Good Credit Advice

July 11, 2012 by 2 Comments

good credit adviceFirst off… let’s discuss what Secured Credit is.

A Secured Card requires you to make a deposit in order to obtain the credit card.  If you are doing this – you are either a parent with a young child that needs a credit card – or you are re-building.

Because there are other ways to obtain cash for a child- let’s assume you fall into the “other” category.

If you’ve gotten into financial difficulty, and you’ve damaged your credit, a secured credit card can help you build your scores back up because they report your payment history to the credit bureaus… and we all know that payment history makes up the largest portion of your score.

Remember that when you get a Secured Credit Card – you are not having your credit pulled, so it will not pull your credit scores down!

A secured credit card operates just like a regular credit card.  As I said, the major difference is that you, the cardholder, are  making a deposit as security in case you default on the credit card payments. [Read more...]

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Divorce and Refinance

June 9, 2012 by 13 Comments

With the economy being what it is… I guess more people are considering divorce.  I haven’t seen a “headline” pillow fightabout it, but we’re certainly getting calls!  If you’re in that boat, my heart goes out to you… and I have some things you should be considering.

Normally, folks refinance their home to get a better rate, or to go from an adjustable rate mortgage to a fixed rate… or to renovate their home.  If you’re considering a divorce, I guess you would fall into the “renovation” part!

As part of this “project” you have to decide if it makes more sense to sell the home and start over – or refinance and get the other person off the mortgage.  It critical that you pay attention to this… quick claim deeds do NOT relieve both parties from the NOTE (the obligation) on the home.

If you’re the one “leaving” the property – you do NOT want to leave this to chance (I’m not an attorney – this is just my humble opinion). We’ve talked to many people (one sweet lady this week), who have a spouse that Quick Claim’s them off of a property… that’s great… but it doesn’t mean you’ll qualify for a new home, because you are STILL OBLIGATED ON THE NOTE.  What if the “schmuk” you’re leaving doesn’t make the payments?  Yep, they’re going to coming looking for you and your credit report.  Okay, so I’ve said enough about this. [Read more...]

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Medical Collections and FHA Mortgage Change July 1, 2012

May 18, 2012 by Leave a Comment

cutsMedical Collection Boo-Boo’s are usually the hardest things to remove from a credit report, even though the Fair Credit Reporting Act does have pretty strong language about them.

The final rule of HIPAA (the Health Insurance Protability and Accountability Act) makes sharing personal medical record informations illegal with with the public. Remember all those forms you now sign when you check into the doctor’s office – that’s what it’s about.

The rules of HIPAA specifically includes past, present and future payments of health care.  Meaning, it  is pretty much impossible for Medical Providers to take out Collections and Judgements against people who owe them money.  If they did, I would know, when looking at your credit (for instance) that you owed the Cancer Center money, or a Psychiatrist…  I could make assumptions about you because of that debt, and it could cause you to be viewed differently for jobs.

The way most people get collections is because of co-pay. They go to the doctor, pay their co-pay – and then leave the rest to the insurance company.  When the insurance company does not pay all of the bill, the balance owed to the doctor is assigned to a collection company, and added to your credit report from the Collection Company (thus masking who the medical provider is).

These collections DO pull your credit score down – AND starting on July 1, 2012 – FHA was going to  begin requiring that you settle with your medical creditors in order to get a mortgage loan… that includes your MEDICAL collections too!  This is going to be especially tough for some folks, and is a HUGE change in direction for FHA!

For the past 30 years or more, Medical Collections were not required to be paid (in most cases) to get a FHA Mortgage Approval.  I’m not arguing that people should be allowed to skip bills to their doctors (at all). However, being in this business as long as I have – I’ve seen some pretty egregious situations where people were in an Accident, a doctor made a mistake on the delivery of a child, someone was hurt on the job – and they were in the process of disputing who was responsible for paying what.

With this latest move – there were to be no exceptions.  

This underwriting guidelines was RESCINDED on June 15, 2012 – and will not immediately go into effect on July 1, 2012 as planned.  However, we expect FHA to provide more clarification on this topic, and we will not be surprised if Medical Collections are part of a new round of underwriting “tightening” that happens later this year!  FHA Mortgagee Letter delaying that Medical Collections be paid

If you are considering a mortgage loan, please contact Steve and Eleanor Thorne, 919-649-5058 – or connect with us on Facebook!  We work with people every month who had some credit issues, cleaned them up, and then were able to buy a house!  Don’t give up! We can help you do this!!

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HR 6694 and Downpayment Assistance

September 11, 2008 by 1 Comment

1/31/2010 Update – There’s still no Downpayment Assistance Program Available in NC.

