Buy a House, Get a Raise!

February 8, 2012 by 8 Comments

buying a foreclosed home in ncBuy a House, Get a Raise! I’ve told people this for years, and they don’t always understand.  You see, when you purchase a house, it gives you a tax incentive, and so if you are paying $1200 a month for a mortgage payment you are likely writing off at least $400 a month in interest and taxes!

So a house / mortgage payment of $1200 does not compare with a rental payment of the same thing!  Nuying a house can be an emotional experience,  but there are benefits to homeownership too!

There are some GENUINE Deals out there when it comes to purchasing foreclosed property- HUD has a program that only requires $100 downpayment!  There are special First Time Home Buyer Programs too!

In addition to that – Did you know that rental history is not adding anything to your credit score??? Home-ownership does?

In general, your landlord does not report to the credit bureau unless you’ve screwed something up!  A mortgage company, reports an on time, monthly installment debt.  This can be a HUGE lift to your credit score!  8o))Just one more reason to call us about purchasing a home in NC!  Steve and Eleanor Thorne, Mortgage Banker  at 919-649-5058.

Filed Under: First Time Home Buyer Tagged With: , , , , , , ,

I Have A Repo on My Credit Report Can I Buy a House?

February 6, 2012 by 5 Comments

Villages of ApexI’ve had several of these questions lately, and I figured I’d let you know what I’m seeing.

Just because you have a repossession on your credit report does not mean that you have to delay in purchasing a home… but that doen’t mean it’s not a problem.

Okay, so let’s say you have a repossession from 2005.  Next year, 2013, the issue is going to “age” off of your account.  That means, no matter what the creditors are telling you, it’s going to go away – COMPLETELY away.  So, in most cases I don’t recommend that folks shell out $4000 to settle the deficiency balance this year (when it’s going to age off next year) because then it’s going to stay on your account for another 7 years! (To find out how long items stay on your credit report, click here!)

But, it might still be difficult getting a loan with that balance on there!  The critical things to consider are this:

  • How old is the repo?  If it’s less than 5 years old – you might need to make arrangements for payments.
  • What is your credit score?  Need 2 scores over 600 in most cases now!
  • Do you have other good credit?  You should have 3 good accounts!
  • Are there other collections?  If so, they likely need to be paid off before you apply for a mortgage loan.

Every credit report is like a snowflake… it’s different.  There’s no clear way that I can answer this question on a blog post – I’m just trying to let you know that it does not HAVE to keep you out of the mortgage market.

Bottom line – call us and let’s see if we can help you get on a path to purchasing a home!  Steve and Eleanor Thorne, Mortgage Banker in Cary NC, 919-649-5058

Filed Under: credit, FHA Mortgage Loans Tagged With: , , , , ,

Does The Balance On Your Account Matter?

February 4, 2012 by Leave a Comment

new home sales apexI recently read a report that said:

“Several of my clients are in the credit restoration business and a recent conference call with some of the heavy hitters in the business revealed an astonishing new update to how the FICO score is computed.

Balance management – that is the practice of getting the “balance to available credit” (similar to ltv) below 50% and ultimately to below 30% for maximum benefit, “NO LONGER appears to improve the score” was the quote on the conference call. It was a common, and very simple way to get a few point increase in FICO score was to transfer balances accross cards, or pay down across cards to get the balances below 50 and 30% of the available credit line. Another common practice if there was no room on other cards or no cash to pay balances down was to call the credit companies and request an increase in the available credit limit – which would result in an improved ratio and a better score. It appears this is NO LONGER the case.”

In review of our recent files… we do not feel this is accurate information.  Our files show that folks who pay their accounts down to at lest a 50% level do have an improvement in their scores.

Don’t be fooled by those who don’t have many clients, are not working full time in the business, and just plain don’t know…  Steve Thorne at Mortgage Banker in Cary 919 649 5058  if you want to buy a house and need more information!

Filed Under: credit Tagged With: , , , , , , ,

What’s In Your Wallet (It Makes a Difference) Part 2

February 3, 2012 by 1 Comment

Fix Your CreditWorking on your credit scores so you can purchase a home?

If you are not behind on payments, and you think you can manage the payments as they are (without closing accounts)… let’s talk about one of the most important things you can do to raise your credit score.

Take out your wallet… Look at the Credit Cards; and find the ones that have the name of a STORE on them (these are just examples):

Best Buy

Rooms To Go

Belks

Victoria Secret

Apple

Lowe’s

Sears

Pottery Barn

Radio Shack

Put those in one stack. Then take out the ones with the name of the BANK on them:

Chase

Bank of America

Wells Fargo

CitiGroup

Put those in a Stack. Then take all the rest of them out:

Discover

American Express

Capital One

Provident

American Airlines

And put those in a Stack. Now—if you REALLY have all of these credit cards, and they all have balances on them… you should have some really nice stuff! WOW! (ROFL!) But I digress…

So, when you have an extra $50, which ones do you pay down first?  Well, our suggestion is that you pay OFF the first stack as fast as possible. Not just down to 50% balance versus Credit Limit… these are the ones you really ought to cut up and close. Do NOT use STORE credit cards if you can help it! It’s not worth the discount to defer payments on Rooms To Go if you care about your Credit Score! Listen to Dave Ramsey and buy the furniture when you can afford to pay cash!

