For Home Buyers: 5 Best Websites for Credit Score Information

by Brandon Cornett

If you’re planning to buy a home in the near future, you should know your FICO credit score. In fact, your credit score is one of the three most important factors considered by mortgage lenders (along with your debt and income levels). If your score is high, you’ll have a much better chance of getting approved for a loan. You’ll also qualify for a better interest rate, which could save you thousands of dollars over the life of the loan.

It’s important to check your FICO score early on in the home-buying process, because it takes time to improve a low score. While you’re entitled to a free credit report per year, you’ll have to pay a small fee for the credit score. They are two different things. You can purchase your score from MyFICO.com — this is the company that actually designed the FICO scoring model.

But what if you check your score and find out that it’s low? You could qualify for certain types of loans with a score in 600 range, but you’ll be much better off in the mid- to upper-700 range. The question now becomes: How do I Improve my score? And that brings us to the purpose of this article.

5 Good Sources of Credit Information

Here are five websites worth visiting, if you want to learn more about your credit reports and scores:

1. www.myfico.com — We touched on this website earlier. This site is owned by the Fair Isaac Corporation, the company that created the credit-scoring model used by most lenders. They have plenty of educational articles, as well as a forum where you can post questions. It’s well worth a visit.
2. www.homebuyinginstitute.com/credit.php — On this page, you’ll find a collection of more than 100 articles relating to consumer credit. This collection was compiled over a two-year period, as readers sent in their questions. If you have a question about credit reports and scores, you’ll find the answer on this site.
3. www.annualcreditreport.com — This website is jointly owned by the three credit-reporting companies (TransUnion, Equifax and Experian). This is where you should go to request your free reports. This is the only site that is regulated by the Federal Trade Commission.
4. www.ftc.gov/freereports — Why do so many people offer “free” credit reports, and then try to charge you for stuff? It’s a marketing strategy referred to as bundling, and you can learn the truth about it on this website.
5. www.bankrate.com — This site is a treasure trove of helpful advice. In addition to credit tips, it explains the mortgage process in great detail. Start with a keyword search, or click on the “news and advice” link.
   Research is the first step to home-buying success. The five resources listed above will help you get started on the right foot.

© 2009, Cornett Communications.

About the Author: Brandon Cornett is a consumer advocate and publisher of the Home Buying Institute. You may visit the author’s website at www.HomeBuyingInstitute.com to learn more about this topic.

Tags: buying a home, credit score, free credit report, free credit score, home buyers, mortgage qualifications

To BPO or Not To BPO

In today’s current market many real estate agents have to look to other areas to help them earn revenue to augment their home marketing income. Some agents have spouses that earn a steady income that helps pay the bills during the time that listings are waiting for acceptable offers or a market campaign brings fruition with new home buyers. For myself, the decision was based on trying to find soemthing that was complimentary to my main business focus, real estate. To that End I ended up with doing Broker Price Opinions (BPOs). BPOs are very similar to Comparative Market Analysis (CMAs) except that BPOs are more detailed and are done for a fee, while CMAs are at no-cost for a home owner and prospective home seller.

After spending a considerable amount of time doing these BPOs I have come to the conclusion that they are a two-edged sword. On one hand, if you do enough of them for the right price, they are a good source of extra income. However, on the flip side, they are very time consuming and not very cost-effective to do if one does not set some initial ground rules in doing them. But the key question is – are they worth doing? Before I can answer the question, I should go into a bit more detail in what is the process of getting and completing BPOs.

BPOs can be a steady source of additional revenue if you can be assured of getting them each and every month. This may not always be the case due to many factors. One of the biggest factors is the lending institutions. I tend to work with third party servicing companies that go out and solicit business from these lenders. If they are successful, then the service company has quite a lot of orders to fullfill, which they need real estate agents (known as Field Agents) to complete for them. Basically, lenders hire these service companies to give them financial marketing information on a specific property. I can’t go into what details/services the service provides them, but one of the components is the details market analysis of the property, known as a BPO. The Field Agent (FA) is assigned an order to complete a report on. The report is very similar to doing a CMA for a home owner except there is more detail in writing. The FA must go out and take pictures of the property, view the property and the neighborhood. It is of tremendous help if the FA also knows the market area extemely well. This may sound like a no brainer, but there are real estate agents that will only focus on the money (fee paid for order), take the order, and then try to put together whatever they can to get the report accepted. So, now you have a basic understanding of the the BPO process with third party service.

