the lending institutions guidelines and policies and normally to FNMA and FHLMC's guidelines as well. Third, we have origination fees and/or broker fees. Usually, you will have these fees if you work with a mortgage broker or a mortgage banker. A mortgage broker will shop your loan around and will almost always find you a considerably lower rate than what you would be able to qualify for on your own with the same lender. Therefore, they charge a fee for this service. Fourth, we have your title company fees. Many times the total fees here for the title company will be the largest chunk of fees charged. The title company fees guarantee that you receive a clear title, insure the title, insure the loan is properly recorded and notarized, and make sure all of the money is properly disbursed accordingly. Finally, you have your miscellaneous fees such as survey, endorsements, doc stamps, wire fees, etc... that are not always necessary but depend on the type of loan and the lender's policies.

Therefore, even though sometimes the fees can seem a bit much, mainly they are all there for your benefit and protection. Anytime you are considering a no cost or no fee mortgage, make sure that you have no intention to keep that loan more than a few years. If you decide to go with a no fee loan and keep it longer than that, you will end up paying much more over the life of the loan than had you just paid the closing costs. If you are planning to stay in the home for a number of years, then paying the closing costs and taking the lowest possible rate will probably be in your best interest and will save you the most money in the long run. Also, some of your closing costs may be tax deductible. You can also have the seller of the home you are buying pay your closing costs by negotiating that into the price. There are many options that surround you when dealing with fees and real estate, just make sure you understand your options and you make the best decision for your finances.

Sheriff Sales - Buying foreclosed properties

Dave Zwierecki (First Security Financial Services) — Fri, 27 Jul 2007 15:09:43 -0700

Have you ever dreamed about buying homes for prices that are considerably below market value? If so, read on to find out more information about buying foreclosed homes via Sheriff Sales.

We are going to focus on buying homes from Sheriff Auctions only for this blog. Basically, the way a sheriff's sale works is that a home is foreclosed on by a lender usually due to a lack of the homeowner being able to make the necessary mortgage payments. Once the home is foreclosed upon, the home goes to Sheriff's Sale (this could happen quickly or it could take awhile to get to this point). At Sheriff's Sale most lenders have a representative go in and bid on the homes to make sure that the homes do not sell for too cheap.

They have a figure in mind that they know they must sell the home for and the bank representative will bid on the home up to that amount if necessary. If the bank buys the home back, they will usually hire a realty company to sell the home for them. If you are the successful winning bidder, then you have to pay 10% down immediately via cash or certified funds. You then have 7 days to pay the remaining balance off without incurring any interest. If you can not pay it off in 7 days, you have 30 days to pay the remaining balance off, with interest. If you are not able to pay the remaining balance off within 30 days, you can request an extension which is not always granted or be held in contempt of court, subject to fines and loss of your 10% earnest money deposit.

Obtaining financing on a home sold via sheriff's auction can often times be very difficult to do. Even if you are the winning bidder, you can not access the home until you have paid the remaining winning bid off in full. Most lenders are going to want a full interior/exterior appraisal done on the home and if you can not get into the home and the appraiser can not get into the home, then a full appraisal can to be done and that will be reason for immediate loan denial with most mortgage lenders. Many times foreclosed homes are run down and in need of serious repairs. Depending on what is wrong and how much the repair work is, this may be reason for immediate loan denial if the repair work can not be done before closing. Which, it obviously can not be done before closing since it is a bank owned home being sold at sheriffs sales and not through a traditional seller. Buying foreclosed homes through a sheriff sale is much easier and more recommended to do if you have the cash to buy the home(s) outright and you do not require financing. While buying foreclosed homes can be a very lucrative business endeavor, it can also be a very risky one too. Buying homes from sheriff auction can help you to buy a home for under market value, but in most areas the bidding on these properties begins at two thirds of their appraised value. Therefore, you are most likely not going to get any ridiculously good deals at a sheriff's auction
(not to say you won't) , but you can get some very good deals if you are patient enough and you do enough research on the properties before the auction. Remember you can not get into the home before you buy it, unless you stop by the house and the former homeowners are still living there, in which case you would need to ask them for their permission to walk through the home that they just had foreclosed on. This is usually not a recommended idea as some homeowners have very bitter feelings about losing their homes.