With the other two stacks— work to get rid of the Capital One, Provident, “B” Tier cards as quickly as possible and cut that card up. You might not want to cancel the account, having the limit there is okay with a zero balance—but they are difficult to deal with and charge very Large Fees.

Once you have THOSE cards paid off, start working on the “Bank” credit cards. Pay each one down to at least a 50% balance. If you do this—you will have a GREAT credit scores!  That’s the GOAL!  Right?

 If you have questions about buying a home, or want specific information about your credit – please call Steve and Eleanor Thorne, Mortgage Banker in Cary !  919-659-5058　

 

Filed Under: credit, Housing News Tagged With: , , , ,

What’s In Your Wallet (it makes a Difference)? Part 1

February 2, 2012 by Leave a Comment

new homes raleighAre you considering a Home Purchase???  Many of us realize that credit scores are the Holy Grail—the one thing you do not want to screw up… and if you have, it’s the one thing you want to figure out how to FIX… FAST!

We talk to people all the time who have been laid off, or had an accident, or got sick, or relocated and then hit hard times. The first thing you need to do is GET OVER IT! Get past the anger and the sleepless nights trying to juggle everything, and start making a plan.

All too often people could increase scores and save years of problems if they asked for help EARLIER. We recommend talking to a Consumer Credit Counseling Service (NON PROFIT) before you get behind on bills. They can get credit card rates lowered, past due and over limit fees dropped, and your total monthly payments manageable. Once you’ve made 9 payments into these Services, you will probably see a positive difference in your Credit Score!

Again—you want to make sure to talk to NON-Profit Consumer Credit Counselors. They will typically keep only a very small fee for distributing the payments.

Are you trying to improve your score so you can purchase a home?? Contact Steve and Eleanor Thorne at Mortgage Banker in Cary , Cary, NC  919-649-5058

 

Filed Under: credit, Housing News Tagged With: , , , ,

Credit Score Basics – For First Time Homebuyers

January 31, 2012 by Leave a Comment

We were able to ask Ken Venable with CREDCO about FICO Scores and what the fallacies and models used today. We are hoping to clear the air – because there’s so much information available now… and some of it is just plain misleading.

For instance the “Free Credit Score.com” jingle that folks listen to, and then PAY for doesn’t have a matrix that is anywhere close to the “Mortgage” matrix we must use to score you! We’ve seen many people who thought their credit score was “up” to 640 – when we pulled it and found that the score was actually 618, the customer thought we were crazy!  We weren’t… there’s just a difference between a Mortgage Report Score, A Medical Credit Score, and a Retail Credit Score.

Each credit bureau uses a “Score Logic” that is slightly different from one agency to another. Meaning that if 4 different people pull your credit, you might get a slightly different score – especially if the person pulling your credit doesn’t note that you are a junior… or if they have the wrong zip code!  That’s right, entering the wrong street address can change your score, slightly.

A credit report is just a snapshot in time… think about someone taking a picture of you in one day.  Well, they might get a picture of you at Starbucks, at your desk, in a meeting – you move during your day. Creditors can submit information to the Bureaus on any given day at any given time – so the snapshot (or pull of your credit) on a given day by different people might have slightly different scores.  It doesn’t happen often – but it can happen.

You need a credit score ABOVE 620 in most cases to purchase a home.  There are FEW exceptions, like if you’ve been in college and just don’t have much credit… but for the most part you need to be NEAR 620 to purchase a home in 2012.  If you are a First Time Home Buyer  – and you have questions about student loans, or your credit score – Call us!.  We want to help! Steve Thorne, Mortgage Banker in Cary , 919-649-5058.

Filed Under: First Time Home Buyer Tagged With: , , , , , , ,

Closing a Credit Card??

January 19, 2012 by Leave a Comment

credit cardsIf your trying to decide what to do with all that cash Washington is sending you in the next few weeks… you might also be looking at your credit report to see how to use that money more effectively.

In today’s environment we don’t usually suggest that folks close credit cards with no balance, but if that’s a decision you’ve made, here are some tips on how to close them the “right way:”

Contact Customer Service – The number should be on the back of your card.  Tell the representative that you are closing the account.  It’s their job to try and get you to keep it open, but if you’ve decided this is the right course, stay firm with them.  Make a note of who you speak with, the date and time (I normally write this on my bill).

