2010 Rebuilding your Credit Score

If the latest numbers on credit card delinquency are any indicator, U.S. consumers are starting to get a handle on their credit card debt. In the 3rd quarter of this year, according to data from TransUnion, a credit reporting agency, the delinquency rate dropped to 1.1 percent.

The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O’Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home. The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.

Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans, seem to favor those with good credit.

The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850.

“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious:

Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaac, a hefty price to pay for accumulating debt.

30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.

Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.

Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.

Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.

FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.

Here are the three credit reporting agencies that use the FICO score:

Equifax (www.equifax.com)
TransUnion (www.TransUnion.com)
Experian (www.Experian.com)

Written by M. Anthony Carr

Wondering what your Credit Score means? Read why you should know your number.

How to Save to Buy a Home

It can be one of the hardest things to do — save money for your first home. But now, more than ever, there’s incentive to buy. Government housing tax credits have been extended and that’s sparking buyers’ interest.

Reports show that U.S. homes sales increased 10 percent in October to the highest level since February 2007. The tax credit, less expensive homes, and lower mortgage rates are being credited. However, while the government is helping to support the purchasing of a home, many Americans still can’t afford to buy one.

“Most Americans are spoiled. Most Americans spend a lot of money on discretionary items,” says Eric Tyson, co-author of Home Buying for Dummies, 4th Edition. “What it really comes down to is you have to be motivated to look at where are you currently spending money and what discretionary spending can you cut off,” says Tyson.

So how do you get in a position to buy a home? For some the process can seem nearly impossible. First-time homebuyers are often fearful they’ll never be able to accumulate a down payment now that stricter guidelines are being enforced for taking out home loans.

Tyson says to look over your finances and see where things can be cut back a little. For instance, maybe you have a gym membership that you really use only a few times a month; does that justify having it? Another big area to find savings, especially for single people, is the dining out category. “Some people spend an enormous amount of money eating out,” says Tyson.

Tyson says if you really want to save, take a look at the car you’re driving. “I argued 15 years ago that you should only pay cash for a car and that you should not take out an auto loan or a lease. My first publisher argued that’s not realistic. … Well, if you’re trying to save for your retirement or trying to save for a house and you go out and buy a $30,000 car by taking out an auto loan, that’s insane—you can’t afford it,” says Tyson. Still, he says most Americans continue to take out auto loans, “and they do it because they can’t afford the car and that’s just crazy. What you’re doing is borrowing against future income to be able to drive a car that’s more expensive than what you can really afford.”

“A severe recession as we’ve been through recently is a wake-up call and it forces people to realize that they can’t continue to spend this way,” says Tyson.

Tyson says he sees people who spend an enormous amount of money on things like sporting events and while he understands their passion, if they’re trying to save for a home, something must go. “I’m not saying to cut it all out but how about cutting half of it out. It comes down to trade-offs.” Another trade-off might be to watch some of the events on TV rather than go to them. This brings us to the point of seeking savings in your utility bills by bundling cable, Internet, phone or maybe even cutting down to the bare essentials of channels. “Shop anew for services and see if you can combine them under one company and get discounts for doing so,” says Tyson.

Have you checked your cell phone bill lately? A lot of times those charges add up very quickly. “People are wasting an enormous amount of money [in this area] because of the Web surfing, the downloads, and the text messaging,” says Tyson.

The bottom line is saving for a home is a very personal experience—what one person is willing to give up another person may not. If you keep your goal set on purchasing that home then you’ll find the effort to get there is not nearly as difficult and you’re likely to find that there are more places to cut costs than you realize.

Written by Phoebe Chongchua

If you are wondering what your home is worth read why you shouldn’t get a CAM.

November Real Estate Outlook

What are home sales doing now? The impact of the Tax credit is supporting home sales for another quarter. Home sales jumped up by 11% over last quarter.  Some of this is also driven by sustained low mortgage rates. What does this mean for 2010? Have we seen the bottom? I don’t think we have. In my local market consumer expectations of lower prices next year are driving demand for homes down at this time. If you have a home that you have been trying to sell and it’s price right (holding everything else constant) but hasn’t sold after 6 months this may be why. Until consumer expectations about lower prices changes (which probably won’t happen until another 12-18 months) I’d rent it out.  If you must sell then visit me at www.russell-realtor.com. We specialize in handling distress properties.

 

 

By: Yvonne Russell,  REALTOR®

 

The opinions expressed here are my personal expert opinions as a realtor and are to be used  for general information purposes only.

