Archive for the ‘Refinance’ Category

VETERANS MORTGAGES

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English: AmeriFirst Home Mortgage logo

English: AmeriFirst Home Mortgage logo (Photo credit: Wikipedia)

Vahome1

Vahome1 (Photo credit: Wikipedia)

Why is it that you never seem to hear anything in the Mass Media about the BEST mortgage available? Especially for 1st time buyers.

FEATURES:                   

                   1. ZERO DOWN PAYMENTS.

                   2. NO PMI.

                   3. LOWERQUALIFYING REQUIREMENTS.

 

                   4. UP TO $615,000 PURCHASE PRICE.

                   5. LOWER INTEREST RATES.

 Who do you know that’s a Veteran or ex Veteran trying to buy a home??

 Pass this on to them.

MORTGAGE CREDIT CLARITY

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Factors contributing to someone's credit score...

There are many different credit score providers out there. The best known of these are Experian, TransUnion, and Equifax, due to their being the most important when applying for a mortgage.

As they all use slightly different scoring algorithms, each will provide a different FICO (Credit Score) for any given person.

 

All regular Mortgage lenders have minimum acceptable FICO score requirements for anyone wishing to get a mortgage approval.

 

The most important thing to be aware of is that the credit report you get directly from any of these bureaus is not the same as the one the Mortgage Company obtains. (Theirs has much stricter requirements).

 

You might personally be given a 660 score, but when the Lender runs your credit they get a 640 which may not qualify for their loan on the terms you were hoping for.

 

I know of at least 12 other Credit Bureaus used by different businesses with industry specific standards, but these are not relevant to Real Estate Mortgage issues.

 

If you need help improving your Credit Score be very aware that there are more scam artists than reputable professionals in the Credit Repair business.

I can personally recommend Ken Strey who can be reached at:

 

Scorewell Inc. | 925-478-4732 | kenstrey@scorewellinc.com | http://www.scorewellinc.com 1371 Oakland Blvd Suite 201 Walnut Creek, CA 94596

CREDIT SCORES and MORTGAGES

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As most of us know our Credit Score (FICO) has a major influence on whether we can get a Mortgage at all. What’s not always understood is that it also has a huge impact on the interest rate we can get. Here’s a simple way of figuring out how big that impact can be for different scoring ranges: 

*    CREDIT SCORE BELOW 620:

A credit score of 620 or lower places you in the “sub-primeborrower category. If you are considered a sub-prime borrower, you will likely pay 3 percent more on a mortgage loan than someone with excellent credit and will likely pay double-digit interest rates on a home equity loan or a line of credit.

*    CREDIT SCORE OF 620 TO 674:

This credit score range is still considered below optimal. If your credit score falls in this range, you will likely pay 2 percent more than borrowers who boast excellent credit ratings.

*    CREDIT SCORE OF 675 TO 719:

If you find yourself in this credit score range, you should find it relatively easy to procure a good loan. You will typically pay up to half a percentage point more than a borrower who has excellent credit in regards to a loan.

*    CREDIT SCORE OF 720 AND ABOVE:

If you possess a credit score at or above 720, you have an excellent credit score. This means you will be able to acquire a lender’s most favorable rates and you are in the position to shop around thus finding the best loan for you in regards to term, interest rates and other factors.”

by the way….

Factors contributing to someone's credit score...

Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)

 

If you are considering getting help with Credit Repair be aware that the vast majority of organizations claiming to do this are scammers and/or crooks.

I can personally recommend Ken Strey for a professional service. His contact info is below. 

Scorewell Inc. | 925-478-4732 | kenstrey@scorewellinc.com | http://www.scorewellinc.com

 

 

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SMART FHA CHANGE

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A great deal has been writen in the past few weeks about the MAJOR good news from FHA. It’s all useful to the professionals but let me try to take out the fluff and show just the bones.

As of August 8th, 2013, people who recently lost their homes due to temorary hardship in any of the following ways have a good chance of qualifying for a new FHA loan:

0. Foreclosure.

o. Deed in Lieu of Foreclosure.

o. Short Sale.

o. Bankruptcy (ch 7 and 13).