So, to answer the question of are BPOs worth doing, my answer is Yes and No.

For Yes, it is as long as you can be assured of getting a relatively large number per month. Because of this uncertainty, I have relationships with many different service companies that assign BPO orders. This way I can track my revenue from BPOs each month and see how well I am doing. If one servicer is low in assigned orders for me, I can then accept orders from other service companies. Now, one of the rules that I have established for myself in completing BPOs is that I do not accept any drive-by order (referred to as Exterior Orders) for anything less the $50. Anything less is not cost effective for me to take; I have to contend with wear and tear on my car and my time in conducting the research. In that the BPO will not end with me getting a home to list, the fee is the only benefit I can expect to get from them.

The other advantage for me in doing BPOs is more of a non-monetary issue. And that is that BPOs allow me to learn, on almost an on-going basis, what the market is doing in any specific area. If I get a BPO order to complete on a luxury home in a specific development, my research gives me knowledge about what is going on within that specific market segment. This gives me an advantage over other agents in the area who rely only on doing CMAs for home owners. For one thing, the agents need a willing home owner who is interested in the agent’s CMA. Without that home owner, why would the agent do a CMA? I, on thr other hand, always have a willing recipient of my detailed market analysis with the mortgage lenders and banks.

As for the flip side of doing BPOs, the No side, is that they are very time consuming. Even though you are getting a fee for completing a BPO you still need to take the time to drive to the property to take photos and to do the detailed research that the lenders/banks require (i.e. number of vacant homes in the neighborhood, how many homes in the neighborhood are bank owned/foreclosed, the potential rental amount, etc.). This all takes time. And if you are doing a large number of BPOs each month, the time needed can add up very quickly.

So, the question remains. Should agents do BPOs or not? There is that trade-off. While an agent is spending time doing those BPOs they are not farming/soliciting new customers. Their client base can possibly dwindle. If they don’t have time to get on the phone to prospect for new homes sellers, their inventory will shrink.

On the other hand, doing BPOs is an ideal way to keep ones fingers on the pulse of the market. To be ahead of the curve as to what is going on with prices. Because as an agent does more and more BPOs they will tend to get orders from lenders/banks for homes in a cluster of areas over a period of time. I, myself, have done numerous BPOs within the same development many times over the course of a month. Don’t you think that I pretty much have the idea of what is going with prices there? I also see what other agents are doing with their marketing of the homes and the mistakes they make. I’m getting pretty good at predicting if an active listing is going to be a candidate for expiration. I also see the trend of what is happening with the short sale market and where it is heading. Not only do I have to complete the research for the market pertaining to the home I am contracted to do an valuation on, but I am expected to give a detailed analysis of that market area and the homes within there.

So, in a nutshell, it does take quite a bit of time to complete a proper BPO but it is well worth it because my experience and insight helps me serve my customers that much better. When I give an opinion of the expected selling price of their home it is because I have done numerous valuations of homes in their area and I have been watching the trends of prices over a longer period of time. Not like many of the other agents who ran a CMA in the last couple of days because they had a listing appointment. I have watched the market for months while the other agents have had to cram the data and make some verbage up so that the prospective seller will be impressed that they use all the right buzz words and have some fancy charts (that the agents really don’t know what they mean).

The whole BPO activity has only added to my level of knowledge along with my years experience in marketing to better serve my clients/customers.

Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.sellmysnjhome.com
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw

Tags: bpo, broker price opinions, cma, comparative market analysis, home prices, home sellers, market prices, market trends, marketing research, prices

Energy Improvement Tax Credits

If you are impacted by the cold wave or saw your air conditioning bill skyrocket last year, now is a good time to think Efficiency.

Recently there has been a lot in the news about the tax credit for first-time homebuyers, but don’t think there is nothing for existing homeowners. Many sources have told consumers not to stop thinking “energy conservation” now that the price of oil is moderating. It’s a great time to make energy efficient  improvements in their homes.

