If you Short Sale your home, you have to wait 3 years before you can buy with FHA

There are a lot of people including Real Estate Professionals that ask me, "How long do people have to wait to buy a home if they short sale their home TODAY?"

The answer: 3 Years if the want to use a FHA home loan to buy.

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insures mortgage for three years from the date of the pre-foreclosure sale.

If you are a Realtor specializing in Short Sales, then please print the HUD/FHA Mortgagee Letter in the link below and give it to your clients. 

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. Eddie Fairchild DRE Lic # 01506003   *Certain restrictions apply-call for more details.

                      Eddie Fairchild
   "The Most Recognized Name in Mortgages"
 
Mortgage Professional
Summit Funding, Inc.
DIRECT      (916) 683-7359
Fax            (916) 691-5307

I would like to share with you all a message from Bruce Slayton of eCurb Realty/ForeclosureOptions.com. If you are a real estate agent then this message is very powerful. Bruce is well respected for his knowledge and insight in CURRENT market trends. Check out what Bruce has to say about the current Elk Grove/Sacramento market!

Happy Monday to all!

Some tips from a few trips I have taken in the last monthy for REO and Short Sales:

Hmmm Short Sales-

Almost every REO contact I have spoken to this month is saying if your not integrating Short Sales into your business, your going to miss the next wave of business.  Some of the top reasons I have heard that Short Sales are failing:

1.  Incomplete packages

2.  Unrealistic pricing - either listing too high and never getting an offer or too low and bank can't take

3.  Owners unrealistic on outcome      ie Homeowner took out 300K but doesnt want to sign a 50K promissary note

4.  Of course the lender, in most cases the 2nds

I have heard several warnings about the "we'll bring the buyer to the table and do the processing" then has a concurrent closing behind the scenes to another buyer pocketing 50K in the middle.  Many of the servicers have noted the increase of BPO requests AFTER a short sale is closed, they say this is being used to reconcile the MI payout and they see later that lenders could be coming after the only party they can for fraud and damages, THE AGENTS, be careful.

 BIG TIP:  I had two prominant REO VPs make comments a few weeks ago that if they see an REO application comes across with an AOL email address, they know that person is not truly in the business.  Pull what you can from that, didnt elaborate.  

REO: I have heard some interesting information about where it is, while we are getting it trickling in just like others it is not the Tsunami everyone says is coming.  1st and foremost government involvement is #1, there are lots of foreclosures tied up in loan mods (but also on the flip side I am hearing 60% in redefault rates), I am told see this start opening up in April when HAFA comes out (short sales) but a great deal of REO is tied up in the settlements lenders had with the states.  For instance when BOFA settled with several states over their ALT A product, you would be amazed at what they have to do as part of that settlement, essentially call off the foreclosure, if the property has not resold, cancel the deal and go find the previous owner and basically work with them to get them back into the loan.property, even in the cases of vandalism or stripping the property and only after attempting that whole process can they redo the trustees sale and start over.  Some crazy stuff going on.

From a small mastermind I had with some heavy REO brokers last week, they all feel you will see the servicers change (already happening) and lots of staff being moved to short sales.

Anyways, I hope I was able to give some of you some good information, from this point, I'll be posting this stuff to the Elk Grove REALTORS Facebook page.

Have an incredible Spring and let's get some of these houses moving!  

Bruce Slaton         eCurb Realty/ForeclosureOptions.com

Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. * Certain restrictions apply call for more details.

Real Estate Changes in 2010

As we move into a new year for real estate, I think 2010 will continue to be great for first time home-buyers.  I think a quick analysis of 2009 would be helpful in seeing how the real estate market is about to change. The 1st Time Home Buyer $8,000 Tax Credit proved to be a great success in 2009 which led to an extension into 2010. The credit combined with record low interest rates and low sales prices catapulted buyers off the fence and into homes. FHA Insured home loans dominated the market in 2009 and because of less stringent requirements than conventional loans, will continue to be the number one mortgage financing tool into 2010. To add to growing concerns about the banking institution, 84 banks have been closed in this year. 2009 also marked the last year before the next wave of adjustable rate mortgage are schedules to adjust and potentially sending another wave of existing homeowners into foreclosure in 2010. In 2009, loan modifications seemed to provide temporary relief for existing homeowners with 50% of all loans modified expected to result in an inevitable foreclosure in 2010.