Buying foreclosed homes is not a get rich overnight way to make money. Just like most other business ventures, it takes time patience, hard work and a lot of effort to be successful at it. There are other ways to buy foreclosed homes as well, but we will save those for another article. See the link below for more information about buying foreclosed homes: http://www.nomoneydown123.com/Ohio/buying_foreclosed_homes.htm

Credit Repair - Scam or Can They Help?

Dave Zwierecki (First Security Financial Services) — Thu, 26 Jul 2007 21:14:15 -0700

Credit repair scams, and credit repair scam companies take advantage of millions of people around the world, and they are "taking" those people for millions of dollars per year. Everything a credit repair company can do for you legally, you can do for yourself at little or no cost. However, most people do not have the time or the knowledge to improve their credit and properly and efficiently repair their own credit.

Credit repair is often used to describe a methodical process of improving an
individual's credit scores. If you decide to use a credit repair company, the
Better Business Bureau suggests that you beware of companies that do not tell
you your legal rights and what you can do, legally, for free. They also
recommend that you do not pay for credit repair services before any services are
provided, and they advise you not to participate in anything that seems illegal,
such as creating a new credit identity by obtaining a federal employer
identification number to use instead of a social security number.

If you have a complaint about a credit repair company, contact the Better Business Bureau,
your state attorney general's office, and the Federal Trade Commission. If you
decide to respond to a credit repair offer, look for these tell-tale signs of a
scam: companies that want you to pay for credit repair services before they
provide any services, companies that use an email account from a free email
service provider such as @hotmail, @yahoo, @gmail, etc..., companies that you can
not locate any information online about, and repair companies that have not been
around for very long. By law, credit repair organizations must give you a copy
of the "Consumer Credit File Rights Under State and Federal Law" before you sign
a contract. If they do not provide this to you, find another company to work
with.

Many states have laws regulating credit repair companies. State law enforcement
officials may be helpful if you've lost money to one of these scams. You have a
right to sue a repair organization that violates the Credit Repair Organization
Act. This law prohibits deceptive practices by credit repair organizations. The
Federal Trade Commission regulates credit bureaus and credit repair
organizations.

Take some time and educate yourself about your credit reports and help yourself
eliminate the problems that can keep your scores low. Many credit repair
companies are a scam, but there are several legitimate, by the book, credit
repair companies out there as well. Use due diligence when deciding whether to
use a credit repair company or not. Ask for referrals, do a little background
work on the company, and make sure that they do, or do not do, some of the items
mentioned above. There truly is no quick fix. Most of the time your credit does not just turn bad overnight and therefore it will most likely take time to rebuild it back up as well.

Bankrutpcy - The Truth

Dave Zwierecki (First Security Financial Services) — Thu, 26 Jul 2007 20:15:11 -0700

Is Bankruptcy really the "peaches and cream" that some have made it out to be, or is there much more to it than what we know? Bankruptcy is a somewhat complex procedure, and even more now so with the new Bankruptcy laws in effect, making it harder for people to abuse filing for Bankruptcy. Many people look at Bankruptcy as a "get out of jail free" card. That could not be any farther from the truth.

There are two basic types of Bankruptcy proceedings. The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13. Of the two common forms of bankruptcy, one is a reorganization bankruptcy and the other is a liquidation bankruptcy. Individuals may enter a reorganization bankruptcy in order to retain assets and pay off reduced creditor claims out of the individual's income. Reorganization is most commonly known as Chapter 13 Bankruptcy. In the US, liquidation is known as Chapter 7 Bankruptcy, which refers to the chapter of the bankruptcy law that allows your assets to be sold off (liquidated) to pay creditors.

In Chapter 7, a debtor surrenders his or her non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to the debtor's unsecured creditors. If a debtor does not qualify for relief under Chapter 7 of the Bankruptcy Code, either because of the "means test" or because Chapter 7 does not provide a permanent solution to delinquent payments for secured debts, such as mortgages or vehicle loans, the debtor may still seek relief under Chapter 13 of the Code. Falsifications on bankruptcy forms often constitutes perjury.

Recently there have been some major changes made to the bankruptcy laws. Under the old rules, most filers could choose the type of bankruptcy that seemed best for them, and most chose Chapter 7 (liquidation) over Chapter 13 (repayment).The new law makes it considerably more difficult for individuals to file for bankruptcy under Chapter 7, under which most of their debts are forgiven (or discharged), as opposed to Chapter 13, under which no debts are forgiven. The new law will also make it more difficult for serial filers to abuse the most generous bankruptcy protections.