TAX Credits For New Heating and Cooling Systems From: Houselogic.com

Many in the remodeling industry thought the meager 10% credit was not enough reason to undertake major renovations and they were right. There was no discernible increase in improvement activity tied to the tax credit.

CREDIT vs DEDUCTION As you may know, a tax credit lowers your total tax due dollar for dollar. If you owe the IRS $500  and have a $200 credit, that $500 gets lowered to $300. A tax deduction, however means you can reduce the amount of taxable income that you owe taxes on. The real benefit is seen after your apply your tax bracket. Most times when you figure it out, a Credit is better than a Deduction.

ENTER 2010: In order to both increase economic activity (remodeling) and expand energy efficiency, the new stimulus package raises the tax credit to 30% of the cost. It also tripled the lifetime maximum to $1,500. It is retroactive from Jan 1, of last year and expires at the end of 2010.
 
For specific information on new Windows and Doors click HERE

Complete Resources here on Energy.gov

The new provisions also apply to newly added systems such as solar-energy panels, water heaters and geothermal heat pumps.

A lot of what is included in the above actions are considered “Energy Star” approved. You can get a better picture of what is and is not covered at

http://www.energystar.gov/index.cfm?c=products.pr_tax_credits

Tags: energy savings, energystar, tax credits

Are FHA mortgages a good deal these days?

I have prospective buyers asking me if FHA mortgages are a good deal these days, or are they strictly for lower-income home buyers?

In the past, most Federal Housing Administration (FHA) loans were made to lower-income borrowers. In fact, that is why FHA was established. In the 1930s, a working person would have to save 50 percent of the value of a house before being able to get a mortgage. The FHA changed that with programs that guaranteed loans made to people with lower down payments.

FHA itself does not actually lend money or set interest rates. Instead, it guarantees loans, insuring that private lenders are protected against defaults on loans. Today the FHA has a variety of loan guarantee programs for first-time borrowers, reverse mortgages, and refinances. The percentage of FHA loans in the mortgage market is about 25 percent.

In fact, while FHA loans still require smaller down payments and often have low interest rates, not all FHA borrowers are low income. In areas where real estate is expensive, borrowers can take FHA mortgages for as much as $729,750 but the limits vary from place-to-place. I can discuss FHA limits and requirements with you if you think such a loan would be good for you.

There are a lot of reasons people look to FHA loans. Today, if you want to make a down payment of less than 10 percent, you almost certainly will have to do an FHA loan. Borrowers can get a home mortgage for as little as 3.5 percent down.

As a government-insured loan, an FHA mortgage has easier credit qualifying guidelines than most lenders. Today, nearly all lenders require a credit score of 700 or more to qualify for a conventional mortgage. FHA credit score requirements are slightly lower.

Nonetheless, there is no guarantee that an FHA mortgage is a better deal than a conventional one. As always, shop around and deal with a reputable lender.

Tags: mortgage loans, mortgages, mortgages types

“Live Where You Work” Program

Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.

Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.

Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit http://www.state.nj.us/dca/hmfa/consu/buyers/close/live.html

Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.sellmysnjhome.com
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw

Tags: first time home buyers, first timehome buyer program, live where you work, mortgages, new jersey program, real estate in atlantic county, real estate in camden county, real estate in gloucester county

The Forgotten Loan

I just received a reminder from one of the many mortgage reps that I get updates from. The reminder was about a loan program that is often forgotten. I’m even guilty of forgetting about it even though I had written an article about it previously. This forgotten loan program is the USDA Rural Home Loan. The best part of this loan program is that the buyer does not need a downpayment. That’s right, $0 downpayment. However, the home that you are planning to buy must be located in one of the eligible areas of New Jersey. The loan limits that USDA operates under are the same ones that Fannie Mae, Freddie Mac, and other have established.