The biggest changes to Real Estate will happen in the mortgage industry. As FHA Insured Loans continue to dominate the market, HUD, the entity that issues the Insurance on FHA loans, has announced some significant changes to the entire mortgage industry not just limited to FHA Home Loans. The 1^st change is that lenders will not be able to issue a Good Faith Estimate until the home buyer is in contract to buy a home.  Another change is that loan officers will no longer get to choose FHA appraisers to appraise homes. Identical to the October 1, 2009 change to Conventional appraisals, lenders must follow HVCC guidelines where an FHA appraiser will be pulled from a lottery pool for FHA transactions starting January 1^st, 2009.  My prediction: these changes will prove fatal to the once flourishing Mortgage Broker and make Mortgage Bankers/Direct Lenders like Summit Funding Inc. the dominant force in the mortgage industry.  An investor with 3 homes for sale in the Sacramento area told me he would not accept any offers where the buyer had been pre-approved by a Mortgage BROKER because it took an average of 90 days for a Mortgage Broker to close the loan if it closed at all.

In 2010 interest rates are predicted to rise significantly although there is several differing opinions on what month this will happen. Most experts agree that 2010 will definitely be the year for a rise in interest rates.  FHA is considering making changes to FHA Home Loans because FHA wants to see buyers have more "skin in the game." Some of the proposed changed include increasing the down payment requirement from 3.5% to 5%, possibly raising the minimum FICO score requirement from 620 to 640, and consideration of lowering the maximum Debt-to-Income ratios to ensure buyers can comfortably afford their mortgages.

For Realtors that want to learn more about these changes call Eddie Fairchild today at (916) 683-7359.

Homebuyers should hurry and get  pre-approved with Eddie Fairchild TODAY.

Call me right now (916) 683-7359.

This is not a commitment to lend, nor is it a guarantee of any kind.  Program subject to change at any time.  Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. * Certain restrictions apply call for more details.

CA Senate just passed a bill that has extended the $10,000 California State Tax Credit for another 4,300 buyers that want to buy a new home from a builder. Just in case you forgot how the $10,000 CA State Tax Credit works...Here is a slightly modified repost of my earlier blog that gives details on the $10,000 Tax Credit>>>

California has allocated $43,000,000  for qualified home buyers who want to purchase a new home in California. Since these funds are limited, they will be distributed on a first-come, first-served basis. Please do not wait until the last minute to apply for these funds. Once the funds run out, you will not receive this tax credit.

Here is how it works:

The qualified buyer must purchase a qualified home. A qualified home is:

• A single-family residence-detached or attached.
• Never previously occupied!
• Occupied by the buyer for a two year minimum IMMEDIATELY after they purchase the property.
• Eligible for property tax homeowner's exemption under *California Revenue & Taxation Code Section 218

The tax credit is equal to either 5% of the purchase price or $10,000, whichever is LESS. For example: On a $150,000 purchase, you would receive 5% or $7,500, since it is less than $10,000. On a $250,000 purchase you would receive $10,000, since it is less than 5% or $12,500.

If the credit reduced taxes on a tax return AND the buyer does NOT occupy the home for a minimum of two years following the purchase date, then the tax credit must be repaid.

The credit is nonrefundable and will be paid over three successive taxable years.

For home buyers that are interested in purchasing a brand new home from a builder, this is a great program. Since it includes 1st time home buyers as well as move-up buyers, there is a greater opportunity for more people to purchase homes. California builders should be excited about this program. It will definitely be welcome in areas like Natomas that have been hammered with new flood insurance requirements. These new flood requirements have made it impossible for home buyers to use the now very popular FHA home loan to buy new construction in areas like Natomas. Areas like Rocklin and Rancho Cordova that were leveled by declining home values and stiff competition from foreclosed homes and short sales should also greatly benefit from this new Tax Credit. 

You must act NOW before funds run out. Remember, the $43,000,000 will be allocated at a maximum of $10,000/qualified buyer on a first-come, first-served basis.

Call me today to schedule an appointment to get pre-approved to buy a BRAND NEW HOME!

(916) 683-7359.

Eddie Fairchild

"The Most Recognized Name in Mortgages"

(916) 683-7359 efairchild@summitfunding.net

*Please contact a licensed tax professional for details.

"TOP TEN DO'S AND DON'TS DURING THE LOAN PROCESS"

1. DON'T APPLY FOR NEW CREDIT OF ANY KIND, including those "You have been pre-approved" credit card invitations that you receive in the mail. Do not buy a new car or get a department store credit card while you are refinancing.