If you think you might qualify under the new guidelines talk to a Loan Agent who has strong FHA background. Understand that not all of them have strong FHA experience.

Logo of the Federal Housing Administration.

Logo of the Federal Housing Administration. (Photo credit: Wikipedia)

 

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APPROVED LOAN CANCELLATION RISK

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Image representing New York Times as depicted ...

Image via CrunchBase

Home buyers may face an unexpected delay or cancellation of their loan if subsequent financial activity raises any red flags for lenders, especially since Fannie Mae now requires a borrower’s credit to be rechecked right before closing a mortgage.

Making sense of the story

  • Borrowers are advised to keep their credit      picture in the clear by refraining from any purchases that may be seen as      a liability from the lender’s view. For example, the sudden addition of a      $3,000 balance to a new credit card account for an item you’re planning to      enjoy in your new home may cause the lender to send back the loan to      underwriting in order for the calculations to be redone, which could      result in a higher interest rate.
  • If in doubt, borrowers are advised to check      with their loan officer before accruing any new debt so that the purchase      of a new home is not jeopardized.
  • Fannie Mae allows the maximum debt-to-income      ratio to be 45 percent (meaning that a maximum 45 percent of your gross      monthly income can go to cover debt, mortgage and housing expenses).
  • When only one spouse of a couple is named on a      loan, credit rechecks can cause problems if the other spouse has a low      credit score. When the loan is based on one spouse’s income instead of      two, the lender will see a higher debt-to-income ratio.
  • In addition, lenders now routinely re-verify      the employment status of borrowers just before closing, which represents a      standard practice being reignited after the financial crisis. If a      borrower’s employer is undergoing a name change, then the lender also      should be notified to avoid delays.
  • The most creditworthy borrowers may not have      their loan status affected by large purchases before a mortgage is closed,      but those with tighter finances are advised to be more cautious.

 

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VANTAGESCORE

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FICO logo

Factors contributing to someone's credit score...

Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)

There’s a lot of talk about the new Credit Scoring model called VantageScore. Proponents say that it will boost your score and help people with no credit history build a strong credit score.

Here’s the bottom line: don’t waste a single memory cell on it.

Now… the back-story for those those want it:

Until the majority of lenders are using a new scoring model, the FICO score will remain the main credit scoring system out there.

As of right now, major lenders like Fannie Mae and Freddie Mac are not using VantageScore. In fact, I have never heard of a single lender who does use it.

When deciding whether to extend a loan to you, your potential creditors want to know how risky you are. Currently, the model they use to determine your creditworthiness is FICO, and almost exclusively FICO.

So if you want to qualify for a loan, or if you want to qualify for better terms on your existing loans/credit cards, you must follow the FICO model and do things which will improve your FICO score.

Ignore everything else because it will not make an ounce of difference if your lender is not looking at it. All it will do is paint an unrealistic picture of what loan terms you can expect.

I want you to focus on reality. And the reality is this: Almost every lender out there relies on FICO and only FICO when determining a credit score.

NOTE 1: When referring to FICO I mean the credit scoring model used by the 3 major Credit Bureaus, EQIFAX, TRANSUNION, and EXPERIAN.

NOTE 2: Be very careful of anyone claiming to be able to improve your Credit Score. I am aware of many scams but only 3 legitimate services that will actually get it done.

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SHORT SALES-THE END??

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Silicon Valley

Silicon Valley (Photo credit: Wikipedia)

For about 2 years now my market (Silicon Valley) has seen a steady increase in sales prices. This is finally causing changes in Banks approach to Short Sales.

I just had my 1st experience where a Bank (BofA) cancelled a previously approved short sale when they realized that the current value of the property is now higher than the amount of the loan.

They have now re-started the Foreclosure process where they can expect to get all of their money back and not have to take a loss after all.

This also gives the owner/borrower the opportunity to minimize the Credit hit by selling the property before the foreclosure completes, and maybe even get a little money back themselves.

I firmly believe that the age of the Short Sale Specialist is coming to it’s end and all those useless seminars will disappear with them.

