Archive for the ‘Credit Scores’ Category

The Times They Are a-Changin’

March 17, 2009

The Spring season brings many changes… daylight savings… temperatures rise… flowers bloom… allergic reactions… and thankfully, rain!

As we enter this new season, The Times are a-Changin’ for me in regards to the mortgage industry and my employment.  My time with Hillside Lending came to an end in mid March.  I thoroughly enjoyed working for Hillside, and was sad to leave. 

That said, the current market and changes in the industry forced this decision.  I need to work with a company that can provide loan programs with minimal down payments and lower credit score requirements.  In other words, government secured loans (FHA and VA).

 

So, say hello to Dunwoody Mortgage Services.  Working with Dunwoody Mortgage, I am able to use loan programs that meet my clients lending needs in this difficult environment.  Some of these programs include:

 

         FHA and VA loans with as little as a 3.5% down payment

         $100 down HUD homes:  Any foreclosed home with an FHA loan can be eligible for purchase with only $100 down.

         Stated Income/Verified Asset loans targeted to self employed borrowers

         100% financing for rural development homes

         Of course conventional loans are always available with a 5% down payment

 

As one door closes, I am excited about the new opportunity to work with Dunwoody Mortgage.  If you have any questions about the loan programs, the move, or anything else, don’t hesitate to contact me.

 

Clay Jeffreys
Dunwoody Mortgage Services, Inc.
770-614-1157, ext 153 (o)
clay@dunwoodymortgage.net

 

 

Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.

 

 

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A year in review

December 31, 2008

What a year it has been! I am sure many people are glad to see 2008 coming to an end. With such a hectic and unprecedented year, I thought it would be a good idea to take a look at what we’ve been through and where we could be headed.

– Tightening guidelines for lenders: 2008 saw the end of many loan programs that quite honestly never should have existed. Lenders didn’t stop there. 100% financing is gone and so too was 97% financing for a better part of the year. There are now rate adjustment for credit scores in the low 700s when “back in the day” any score over 700 (sometimes 680) was considered as good as it gets.

– Inflation appears and disappears: 2008 also witnessed some of the highest inflation figures in the last 10-20 years. Inflation was pressured by several factors including increases in food costs, high gas prices, and cuts to the Federal Funding rate. Inflation put pressure on interest rates and caused them to rise into the mid to high 6% range. Rates looked to continue to climb until…

– Oil prices go crazy: The biggest influence on inflation this year was high oil prices (over $150 a barrel) which created high gas prices (over $4 a gallon). Once the balloon burst on $150 oil, the price per barrel plummeted to its present levels of less than $40. The drop in oil caused the price of gas to go from $4.00+ to $1.61 a gallon (according to AAA) at the time of this post. With the price of gas lower than it has been in several years, inflation numbers decreased easing the pressure put on interest rates allowing them to fall back from their yearly highs.

– Bailouts, bailouts, and more bailouts: 2008, the year of the bailouts. It seemed that almost every company that came asking for a bailout got it in 2008. The taxpayers got a bailout in May, Fannie Mae, Freddie Mac, AIG, an endless number of banks, the big 3 in Detroit, and more got bailouts over the rest of the year. The U.S. government went crazy (Democrats and Republicans alike) offering money to try and stimulate the economy.

– The Federal Reserve: 2008 was a busy year for the Feds as they continued to cut the Federal Funding rate down to its present level, which is virtually at 0%. The Feds main weapon (cutting the Fed rate) for stimulating the economy is now gone since the Federal Funding Rate cannot go any lower. Because of this, the Fed shifted gears to prop up mortgage backed securities. In November, the Federal Reserve bought billions of dollars of mortgaged backed securities causing rates to drop a half point over night. At their most recent meeting, they indicated they would continue to buy more mortgage backed securities, and rates got as low as 4.5% before rebounding higher.

As we end 2008, I could go on-and-on with this post about the details of every bailout, goals of Obama, interest rates setting yearly highs and then historical lows, property values declining at alarming rates in some parts of the country, etc. To sum it all up, 2008 was an exciting, tough, and hard fought year.