2. DON'T PAY OFF COLLECTIONS OR CHARGE OFFS during the loan process. Paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it through escrow, and make sure that 1) you validate that the debt is yours and 2) that the creditor agrees to give you a letter of deletion.

3. DON'T CLOSE CREDIT CARD ACCOUNTS. If you close a credit card account it will appear to the FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure it is a more recent account, as the recent accounts do not help your fico scores.  The accounts which you have established a 2-year history with will help your scores, so keep those open.

4. DON'T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS. This is the fastest way to bring your score down 50-100 points immediately. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board; meaning, make an extra payment on all of your cards at the same time. 

5. DON'T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS. It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in #4. If you want to save money on credit card interest rates, wait until after closing.

6. DON'T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This would include adding new accounts, co-signing on a loan, changing your name or address with the credit bureaus. The less activity on your credit reports during the loan process will help you.

7. DO LET YOUR MORTGAGE PROFESSIONAL/EDDIE FAIRCHILD  KNOW OF ANY DISCREPANCIES.  If you notice some debts on your credit report that you do not recognize, be sure to alert your mortgage loan officer so that they can do some investigating for you. The less debt you show on your credit report the better when refinancing. 

8. DO STAY CURRENT ON EXISTING ACCOUNTS. Like your mortgage and car payments. One 30-day late can cost you anywhere from 30-75 points.

9. DO CONTINUE TO USE YOUR CREDIT AS NORMAL. Red Flags are raised easily with the scoring system. If it appears that you are changing your pattern, it will raise a red flag, and your score could go down.

10. DO CALL YOUR MORTGAGE PROFESSIONAL/EDDIE FAIRCHILD if you receive something in the mail from a creditor or collection agency that you believe may affect your score during the loan process. Your broker may be able to supply you with the resources you need to stop any derogatory reporting to the credit bureaus.

       Eddie Fairchild

   "The Most Recognized Name in Mortgages"

Mortgage Professional

Summit Funding, Inc.

9250 Laguna Springs Drive, Suite 113

        Elk Grove, CA 95758

DIRECT      (916) 683-7359

Fax            (916) 691-5307

Toll Free 866-691-5301 x113

www.summitfunding.net

CalSTRS, CalHFA, CalPERS, FHA, & VA Approved

FHA or CalSTRS?

Today I had an appointment with a single mother of two who was excited about purchasing a home. She told me she had her 3.5% FHA down payment ready and all she needed was a pre-approval letter to buy a home for $140,000. She told me that she was a school teacher at Monterey Trail High School here in Elk Grove, CA. I then informed her that because she is a teacher in a California school district, she is automatically eligible for a CalSTRS 80/17 home loan. She wanted me to compare FHA to CalSTRS 80/17 so she could make her decision. Let's compare!

DownPayment:

FHA requires 3.5% down                     $140,000 x 3.5% = $4,900 DOWN!

CalSTRS only requires 3% down                      $140,000 x 3.0% = $4,200 DOWN!

She is already saving $700 by using CalSTRS 80/17!

Monthly Payment:

Her estimated FHA 30 year fixed monthly mortgage payment at today's interest rate of 5.375% was about $1,029 per month. This estimated payment includes estimated taxes, home-owners insurance, and PMI-Mortgage Insurance.

Her estimated CalSTRS 30 year fixed monthly mortgage payment at the CalSTRS 80/17 interest rate of 5.875% was $858.35 per month.

That's right. The CalSTRS 80/17 mortgage payment will save her about $170 per month.

Under this CalSTRS 80/17 she will have an 80% 1^st mortgage and a 17% second mortgage. The interest rate on the 2^nd mortgage is the same as the 1^st mortgage and the payments on the 2^nd mortgage are deferred for 5 years. It just doesn't get any better that that.

Credit:

Both CalSTRS and FHA require all borrowers to have a 620 FICO score!

 Terms:

Both CalSTRS and FHA offer 30 year Fixed rate mortgages! I highly recommend 1^st time home buyers only use 30 year fixed rate mortgages.

***Not all lenders can offer CalSTRS home loans. Lenders must be approved with CalSTRS to offer this special loan program. Eddie Fairchild/Summit Funding Inc. is approved to offer CalSTRS 80/17 to all California School District Employees. All you need to do is be employed one day in a California School and you are eligible!