The House Bill 6694, that was suppose to re-confirm Downpayment Assistance (it’s gone as of 10/1/2008) has made little progress since the summer, and is still sitting in the House Finance Committee.  My personal opinion is that this is a “dead end option.”  But there might be some other alternatives!

Have you heard of Social Lending? It’s unsecured money of up to $25,000.  You need a credit score of 640 – but if you have other family members or friends who are willing to help you out… your payments could be NOTHING.  For more information on this interesting new idea, click here.

We do not currently have companies that will allow you to borrow your downpayment. So the initial loan from Zopa (for instance) might need to be to “payoff high interest rate credit cards” or to buy “furniture”… this way, you could pay off credit cards and save the money for your downpayment!  If you are getting a gift before applying for a mortgage, all money needs to be seasoned for 60 days before you apply for a mortgage loan.

If you have questions about buying your first home, call Steve and Eleanor Thorne, Connect With Us on Facebook 919-649-5058

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More Downpayment Needed for FHA

July 29, 2008 by 6 Comments

downpayment got higherThe New Housing Bill that Congress just passed in an effort to “save” Fannie Mae and Freddie Mac (F/F) has some other features that homebuyers need to be aware of.

SAVE UP! For more than 10 years there have been agencies that helped with downpayment.  The downpayment was “gifted” through the agency – and it’s a bit complicated – but it meant that a homebuyer seeking FHA financing could get a 100% loan.  Well, that’s been eliminated with the New Housing Bill.

ALSO – and this is the important part – the downpayment requirements for FHA financing just went to 3.5% effective October 1, 2008.  There’s some question about how FHA is going to calculate that 3.5% – and as those details are available we’ll pass them on – but for the time being, assume that you will need 3.5%.

The seller can still pay your closing costs, and you are allowed to get a gift from a family member!  Now is a GREAT time to buy!  SO SAVE UP!

If you are interested in purchasing a home in Cary, or buying a home in Raleigh, please contact Steve and Eleanor Thorne with Connect With Us on Facebook, a Mortgage Banker in Cary, NC  919-649-5058

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5 Reasons to Ask for FHA

March 10, 2008 by Leave a Comment

In today’s market, many homebuyers have heard that 100% loan programs are gone, but that’s simply not true.  It’s just one of the reasons you’re gonna’ LOVE FHA!

  1. Low Downpayment: FHA considers the total investment into the transaction.  They require a 3.5% investment into the property – and this can come from money you have on hand, a gift, or sale of an asset (for more info click here!)
  2. Easier to Qualify: FHA is insured by the Federal Government.  Because of this, more lenders are willing to give loans with lower qualifying requirements.
  3. Less than Perfect Credit: FHA is more forgiving regarding Credit Boo-Boos than other programs, including bankruptcy.
  4. Lower Interest Rate! YIPPEE! Unlike SubPrime loans which carried higher interest rates (because if you’ve had some slow credit – you’re a higher risk), FHA loans have very competitive interest rates.  Always compare FHA loans with other loan types.
  5. Avoid Foreclosure: No one goes into the purchase of a home thinking something bad will happen – but it might.  FHA has been around since 1934 and they were created and continue to demonstrate that they want to help you should you encounter hard-times.

For more information about qualifying for an FHA loan contact Steve and Eleanor Thorne! 919-649-5058

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FHA Might Be The Ticket!

March 6, 2008 by 1 Comment

There are pros and cons of FHA financing – but it just got better for those of us in the Triangle because our minimum loan limit is $295,000.

An FHA loan is a loan insured against default by the Federal Housing Administration.  So, in the event the loan should ever go into default, the FHA will pay the lender.  In these times of higher default on mortgages, this makes FHA financing very attractive – and it’s one of the few loans that Wall Street is purchasing!

Almost anyone can get an FHA loan. There are no income limits, like many other first time home buyer programs.  To qualify you need to meet certain debt to income ratios - and in general those ratios mean that you should have no more than 43% of your gross income going to monthly debt.

FHA does not include child care in this ratio – or insurance, or utility bills. They are pretty much just counting your housing payments, credit cards and car payments (and BOAT payments my husband says to remember those too!).

FHA requires borrowers to have a minimum credit score of at least 600. There are some circumstances where this score could be lower – and there are now MANY cases where the underwriter is looking for a higher score of 620, because Fannie Mae and Freddie Mac are going to STOP purchasing loans with scores lower than 620.

The qualifying “hurdle” for an FHA loan is that you have to be able to prove your income. We must have documented income for these loans, certainly self-employed people get FHA loans everyday – but we will need tax returns that verify your income.

So again – in the Triangle, if you need to borrow $295,000 or less – FHA might be the Ticket!  Please contact Steve Thorne, 919 649 5058  to get Pre-qualified!  Connect With Us on Google +

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