However, there

Bank

Bank (Photo credit: 401(K) 2013)

for the home owner who is falling behind  if the Banks begin to think it might be smarter to foreclose and lose a lot less than previously, rather than expend time and effort trying to keep the afloat.

The next 6 month will be very interesting.

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STATE OF THE MARKET Jan 1st, 2013

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For Santa Clara – San Mateo – South Alameda – Santa Cruz Counties.

2012 saw a continuation of 3 major trends which began in mid 2012:
1. A RAPID INCREASE IN SALES PRICES:
o. As always, Up and Down movements start at the low end of the market and rise or fall till they include the whole price range.
o. Typically this is over a 2 to 3 year period, after which prices settle down to a 3 to 5% annual increase till the next Boom or Bust. This places us about half way through the current upward stage of the cycle.
2. MAJOR REDUCTIONS IN SHORT SALES & FORECLOSURE.
o. This is mainly due to banks finally co-operating with the Federal Government sponsored Loan Modification programs i.e. HARP, HAMP, and HAFA. These programs are also allowing many current homeowners to refinance into much lower payments even when there is little or no equity in the home.
3. LARGE INCREASE IN NUMBER OF QUALIFIED BUYERS:
o. First time Buyers who thought they were priced out of the market in 2008 now find the reduced prices and Tax benefits make owning cheaper than renting, and are jumping on the home ownership wagon.
o. Multiple Federal Government supported low/no down payment loans i.e. FHA, V/A etc.
o. Multiple great 1st Time Buyer programs from the IRS (MCC), plus Santa Clara County, (MAP), and San Mateo County (HEART) 3% down payment programs.
o. A flood of Investors, both domestic and foreign, who see California Real Estate as a great investment when compared to more traditional options.
HOW MIGHT THIS SITUATION AFFECT YOU.
1. MOVING UP? (New baby, bigger house, better school district etc).
o. Excellent time in most situations. Get top dollar for your current home in strong Sellers Market, and a good deal buying into a more expensive property where it’s still more of a Buyer’s Market.
2. MOVING DOWN? (Kids all grown and gone, retirement, want smaller but closer to Grand children etc).
o. Good possibility of top dollar for current home in strong Sellers Market, and getting a good deal buying outside our market area where prices are seeing little if any improvement i.e. anywhere other than the Bay Area.
3. STAYING HERE? (No reason to move).
o. Nice to see home equity growing again. Get refinanced as soon as possible. Call for advice if needed.

MORTGAGE FRAUD ALERT

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English: A sign advertising foreclosure rescue...

English: A sign advertising foreclosure rescue, name and number blanked out following discussion. (Photo credit: Wikipedia)

Despite frequent publicity and legal actions the Fraudsters and Scam Artists are still ripping off vulnerable and financially stressed homeowners with promises to fix their problems for a few thousand dollars up front.

They promise to obtain loan modifications, mortgage relief, and foreclosure rescue. Once the cheque is cashed they are no longer to be found.

There are many services available that legally try to help with these kinds of problems; however, they do not require payment up front which is totally illegal.

THE GOLDEN RULE IS THIS:

ANYONE ASKING FOR AN UP FRONT PAYMENT IS A CRIMINAL TRYING TO CHEAT YOU.

 

 

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FICO REASON SCORES

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Factors contributing to someone's credit score...

Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)

Have you ever wondered about the group of numbers following the FICO Score on your Credit Report?

e.g.  FICO Score: 500 38 21 18 05

They are not greatly complicated but are seldom used as they should be. Put simply they are the FICO “Reason Codes” and explain why your score is not higher than it is.

In the above example with the poor 500 score the meanings are:

(38) Serious delinquency and derogatory public record or collection filed. (90+ day late payments AND a public record, or account in Collection)

(21) Amount past due on accounts (current late payments)

(18) Multiple accounts with history of late payments

(05) Too may accounts with balances owed.

These are the 4 most important things related to this individual score and the things that need to be dealt with in order to improve the score.

Remember, they are not the reason your score is so low; they are the reasons it is not better.

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