Call Eddie today for more details

               Eddie Fairchild

"The Most Recognized Name in Mortgages"

Summit Funding Inc.

(916) 683-7359 DIRECT

efairchild@summitfunding.net

The financing options provided is/are a present estimation of possible mortgage scenarios.  This is not a commitment to lend, nor is it a guarantee of any kind.  This comparison is based solely on estimated figures and information forecasted at time of preparation.  Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. * Certain restrictions apply call for more details.

Home Path

When foreclosures occur on mortgages owned by Fannie Mae, their goal is to sell the foreclosed home as soon as possible in order to minimize impact on the community. Fannie Mae's HOME PATH home loan is designed to help make finding a property and obtaining financing very easy.

In a quick comparison of the popular FHA home loan vs. HOME PATH, there were some significant advantages to using HOME PATH. The main advantage being, HOME PATH is also available for investors that want to buy investment property as well as buyers that want to purchase a 2^nd home. Although HOME PATH & FHA are available for 1^st time home-buyers, FHA is not available for 2^ndhome, and investment property purchases. HOME PATH financing is available on Condos/Townhomes, PUDs, Single Family Residences, Duplexes, and 3-4 Unit properties.

The best way to find a home owned by FANNIE MAE is to contact a local Realtor. I work with quite a few Realtors that list homes owned by Fannie Mae. Feel free to contact me at (916) 693-7359 for a list of Realtors that sell Fannie Mae owned homes. 

HOME PATH is a 30 YR fixed mortgage that requires all borrowers to have a minimum 620 FICO score to be eligible. Call me for additional FICO requirements! HOME PATH also requires buyers with a Bankruptcy to wait 4 years from the discharge date for eligibility.

Remember: CASH IS KING in this 2009 Real Estate Market. Another advantage over FHA is that HOME PATH only requires a cash down payment of 3% for borrowers with a minimum FICO score of 660. Remember, borrowers with a 620 FICO are also eligible, but are required to put a minimum of 25% down! For additional CASH and FICO requirements on investment properties, 2^ndhomes, and multi-unit properties, please call Eddie today!

     Eddie Fairchild

   "The Most Recognized Name in Mortgages"

 (916) 683-7359

FHA, USDA, CalSTRS, CalHFA, CalPERS,  & VA Approved

The financing options provided is/are a present estimation of possible mortgage scenarios.  This is not a commitment to lend, nor is it a guarantee of any kind.  This comparison is based solely on estimated figures and information forecasted at time of preparation.. Program and estimate subject to change at any time.  Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. * Certain restrictions apply call for more details.

FANNIE MAE'S REFI PLUS: 105% REFINANCES  

Starting TODAY, FANNIE MAE will offer refinancing options for existing homeowners that may be upside down on their mortgages. Here are some details of Fannie Mae's REFI PLUS Loan Program:

Eigible Transactions:

• Rate & Term refinances only. Loan must be serviced by Fannie Mae prior to March 1, 2009. Call me if you want to find out if Fannie Mae has your mortgage (916) 683-7359.
• Rate & Term refinance of 1^st mortgage lien only. No cash back to borrower. 

Credit Requirements:

• 620 Minimum credit score
• No Mortgage lates in the last 12 months
• Bankruptcy: 2 years since discharge
• Foreclosure/Repossession: 7 years since discharge

Subordinate Financing:

• If you have a 2^nd mortgage, then they have to subordinate.
• Borrower is allowed to pay off 2^nd mortgage with own funds if necessary.

Occupancy

• Owner occupied/Primary residence allowed
• 2^nd Homes allowed
• Investment Property allowed

Property Types

• Attached Single Family Residences eligible
• Detached Single Family Residences eligible
• Condos eligible

  Mortgage Insurance

• If you didn't put 20% down when you bought your home and you have PMI-Mortgage Insurance, then you will be required to continue to carry that PMI-Mortgage Insurance.
• If you put 20% down, and do not have PMI-Mortgage Insurance, then you will not be required to carry Mortgage Insurance.

Ineligibility Criteria:

• If your home was listed for sale in the last 6 months, you are ineligible.

And the best part of all......Summit Funding Inc. will participate in this Fannie Mae program!

Call me today to find out if YOU are eligible. (916) 683-7359

                Eddie Fairchild

"The Most Recognized Name in Mortgages"

The financing option provided is/are a present estimation of possible mortgage scenarios.  This is not a commitment to lend, nor is it a guarantee of any kind.  This comparison is based solely on estimated figures and information forecasted at time of preparation.. Program and estimate subject to change at any time.  Summit Funding, Inc. is an Equal Housing Lender, California Department of Real Estate Broker License # 01220358. * Certain restrictions apply call for more details.