Under the old law, filers generally filed under Chapter 7, with the final determination made by bankruptcy judges, who evaluated the specific nature of each bankruptcy. The new law adds a number of new requirements for bankruptcy filers making the filing process more difficult and costly. All potential bankruptcy filers must now undergo credit counseling via an "approved nonprofit budget and credit counseling agency" prior to filing for bankruptcy. The new bankruptcy law brings some unwelcome changes for those who are considering bankruptcy. All debtors will have to get credit counseling before they can file a bankruptcy case.

There is more to filing bankruptcy than simply thinking you will just go see an attorney and all of your debts will be wiped away. It is a myth to think, I'll just file bankruptcy and start over; it seems so easy. The truth of the matter is that Bankruptcy is a gut-wrenching, life-changing event that can cause lifelong damage to a person's mental well-being along with their personal finances for a long time. Therefore, think long and hard and make sure you have exhausted all of your other options before deciding that you want or need to file bankruptcy. Bankruptcy is rated up there with some of the most traumatic life altering events such as loss of a loved one, serious illness, divorce and disability. Truly weigh your options before committing to filing for bankruptcy protection.

Mortgage Loan Programs - Which is right for me?

Dave Zwierecki (First Security Financial Services) — Thu, 26 Jul 2007 11:12:52 -0700

There seem to literally be thousands of mortgage programs out there so how do I know which one is best for me? Finding the right mortgage program to fit your needs and your financial goals can be difficult to do unless you are working with the "right" mortgage professional and asking the "right" questions.

Which mortgage program is right for me? This is a very common question asked by many consumers. There is no "one answer fits all" type response that can be given. Each and every individual person has their own specific financial situation and their own financial goals and dreams. With the number of mortgage programs out there to choose from being in the hundreds and maybe even the thousands, this can be a difficult decision trying to figure out what is going to be best for you. There are interest only loans, ARM loans, Pay Option ARM loans, balloons, fixed rate loans, extendable balloons, conventional loans, FHA loans, and many, many others to consider. Therefore, so what do I need to think about when choosing a loan program then?<br>

Some of the main factors that you will want to consider when choosing which mortgage loan is right for you are: how long will you live in your home, do you have any children attending college currently or within the next few years, is this a starter home, will you have a pre-payment penalty, are you expecting any new family members to be added to your family, how much do you have in liquid assets, are you self-employed or do you work for someone, how much longer until you plan on retiring, do you have enough money for retirement, do you have many other financial obligations besides a mortgage, do you own any other property, and many, many others. Answering these questions, or at least thinking about them before you are ready to finance a home mortgage loan can help to greatly improve your chances of finding the right mortgage loan to meet your demands.<br>

A fixed rate mortgage is always going to provide the most stability in the long run, however since most Americans sell or refinance every 4.6 years a fixed rate does not always make the most sense. An ARM loan can provide a cheaper payment and a lower interest rate upfront for a certain number of years, but there is a lot more risk involved obtaining an ARM loan because of the uncertainty of what will happen after the fixed rate period expires on the ARM. Interest only loans are good for real estate investors and consumers who need the flexibility of being able to make only the interest portion of the monthly payments. Pay Option ARM loans can be a great way to maximize cash flow, especially for self-employed and commissioned borrowers. However, Pay Option ARM loans can incur negative amortization, which is when your balance increases instead of decreases. There are a lot of items that you need to make sure that you understand before entering into a Pay Option ARM loan. FHA loans are usually better for homebuyers, especially first time who may not have the best credit or the best overall financial situation.<br>

Thus, find a good mortgage professional and keep him or her for the rest of your days. The more you work with one person the more familiar they will be with your situation and be able to understand where you are coming from and where you want to go. This will help to insure that you find the proper mortgage loan for your situation.

Improving Credit - 5 Simple Tips to Maximize Credit Scoring

Dave Zwierecki (First Security Financial Services) — Wed, 25 Jul 2007 20:06:07 -0700

Are you suffering from a low credit score? Are you just trying to establish yourself in the world of credit. Read on for some very useful advice and tips on credit and credit score improvement.