First Time Homebuyers

Are they holding out till next years?

The U.S. Housing and Urban Development Secretary Shaun Donovan on May 29 announced the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of an FHA-insured home. He said this action will help stabilize the nation’s housing market by stimulating home sales across the country. The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit up to $8,000 for purchasing their first home. Families can access this credit after filing their tax returns with the IRS. The new announcement detailed FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. You may visit the HUD web site to learn about this rule. Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Now the lenders can use the tax credit as additional down payment, or closing costs, which can buy down the interest rate. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the down payment. This action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. The Administration’s homebuyer tax credit is estimated to stimulate home sales across the nation  and most  will be first-time buyers to receive the credit. Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary. This news source came from the (Silicon Valley Association Realtors)

Avoid Foreclosure Now

 

9 Ways to Avoid Foreclosure
Reinstatement: This means that you will bring the loan current. Forbearance: This mean you are requesting a temporary repayment plan Refinance: This is a new loan with reduction in monthly payments Loan Modification: You are requesting a modification of the original loan terms. Sell The Property: You are using your equity in the home to payoff or pay difference Rent the Property However, you must make the loan current Short Sale: You contact a licensed realtor to negotiate with the lender to accept sale under loan amount. Deed in Lieu of Foreclosure: This is known as a friendly foreclosure Bankruptcy This will stall foreclosure process but NOT PREVENT IT. DON’T LET TIME RUN OUT! CONTACT ME TODAY AT yrussell@remax.net or visit http://www.russell-realtor/distressedproperty

Military Relocation to Fort Bliss

How do I find a good buyer’s agent?

Here are the nuts and bolts, no holds-bared answer from an experienced ft agent.

1. Make certain you consider only full-time agent.

2. To get a good sense of the agent (even if your very best friend recommended him/her) read their web site. Is it informative, knowledgeable about the area etc. This is not the same as a boiler plate profile or website template. Your trying to get a feel for the agent and if he/she didn’t bother to inform you about the area, he/she is probably just using the site to drive leads.

3. Make sure the agent is familiar with price trends in your target area not just “what the cma pulls up”. There are many economic variables your agent should be aware of. Because of my economics background I always research the market trend of the target area. Now if you are buying investment property you are more concerned with roi.

 This was a mouth full. Just want you to be aware that an experienced and well rounded REALTOR will give you both the big and small RE picture. It is definitely a great time to buy and the trend will continue, by this REALTOR’s estimation, for the next 6 months.

 

Authored by: Yvonne Russell

Curent El Paso Real Estate Market report

 

 

Here are some important numbers and data from MLS for Aug 2009 which shows that the inventory of homes on the market in El Paso contracted. Home sales are down from July. Average sales prices went down slightly this month. This information is for residential, single family residential properties including town houses and condos listed in the city of El Paso during the month of Aug. 2009. What is apparent, as i complied this data, is that the Actual sales price for August was down than it has been in the five previous months. Also, 447 homes were sold in El Paso in August and there are 3614 homes currently on the market. It seems that the real estate market in El Paso continues to be a buyers market. So my advise to buyers is that they make an offer once they find a home they like. As a buyer can see the list price is not far off from the selling price so the market is currently priced correctly.
For Sellers the news is the same. If you price right and your home is ready to show, it will sell.

El Paso Market Trend Analysis

El Paso Real Estate Market Trend Analysis

You are probably paying too much in property taxes since the market fall of last year. You need a Current Market Inventory Analysis. RE/MAX Associate and El Paso REALTOR, Yvonne Russell can help. Contact Yvonne Russell today!

Time is Running out on $8000 Tax Credit

10% of purchase price up to $80K for max of $8K tax credit. Income cut-off Modified Adjusted Gross Income for single is $75K and  couples of annual MAGI less than $150K. Credit doesn’t have to be repaid unless house is resold in 36 mons. even if loan is financed with mortgage revenue bonds. Any resident alien or citizen who has not owne a home in last 3 yrs qualifies.

1)Texas Dept of Housing & Community Affairs has two short term loan programs to be repaid with federal tax credit.
 2)Mortgage Assistance Program 5% of 1st lien amount up to $6K, interest free for 120 days.
3) Down Payment Assistants Program has a loan of 5% up to $7K 90 days interest free.
see Yvonne Russell, Remax Associates

MyFirstTexasHome.com

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