IMPORTANT!  Please read this email I received from HUD! I will release information for the MAKING HOME AFFORDABLE loans in my next blog.

Eddie Fairchild

Special announcement from Secretary.

Dear HUD Partner,

Foreclosure scams are destructive, deceptive, and devastating to families who are fighting to survive. We have families on the edge of foreclosure that are being offered relief too good to be true, and we at HUD will take every possible measure to educate and protect consumers and homeowners, bring these scams to light, and prevent con artists from exploiting the housing crisis. There are legitimate people, places, and agencies that American families can turn to when they are facing foreclosure, and many of you are working on these efforts.

I would like to make the attached flyer available to you for distribution to your clients.  It is a printable, easy-to-copy one pager detailing how consumers can access President Obama's housing plan for FREE.  We are distributing the flyer nationwide today to all of our housing partners-our HUD field offices and staff, housing authorities, state and local agencies, and non-profit organizations. This and other targeted outreach efforts will help us reach out directly to communities hard-hit by foreclosure about the legitimate foreclosure assistance available to them.

For the homeowners fighting hard to make their mortgage payments and stay in their homes, our housing plan-the Making Home Affordable Plan-will help up to 9 million Americans. Making Home Affordable will work in concert with the President's Recovery Act and support a recovery in the housing market. Our plan is helping families in three ways. First, we are protecting housing opportunities for all Americans by taking action Administration-wide to reduce interest rates, which are now at historic lows. Second, we will assist 4 to 5 million homeowners who can't otherwise take advantage of today's historically low mortgage interest rates. Lastly, we have committed up to $75 billion to help an additional 3 to 4 million homeowners who are at risk of foreclosure modify their unaffordable mortgages into affordable ones. These three planks of our housing plan will keep American families in their homes and prevent the falling home prices that result from nearby foreclosures. These three planks of our housing plan will keep American families in their homes and prevent the falling home prices that result from nearby foreclosures.

Homeowners NEVER have to pay to participate in the President's Making Home Affordable program. I encourage anyone trying to modify or refinance their loans to a monthly mortgage payment that is affordable to visit the Making Home Affordable website at makinghomeaffordable.gov.  Homeowners can also call the Homeowner's HOPE Hotline at 1-888-995-HOPE for free foreclosure counseling assistance. 

April is National Fair Housing Month. It's important, in that context, to recognize that the economic and housing crises, including foreclosure scams, have disproportionately impacted minority populations across the country. Unscrupulous financial institutions, brokers, and others have broken their trust as lenders, cheating and lying to families fighting to make their way through this crisis. I will renew our commitment at HUD to fair housing enforcement, particularly for lending violations that target minority communities. As part of our broader effort to combat abuse and fraud, HUD is using new tools, including the SAFE Act and RESPA, to protect American families. We at HUD will ensure that all Americans, particularly those in areas previously victimized by unscrupulous practices, are protected and will enforce our laws against those who prey upon them.

I hope that you will find the attached flyer useful in your outreach to consumers about the President's Making Home Affordable plan.

Signed - Shaun Donovan, Secretary

Brochure text: Alert - Don't Become a Victim of Mortgage Scams Affordable

The Obama Administration recently announced the Making Home Af­fordable Program, designed to assist up to nine million American families refinance or modify their loans to a monthly mortgage payment that is more affordable. Due to the over­whelming interest in the plan, hom­eowners are increasingly becoming the target of scammers trying to take advantage of families with false promises and steep fees to provide foreclosure assistance. With Presi­dent Obama's plan, a homeowner NEVER has to pay to participate in the program. If you wish to obtain counseling assistance, HUD urges you to contact a local HUD-approved housing counseling agency to en­sure they are receiving legitimate information.