Building and Rebuilding your credit does not have to be nearly as hard as it sounds. In order to maximize your credit scores and build or improve your current credit you need to first understand how the credit scoring system works. Here is a great link on credit building/rebuilding and how credit scoring works: http://fshomeloan.com/index_files/mortgageblogger.htm

Here are some quick tips on improving your credit score that you can do all on your own:

1. This is the most obvious of all of the tips but you need to start with making all of your payments on time. Make sure you pay your co-pays for insurance bills at the doctors office and/or hospital so that they do not eventually find themselves in the collections department and reporting as a blemish on your credit report. This is one of the most common types of collections that report to consumers credit reports.

2. Never borrow over 50% of the maximum credit limit on your credit cards. It is even better if you can keep the balances under 30% of your maximum credit limits. Maxing out your credit cards, or even worse, going over your credit limit can have almost as negative affect on your credit report as late payments.

3. Maintain a good balance of credit. For example 1 auto loan, 2 credit cards and 1 mortgage loan would be a good balance of credit. If you were to have 10 credit cards only and no other credit, this would not be a good balance/mixture of credit usage.

4. Limit the number of total inquiries you have against you. This simply means do not apply for every type of credit that you can. Do not sign up for new credit cards at every sporting event or mall kiosk that you see so that you can get the free gift. Too many inquiries can have a negative impact on your credit score.

5. Try piggybacking credit off of a friend or family member. This is a method of having a friend or family member add you one (or more) of their credit cards as an "AUTHORIZED USER," not as a co-borrower and you can instantly gain their credit history from that credit card. Not all credit card companies will report this to your credit but many of them will. You must make sure the individual has a good payment history and is not over-extended on that credit card themselves for you to receive maximum benefits from this. Also a credit card with a long history will be much better for you to be added to.

If you are new to credit the easiest credit cards to obtain are usually department store credit cards, such as JCPenny, Sears, Kohl's, etc... Also, Capital One and Household Bank are very easy to obtain credit cards through as well. <br>

Therefore, just because you have credit cards does not mean you need to use them. Use them very sparingly and preferably only once in awhile to demonstrate a responsible payment history. Follow the tips above and the tips on the link above in order to improve or build your credit.

On Your Own - First Apartment/House

Dave Zwierecki (First Security Financial Services) — Wed, 25 Jul 2007 14:43:40 -0700

Are you ready to get out of your parent's home and rent your first house/apartment ? How do you make sure you can survive on your own? Would you like some advice and tips?

Renting an apartment or renting a house can be a very exciting time in one's life, especially if this is your first time being out on your own. There are many things you need to be aware of when renting a house or renting an apartment. Be aware that there will be other items that you will need to pay for such as phone service, gas services, electric services, water and sewer, trash service, Internet and/or cable service, etc... Some of these will probably be included into your monthly rent payment, but it is highly advised that you ask questions about these items and read your rental agreement very carefully. Some of the more common items that are generally included in rental/lease agreements are water/sewer, trash services, and sometimes even electric or gas. therefore, understanding these items and planning for them in your budget can help to make sure you allow for enough money to go towards these expenses. You can also call the utility companies and give them the address for the property you are considering renting and ask them what the average bills are on that property for the past year or so. This may help you to plan your budget more accurately. Keep in mind that these bills will usually run a little higher when renting a home versus an apartment.

Understand your lease or rental agreement before you sign it. Know what is allowed and what is not. Some agreements allow for pets, some allow for pets up to a certain size, some will only allow a specified number of people living in the rental unit, some charge more for extra people. Understanding these rules and guidelines before you sign a rental agreement is crucial. You can be penalized from your landlord, or even worse, evicted from your rental unit if you do not abide by these rules. Being evicted does not free you from the terms and payment of the remainder of your lease, and if you do not pay what you owe, this could have serious negative implications on your credit report by becoming a judgment or a collection against you.

Therefore, make sure that you understand what is included with your monthly rental fee and make sure you understand the terms and conditions of your rental or lease agreement before you sign it. Don't feel silly if you want someone to look over your lease for you to make sure that there is nothing out of the ordinary contained within your lease. Most leases are somewhat different from each other and they all need to be read very carefully. If the landlord or management company tells you something about your lease, make sure it is in writing. Never assume and never go by word of mouth.