So, if you’re ready to purchase your new home, give me a call to discuss your real estate needs in greater detail and that way I can help you determine if a USDA Rural Home Loan is for you. You do not have to be employed or affiliated with the USDA or even a governement employee. This is a great way for first time home buyers, that may not have enough funds to put as a downpayment, or even the non-first time home buyer who needs to move into a bigger home but lacks sufficient funds for the 3.5% downpayment needed for an FHA loan. First time home buyers, this is great opprotunity to get into your own home AND qualify to receive your $8000 First Time Home Buyer Tax Credit.

Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw

Tags: first time buyers, first time home buyer tax credit, mortgage loans, mortgages, no downpayment loans, usda rural loans

The Key Points that You Should Know About Mortgages

A mortgage is a kind of an agreement made to pay the money, which was loaned, to a person by keeping the house as collateral. Mortgage is a promise made to pay the debts by putting it in writing basically. Mortgages have terms and interest rates which are either adjustable or fixed.

Mortgage terms:

Mortgages are designed in such a way that they can be paid in installments for a certain period. The time frame which allows the person to pay back his mortgage is called the term. The term may be 10 or 15 or even 30 years. The length of the term determines the amount of money to be paid, which is actually spread in installments.

Mortgage interest rate:

The interest rate depends on the percentage to be paid on the mortgage loan amount. The interest rates vary according to the credit score of the person. If the credit score of the person is very high, the interest rate and the amount of monthly installments are lower. If the credit score is lower then the interest rates and the monthly installment amount are higher. Hence a good credit score will help getting lower interest rates to the debtor.

Types of mortgages:

Mortgages – Adjustable rate of interest

Under this type of mortgages, the interest rate changes from period to period according to the fluctuations of the market. The degree of change of mortgage interest rate is directly associated with the index to which it is tied. Since index will differ as they may be tied to a foreign bank rate of interest in certain cases, it is good to ask to which index the adjustable rate of interest is tied to. Usually they are fixed for a period of 1-5 years and then become adjustable.

Mortgages – fixed rate:

The interest rate of the loan amount is fixed in the case of fixed rate mortgage till the end of the term regardless of the market fluctuations. The debtor will never have to pay more than the fixed interest rate at any cost. The only means by which a fixed rate mortgage can change is through Refinancing.

Refinancing:

It is a process of changing the existing mortgage terms of agreement. The debtor can go for refinancing when the interest rates are lower so that he can save money qualifying for the lower rate of interest. The length of the term can also be adjusted to be either long or short using refinance option. Care needs to be taken when going for refinancing of mortgages as it entails for new closing costs. Fees and closing costs are involved in this method.

Appraisal:

The crucial part of mortgage is the appraisal. Before going for a loan from a bank, the value of the house must be assessed properly. An appraiser can determine how much the house is worth actually by inspecting the features of the house and by comparing it with the neighborhood houses. If any addition or embellishment is made to the house, it can raise the value of the house, but may require to appraise the new value of the document.

Tags: home buying, home financing, mortgages, mortgages types

What are the Stages of the Foreclosure Process?

The first stage in the foreclosure process is Preforeclosure
This is when the bank files the foreclosure lawsuit. In some states, its called the Notice of Default and in other states, it’s called a Lis Pendis. The bank can file the foreclosure lawsuit when the borrower becomes 3 payments behind.

During this period, the borrower has options to solve their situation:
- They can pay off the lender in full.
- They can bring the loan current for all of the past due payments and attorneys fees due.
- They can do a workout with the lender to negotiate a repayment plan, loan modification of forbearance.
- They can sell the house and move
- They can sell the house to an investor and lease it back
- They can refinance the home with an equity lender.
- If they owe more than the home will sell for, they can do a short sale with the lender. This stage only occurs in a judicial state, It does not occur in a non-judicial state.

The 2nd Stage in the foreclosure process is the Auction or Trustee Sale
- This is where the bank brings the property to public auction.
- The sale date is set by a hearing 3-4 weeks before the actual auction occurs.
- The homeowner has the right to attend the hearing and request an extension to get the home sold. Most of the homeowners we work with that attend this hearing can buy themselves an additional 3 days for a total of 60 days.
- 95% of the homes that go to auction go back to the bank as an REO.