D Counseling Agencies

HUD counseling agencies are designed to provide advice to consumers on:

• Buying a home

• Renting a home

• Loan defaults

• Foreclosures

• Credit Issues

• Reverse mortgages

Where to Turn

Making Home Affordable

www.makinghomeaffordable.gov

HUD Approved Counselor

www.hud.gov/offices/hsg/sfh/hcc/ hcs.cfm

HUD

www.hud.gov

HUD Housing Counseling

800-569-4287

Hope Now

888-995-4673

The U.S. Federal Trade Commis­sion works for the consumer to pre­vent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. If you feel you have been a victim of a foreclosure scam, to file a complaint or to get free information on consumer issues, contact: www. ftc.gov or 877-FTC-HELP (1-877-382- 4357); TTY: 1-866-653-4261

It seems as though it is getting tougher and tougher for buyers to qualify for home loans these days. In my opinion, the mortgage market is just more REALISTIC. I love the fact that buyers now have to PROVE that they have sufficient and stable income to ensure they will make steady and timely payments on their proposed mortgages. When determining buyer pre-qualifications, lenders look at consumers FICO scores which arguably give the lender an accurate idea of a consumers attitude toward managing and paying back debt. Most widely used FICO scores range from 300 (extremely poor) and 850 (perfect). If a person with an 800 FICO score borrows money from a bank, that borrower is more likely to pay that money back than a borrower with a 300 FICO score. Loaning money to an individual with a 300 FICO score poses a significant high level of risk that lenders are just not willing to take. In 2009, as banks move toward making less risky loans, the month of March has seen lenders increase their FICO score requirements to 620 for borrowers that want to obtain a mortgage. Currently there are few lenders that will still lend to borrowers with FICO scores below 620, but it is expected that these lenders will follow suit and require borrowers to have a minimum FICO score of 620 by spring 2009.

As 1st time home-buyers look to achieve the dream of home-ownership, some will be faced with the challenge of trying to build their credit to acceptable standards for mortgage lenders. In today's market, the magic minimum FICO number is 620 for people wishing to obtain a mortgage. Some road blocks these potential home-owners will face is a reduction of credit lines offered by credit card companies as the borrower attempts to build or establish credit and obtain sufficient FICO scores. With credit card banks taking greater steps to manage risk by closing existing credit lines and reducing credit limits without notifying existing credit card users, potential home buyers are seeing their existing scores start to spiral downward. This is yet another challenge to home buyers as they attempt to credit qualify for a home loan and make smart decisions with regards to credit usage.

The solution to credit qualifying for a mortgage despite the turmoil in the credit markets is to consult with a professional mortgage consultant, personal banker, legitimate credit counselor, or financial advisor to get advice that is specific to your financial goals. Understand that in 2009, buyers should start working on their credit if they want to qualify for a home loan but have FICO scores that are below 620. While I agree that having 1 or 2 credit cards with low $500 credit limits is the best way for a 1st time home-buyer with FICO scores <620 to establish credit history and build FICO scores, I disagree with obtaining an auto loan as a means to raise scores. Part of using credit wisely is also considering carefully the TYPES of credit to use. YES! It is possible to raise low FICO scores. Remember that a FICO scores represent a snapshot in time. A 500 FICO score today could very well change to be a 700 FICO in the future if a person is dedicated to doing the work.

Some general ways to improve your credit score are:

1. Don't pay late. If you have been late in the past, then get all your credit lines current.
2. Pay down debt. Remember the 33% Rule. If you have a credit card with a $1,000 limit, then your credit card balance should never be more than $333.
3. Don't open new lines of credit. Having 12 credit cards is a sure fire way to tank your credit. I recommend 2 or 3 credit lines max.
4. Don't close credit cards or credit accounts thinking this will raise your score. As soon as you close an account you have had for 5 years, you loose 5 years history of paying that account on time and thus drop your score.
5. Dispute mistakes on your credit reports. You can get a free copy of your credit report at www.annualcreditreport.com.
6. You can opt to take yourself off the lists for creditors that send you credit card applications in the mail. I have seen FICO scores rise as much as 30 points in 30 days for borrowers that permanently opt-out. To learn more about how to opt-out from receiving credit card offers, please visit www.optoutprescreen.com.
7. If you need to re-establish credit or are having a hard time getting your first credit card, then go to your local bank and talk to your personal banker about obtaining a Secured Credit Card. I personally like credit unions Secured Cards.

Now is definitely the time to buy! In December 2008, 1,234 Single-Family Detached homes were sold in Sacramento County. In January 2009, 1,542 Single-Family Detached homes sold in the same county. There are a lot of homes selling right now. You should be buying too.

For help credit qualifying for yourself or your buyers, you should contact me right now at (916) 683-7359 or efairchild@summitfunding.net.

Eddie Fairchild

"Most Recognized Name in Mortgages"

(916) 683-7359  or  efairchild@summitfunding.net