The Art of Making an Offer

Dave Zwierecki (First Security Financial Services) — Wed, 25 Jul 2007 14:38:37 -0700

A very common question that pops up when people are interested in buying a home is: "How much should I bid on a home?" Unfortunately, there is no hard set rule that states you should bid 5% under asking price. Read on to find out more about the art of making an offer on a home.

Finally, after countless hours of looking up houses online, driving around and looking at houses with for sale signs, setting up appointments with Realtors to view homes and calling the numbers on the houses that are for sale by owner you are finally ready to place your first bid and make an offer on a home. While buying a home and trying to find the "right" home can be a very tedious and long process, it can all be well worth the time and trouble when you find that perfect house that you have been searching for and you are able to get it under market value. So how much should you bid on this house? What determines your initial offering price? How can you be sure you are not offering too much or too little? Read on to find out the answers.

Making an offer on a home is one of the first really major steps to the home-buying process. There are many that suggest making an initial offer that is equal to 5% or 10% below the market value of the home. For example if a house is being sold for $200,000, then 10% of that would be $20,000 and you would make your bid at $180,000. While 10% seems to be a very good general gauge as to what to make your first offer at, there are a lot of factors and variables that should come into play when deciding what to bid.

First, you should find out how long the home has been on the market, what was the initial asking price and how much has it come down from the original price. A home that has been on the market for a long time may either have problems with it, the seller may be asking to much for the home, or a seller may be becoming desperate to sell the home. This will have a major bearing on how you make your first offer on the home.

Second, throughout your walk-thru (s) of the the home, you should jot down any potential problems, concerns, hazards, defects, worn down appliances, or other types of deficiencies that you see in the home. Make sure you walk in the home a couple of different times and at different times of the day, because you may notice different things in different lights (natural light versus man-made light).

Third, ask questions about why the current homeowners are moving. Pry a little bit to find out as much as you can. If they are moving because of a transfer at work or because they had a new home built somewhere else already, they may be more desperate to sell.

Fourth, Figure out between you and your spouse what is the most you want to spend on a home and what you both feel comfortable with as your maximum bid (actually you should probably do this before you even begin looking at a home). You should also consult with your mortgage professional to see how much you can be qualified for to make sure you all are on the same page. Remember, just because you may be pre-approved for a certain amount does not mean that you have to buy a home worth that much. This is one of the big reasons as to why there are so many foreclosures, because people bought as much as they were approved for instead of what they could afford and maintain their current lifestyle.

Fifth, you need to consider the market conditions. Is it a buyer's market, a seller's market, an extremely "hot" real estate area, etc...? If houses in a certain area or community are selling as quickly as they are listed, you may end up having to pay over market value to buy the home and bidding to low may cause you to lose the home to another buyer. If you are in a slow real estate market, where there are more homes for sale then there are buyers, then you can probably get away with starting pretty low with your bid.

Lastly, prepare a letter to go along with your offer explaining why you are making your offer. Let the seller know of what problems you can see with the home, items that need to be fixed, appliances that are worn down, etc... to back up your bid. This may help to open the seller's eyes to problems with their home. This letter is extremely useful and beneficial when a house has been on the market for a long time and/or there are a lot of deficiencies or problems with the home.

Therefore, you can see that there is a lot more to making a good offer on a home above and beyond just bidding 10% under market value. You always want to make sure you buy a home at the best value you can get it for and you do not want to overpay. If you feel that bidding 20% under market value is a good bid on a home, then go for it. If you feel that the house will sell quickly and is a rare find you may want to bid at or close to market value to increase your chances of your bid being accepted. DO NOT let your Realtor dictate your bid or make you feel like your bid is too low. There is nothing wrong with bidding too low and the worst that will happen is your bid will be rejected and no counter offer made (which is rare). Buying a home and getting a good price are easy to do, especially if you put a little time into it and have patience.

How to find a reputable Mortgage Company!

Dave Zwierecki (First Security Financial Services) — Mon, 11 Jun 2007 20:32:15 -0700

If you are like most consumers, you are not sure where to even begin when you are looking to buy a home. Should you talk with a Realtor first, should you talk with your personal bank first, should you talk with a mortgage company or mortgage broker first???? These are all very common questions and concerns that take place every day all throughout the nation.