The 3rd stage in the foreclosure process is the REO stage
- REO stands for Real Estate Owned. This usually costs the bank anywhere from 35,000 -50,000 to take a home back in foreclosure. This is the 3rd and last stage of the foreclosure process in a judicial state. The property becomes an REO if the property does not sell to a third party bidder at the auction.

Foreclosure Timeline
The time line for a foreclosure dictates the options you have. The longer you wait to deal with the problem the less options you have.

30-90 Days late
Many more options – including saving your home – than folks know about, and many are not very painful.

90 Days +
The absolute best options and opportunities to save your home lessen and are much more restrictive. This also diminishes some of the sales opportunities.

Attorneys letters – Lis pendens
Several easy solutions are no longer available.

Sheriff notice
We can still salvage your credit and possibly your equity, but every day you allow to go by reduces your options.

Sheriff sale and foreclosure!!
A foreclosure will be on your credit report for at least 7 YEARS. But, worse than that, PUBLIC RECORDS will show this legal action for the statutory period of a judgment in New Jersey! The bank will file a deficiency judgment that must be satisfied before you can buy another house. This does NOT happen with the other options we can employ for you. With foreclosure, your credit is devastated. The reduction in your credit score is more then 2 or 3 times what it is for some other options. That means higher interest rates AND higher purchase prices for almost anything you want to buy.

Short Sale Instead of Sheriff Sale
We can assist you with bringing your credit back to a level for you to again own your own home much sooner than you think. The government is responding to the housing crisis by offering legitimate mortgage options so people don’t have to resort to subprime mortgages and predatory lenders anymore.

Are you behind on your payments? See what your option are at http://www.i-teamhomes.com/foreclosure.htm or call us at 609-417-1084. Don’t lose your home unnecessarily.

Tags: distressed home owners, distressed owners, distressed property, foreclosure, short sale, short sales

Senate Defeats Mortgage Cramdown Bill

The proposed law allowing bankruptcy judges to modify mortgages, known as the cramdown bill, was voted down Thursday by the U.S. Senate.

The financial industry opposed the bill, arguing that the change would drive up interest rates and make the market less stable. Some senators also were concerned that their constituents who pay their bills on time would resent this measure.

Minority Leader Mitch McConnell, who led the opposition, says the vote “ensures that homeowners who pay their bills and follow the rules won’t see an interest-rate hike at the whim of a bankruptcy judge.”

The reform was a key part of President Obama’s foreclosure prevention plan, leaving some to question ultimate likelihood of its success.

“It won’t render the loan modification program useless, but it removed an important ingredient that would have helped realign everybody’s interests,” says Barry Zigas, director of housing policy for the Consumer Federation of America.

Source: CNNMoney.com, Tami Lubby (04/30/2009)

Tags: cramdown bill, Finances, home financing, mortgage modifications, mortgages

Answers About The $8,000 First-Time Home Buyer Tax Credit

Q: Who is eligible to use the tax credit?

A: The $8,000 tax credit is available for first-time home buyers only. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. All U.S. citizens who file taxes are eligible to participate in the program.

Q: Are there any payback provisions?

A: The tax credit is a true credit. It does not have to be repaid. The only repayment requirement is if the home owner sold the home within three years after the purchase.

Q: Are there income limits to qualify for the credit?

A: Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000.

Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit. Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.

The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.

Q: What are the effective dates for the tax credit?

A: First-time home buyers would receive an $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.

Q: Is the tax credit refundable?

A: Yes. A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference. For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.

If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).

Q: What years can buyers apply the tax credit to their tax returns?

A: Buyers can take the tax credit on their 2008 or 2009 income tax return.

Q: What types of homes qualify for the tax credit?

A: All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.

Q: Where can I find more details on the tax credit?

A: NAHB has a consumer Web site that provides comprehensive information on the tax credit. The Web site is www.federalhousingtaxcredit.com

If you have any other questions or need further details, call us at either 609-417-1084 or 609-417-1086.

Linda & Terry Iwaniw
ReSales & Investment Realty, LLC
856-795-3111 x263
http://www.snewjerseyhomes.com
info@i-teamhomes.com

Tags: Buyer Information, Finances, first time home buyers, home buying, tax credit