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Life takes sudden twisted turns. The month of May delivered one of those unexpected twists to both Sue and I and it's the main reason you are reading this edition of the newsletter a little later than normal. We were driving one morning and after waiting at a busy intersection our car was struck at full speed by someone who ran a red light. Although we were both taken by ambulance to the hospital, we apparently suffered no major injuries although our muscle aches and bruises are still prominent. As far as we know the negligent driver is also ok thanks to their airbag and seat belt. Events like that help you put things into perspective.
The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news…
Mortgage Market: Mortgage Rates Continue Slow Decline But So Do Applications
Although there is no single reason for it, mortgage rates have continued their slow and steady decline. What isn't happening is an uptick in applications for mortgages. There is still a lack of money in the marketplace for loans that do not perfectly fit into the box that has been defined by new government regulations.
As the year progresses, more and more new loan programs will hit the market from lenders that have access to alternate forms of funding other than the government. I am already seeing some of these programs hit my inbox. Things are loosening up and this will allow more people to buy homes as long as rates remain stable.
Personal Credit: Credit Cards Firms Urged To Print Credit Scores On Your Statement
If you watch television it is likely that you started hearing a new phrase during commercials. What exactly is "awesomesauce" all about? The ad for Discover Card covers benefits offered by the card and one of them is about your credit score. Discover provides you with your FICO® credit score on your print statement and online every month.
Some cardholders may worry that their credit score is hurt by Discover accessing it each month but that is a valid concern. Many creditors check your score regularly using what is called a "soft pull" which has no impact on your credit score.
The Director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, is so impressed with this card benefit that he is encouraging other credit card providers to follow suit and make credit score access easier for consumers than having to pay for their scores.
When the marketplace is allowed to compete it is amazing to see the innovations that come about as companies try to outdo one another in gaining the attention and wallet of consumers.
Ask Me Your Credit Score Questions
Have you been given credit score advice that you are not sure about or read an article that has conflicting credit score information from what you believe to be true? I am here to help. Submit your question and I will be happy to respond. For more free and easy to read credit score tips visit the DailyDollar and click on the Credit Score and Credit Monitoring sections. Remember, to get a truly free approximation of your credit score, read my article about Credit Sesame and try them out.
Economy & Financial Insights: Where Has All The Drama Gone?
Economic news is quiet. When is the last time you recall hearing news about the debt ceiling or riots in some faraway land like Greece? Unemployment remains stagnant, inflation remains a non-factor and interest rates are showing no signs of major upticks (despite the Federal Reserve slowly tapering off their efforts to keep rates low).
Globally, there are many concerns with the economic status of other countries such as China and Japan and European nations. This level of investor uncertainty abroad creates demand for the relative safe haven of U.S. backed securities.
At home, consumers are spending less with their credit cards lately as the savings rate in the U.S. ticked up to 4%. Consumer confidence is tepid at best and a lot of that is due to stagnant income growth.
The stock market has been on a boom in May which is cause for concern as there is not any solid foundation to support the rise in stock prices. Once sign of weakness is the fact that IPOs are going negative or being postponed altogether. Market conditions are pointing to a pull back so if you have profits on the table you may want to lock them in and sell off according to some analysts.
Question of the Month: What Loan Programs Are Available For Mid-600 Credit?
Little by little, subprime loan programs are being introduced to the market again. For those borrowers with credit scores in the 600s, it is nice to know that you have options. But be prepared to pay a significantly higher interest rate than what you see advertised for good credit borrowers.
The range to expect is 8-10%. Compare that to 4-5% that good credit borrowers are paying. A few years ago this option was not even available in the marketplace so we are seeing progress. In the next 6-18 months I expect to see more competition for these subprime loans which will force prices down.
When you come to the table with bad or so-so credit scores, you need to make up for it somehow. For example, having a higher amount of cash for down payment is a big plus. Also, having a low amount of credit card and car loan debt is another help.
Giving Back: Graduation Season Arrives And Another Scholarship Opportunity
Over a decade of giving has helped graduating high school art students pursue their dream of a career in the arts. As another graduation season is upon us, the Mitchelson Scholarship Foundation will once again award an aspiring artist with some much needed funds to help pay for college. Your tax deductible donations make it possible. Visit www.mitchelsonartscholarship.org to learn about previous award recipients, see some of their artwork and make your own secure donation to an organization you know and trust. Next month we will reveal the 2014 winner.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Happy Father's Day to all you Dads out there.
Randy
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Mortgage by Randy newsletter, Copyright 2008-2014 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
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You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson is an entrepreneur, author and community activist with 20 years experience in financial services. Mitchelson has served in leadership roles for Fortune 500 firms Bank of America, KeyBank and CIBC.
As a licensed mortgage professional and member of National Association of Mortgage Brokers, Mitchelson educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy.
He is an online marketing expert and Vice President at iPartnerMedia.com. He founded of Estero, Florida based National Web Leads, LLC, (NWL) in 2005 which helped advertisers drive new customer acquisition through email, web display, social media, keyword search strategies, mobile devices and more.
Mitchelson also writes the DailyDollar™ personal finance newsletter. U.S. News and World Report named DailyDollar to its list of 8 Savvy Personal Financial Podcasts.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member of the Southwest Florida Regional Technology Partnership Inc. and the Michelle’s Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
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