A good place to start is by talking with friends, family and co-workers. Let them know you are in the market to buy a home and see if they have any recommendations for a reputable company/person to work with. Whether it is a Realtor, loan officer, mortgage banker, mortgage consultant or whomever they have worked with and were pleased with, see if anyone you know can recommend someone to you. This is the simplest and easiest way to find someone that you can hopefully trust and that will be able to provide you with the same great service that they provided your friend, family or co-worker with. Remember, just because you contact them does not mean that you have to work with them. If after you talk with them you realize that you don't feel comfortable with them or you don't feel you can trust them for any reason contact another company. Your mortgage is one of the single largest investments in your life and should be treated accordingly. Let this person know that they came recommended to you from Mr. or Mrs. XYZ and that you are also talking with another company or two. For some reason if you let them know you are already talking with someone else they will either try to provide you with the absolute best service they can, or their "true colors" will come out and they will treat you as though you don't matter because they don't want to put in too much time or effort because you may work with someone else. If this is how they respond, then this makes your decision that much easier as to who to work with.

After you have talked with a mortgage professional or two I would recommend that you do a little online research to look into the company and/or the individual that you are working with. Search state regulator agency websites, search licensing records, visit the Better Business Bureau's website, check out RipOffReport.com, Google search the company' name contained in "quotes," and do any other research that you can think of or that you deem necessary to find out what kind of company you are dealing with. Keep in mind the size of the company you are dealing with. If you are working with a national company with thousands of employees and they have 10 complaints, that is not a very big deal, especially considering the size of this industry. However, if you are dealing with a small local company with only 5 employees and they have 10 complaint against them in the past year, this could definitely be something that should possibly concern you. Granted the nature of the complaints, whether they were resolved or not and who they were complaints against should also weigh in on your decision.

After all of this, obtaining referrals, talking with 2-3 companies/mortgage professionals, and doing your "homework" on the companies themselves, you should have a pretty good idea as to who seems the most genuine and who you think you will feel most comfortable working with. Many times once you find one mortgage professional to work with, whether it be a loan officer or a Realtor, they can often direct you to someone else that they trust and have worked with to handle the other aspect of your homebuying process. Again, you do not have to work with this person, it is simply a recommendation or a referral of someone that you can work with.

In the state of Ohio the regulatory agency in the mortgage industry is the Department of Commerce's Division of Financial Institutions. You can access their website online, look up information about mortgage companies, perform licensing checks, and file a complaint against a company. Here are some useful links for Ohio consumers:

http://www.com.state.oh.us/dfi/ (main link)

http://www.com.state.oh.us/dfi/Consumers.aspx (helpful information)

http://www.com.state.oh.us/dfi/usefullinks.htm (other helpful links as well)

http://elicense2-lookup.com.ohio.gov/SearchCriteria.asp (license look-up: company and individual)

https://www.com.ohio.gov/dfi/fiin_apps/public_enf_lookup/default.aspx (enforcement actions)

Here are a few other helpful links for you to research companies:

http://www.bbbonline.org/www.ripoffreport.com

http://www.ripoffreport.com/

http://www.ag.state.oh.us/

To finish off, it is recommended that you talk with a mortgage professional first to get pre-approved for your home mortgage before dealing with a Realtor. This way you will be able to first obtain a pre-approval, know how much you are pre-approved for, show your Realtor that you are a serious buyer, and you will be able to best utilize your time along with the Realtor's time. Going to a Realtor first may end up being a possible mistake if you find out that you are not able to get approved for a mortgage at this time (under the terms and conditions that you need or want) or you may end up looking at homes that are way out of the price range that you qualify for. Therefore, if you are in the need of a mortgage loan or looking to buy your first home in the state of Ohio please contact me to get pre-approved or if you just simply have some questions that you would like help with.

Items needed to get pre-approved for a home loan:

* Last 2 years W2's for all borrowers

* 2 most recent pay-stubs for all borrowers

* 2 months of bank statements, asset statements, retirement account statement, or any other liquid asset statements that you have to better your chances at approval for a great rate

* proof of current rent or mortgage payments (if applicable)

* proof of bankruptcy discharge (if applicable)

* proof of alimony/child support income (if being used for qualifying and if applicable)

* proof of amount of child support/alimony paid (if applicable)

Other items may be needed as well but this should get you off to a good start. Remember communication is key to a smooth and enjoyable mortgage and home buying experience. Be upfront and honest so that any possible issues can be taken care of up front instead of surprises arising at or right before the scheduled loan closing.