Follow up in writing – be sure to include the information about who you spoke with, and request that your credit be updated to show that the account was closed at your request.  Ask for a reply in writing for your records.  We suggest that you send this letter certified return receipt requested.

Recheck your credit report 60 days later.  The changes should be reflected.

If you are considering a home purchase, and you have credit scores that are ALMOST there, but not quite… call us!  Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.

Filed Under: credit Tagged With: , , , ,

What To Dispute On Your Credit Report

January 18, 2012 by Leave a Comment

 

If You’re Huntin’ A Better Credit Score – Let Sleepin’ Dawgs Lie!

don't dispute everythingIf you are looking for a new home, you are probably aware that your Credit Score is a CRITICAL item in determining your interest rate and possibly how much house you can buy / qualify for!

We talk to people every week who receive a copy of their credit report, see some derogatory remarks from 2005 and immediately start writing dispute letters.

This might not be your best strategy (each case is different of course), because the credit score is really an indication of what you are about to do.  It tries to PREDICT what your credit behavior is going to be based upon RECENT activity.

So what happened 3 years ago, is not really as important as what happened 18 months ago!  If it is a MEDICAL COLLECTION – there’s a possibility it won’t have to be paid… most judgments and liens will have to be cleared before you can get a mortgage.

If you are considering a purchase, and want to know more about your particular credit report and circumstances, to get pre-qualified…  call Steve and Eleanor Thorne, Mortgage Banker in Cary, 919-649-5058

Filed Under: credit Tagged With: , ,

Credit BooBoos Stay Around A While

August 14, 2011 by Leave a Comment

poor creditDoes your credit look like a train wreck?  I’ve talked to several clients recently who hit a rough spot – and are working their way out.  They had some questions I thought other people might need answered too!

How long does negative information stay on a credit report?

The Fair Credit Reporting Act says that negative information can stay on your report for a minimum of seven years (I always thought that said MAXIMUM – but I was wrong).  There are some exceptions to this:

* Delinquency information like late payments remain for seven years from the DATE OF DELINQUENCY.  This is especially tricky if you have collections that are being sold from one account to the other.  Because the Collection companies are re-filing these delinquencies as if they are brand new offenses!

* Charge-offs stay for seven years PLUS 180 days from the date reported to the credit bureau.

* Student loan defaults report for seven years.

* Foreclosures stay on your report for seven years. The seven year rule also applies to Law suits, judgments and paid tax liens.

* Bankruptcy stays for 10 years from the date you file.*

* UNPAID TAXES stay on your report for 15 years!  Ouch!

If you have questions about USDA Home Loans, or about using FHA or VA Home loans to purchase a home in NC – please call Steve and Eleanor Thorne, USDA Home Loan Experts in NC 919-649-5058  

 

Filed Under: Housing News Tagged With: , , ,

What does Rapid Rescore Mean To Buyers in NC?

July 21, 2011 by Leave a Comment

RapidsLet’s say you are ready to purchase a home in NC, and you meet with a loan officer… and they say that your credit score is 610.  ARRRGGH!  Depending on the mortgage loan that you are applying for, you are probably JUST UNDER the score you need!  Now what do you do?

Your loan officer might have access to a Score Analyzer (we do!) – which will tell you which accounts need to be closed, which ones need to be paid off, and which accounts need to be paid down.  Then, the loan officer might offer to do a Rapid Rescore for you!

Rapid Rescore is just what it sounds like… let’s say our credit model shows that if you pay a credit card down to $300 your score will go up 20 points. Well, once you have evidence that you’ve made the payment – you send us the documentation, and we get the scores updated!

That’s the good news… here’s the BAD NEWS (sorta):

  • It takes almost 10 days for the full process
  • It’ costs @$30 a trade line (so if we are updating 2 items at 2 bureaus – that’s 4 x $30 or $120)
  • many underwriters won’t take a rapid rescore report.

That’s right – many underwriters (especially USDA Home Loan Underwriters) want to see the “natural” progression of the score movement!  Arrgghhhh!!! It was really easy to do this, and then about 90 days ago – it’s changed.  I mean why spend the $120 dollars if the underwriter is going to make you wait?

And wait…

and wait…

because depending on WHEN the company you owe money to reports (and they can report the activity on credit cards on any day of the month), it could take 45 days for the “change” like a payment to show up for the bureaus!

Good News!  Depending on which account you are making a payment on, you may be able to pay a minor amount like $50) and get them to update the Bureau instantly!  Call us, and we’ll let you know which credit card accounts have this capability built into their system!! 

If you are interested in a mortgage loan in NC and need some help with your credit, call Steve Thorne, 919-649-5058 he helps people everyday who want to purchase a home and just need a plan to get a better credit score!

Filed Under: Housing News Tagged With: , ,
« Older Posts