Now for the million dollar question, where exactly are we going in 2009? Some are projecting growth in the second half of the year. Other are saying “doom-and-gloom” for all of 2009. A more realistic thought, at least for the time being, would be to expect more of the same – bad economic news, volatility in both stocks and bonds, more attempts by the Federal Reserve and Washington to help stimulate the economy, and endless promises and blame shifting by politicians.

If moving toward a home purchase or refinance in 2009, be sure keep in touch with a mortgage broker who follows the market and is up to date on all the changes taking place. If you are in the state of Georgia, I have a great referral for you :-). Keep reading into the “disclaimer” below for ways to reach me in order to get prequalified to purchase or refinance a home.

Happy New Year!!

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about available programs and interest rates, please visit www.hillsidelending.com.

Confusion now hath made its masterpiece!

April 11, 2008

The above quote from Shakespeare accurately describes the current state of the lending world as the non-stop changes in this credit sensitive market continue to make qualifying for a mortgage more confusing than ever. Lenders have been steadily increasing their credit standards and now private mortgage insurance companies are tightening their qualifications. This tightening has changed loan programs across the board (across the country). Here are some of the recent changes.

— Most people know by now that 100% financing succumbed to the current state of the lending world at the end of March effectively making 97% financing the “new 100% financing.” Now, PMI companies are making it more difficult for borrowers to qualify to buy a home with only a 3% down payment.

— A+ credit isn’t what is used to be! Once upon a time, borrowers with a 680+ credit score received the same rate as a borrower with an 800 score. That is definitely not the case today. There are now a few new categories for rate adjustments: 680-699, 700-719, and some lenders even have 720-739!

— Lenders are making it increasingly difficult to qualify for investment properties. Clients looking to buy an investment property should expect at best a 10% down payment and now need to have an above average credit score. **UPDTATE as of June 2008 — minimum down payment amount for purchasing a condo as an investment property is 20%**

If you\'re confused, don\'t worry, you are not alone.

Don’t worry. If you are confused, you are not alone!

So what is the best way to prepare yourself if you plan to move into this mortgage madness?? Back to the basics . . .

— talk to a professional (like me) and get pre-qualified before you begin looking at homes

— make a quick phone call to double-check available rates, monthly payments and loan qualifications the day you make an offer on house.

— remember that before a bank or other lending institution will loan you hundreds of thousands of dollars, you should be prepared to invest a little in the process (a down payment of at least 3%), be able to prove you can meet your credit obligations (a good credit score), be able to prove you can afford the monthly payments (capacity and document-able income) and know that all the rules change if the collateral isn’t worth what the sales contract hopes it’s worth (meaning the appraisal does not support the purchase price).

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about available programs and interest rates, please visit www.hillsidelending.com.

Is “change” always a good thing?

January 9, 2008

“Change” is the buzz word going around right now. As presidential candidates are vying for votes, they all want to be seen as the candidate that can bring change. Political affiliations aside, here is the latest on changes in the way lenders set rates for borrowers.

We are all aware that 2007 was not a great year for the subprime market, and has lead to many subprime (and prime) lenders changing their guidelines, ending loan programs, or even closing their doors. We have been reading about this for months now, but subprime woes caused lenders to re-evaluate other loan programs and guidelines too — including loans for people with average and above average credit!

For instance, two years ago borrowers with a credit score of 680+ received the exact same rate. It didn’t matter if your score was 680 or 800, the rate was the same. Now lenders are making changes to the way credit scores affect rates, and the days of everyone with 680+ credit scores getting the same rate are over.

Here are some example rates for someone buying a $200,000, owner-occupied home with a 20% down payment. Remember that rates change everyday, but this will provide an idea of what is happening.

— 720+ score rate is 5.375%
— 680 – 719 rate is 5.500%
— 660 – 679 rate is 5.625%
— 640 – 659 rate is 5.750%
— 620 – 639 rate is 5.875%
— less than 620 rate is 6.000%, and that assumes the lender will accept a conforming loan with a credit score under 620, which is not likely in this market.

change“I will bring change, and it will better than theirs, promise!”

As all the presidential candidates put a positive spin on the change he/she will bring if elected, not all the changes proposed are beneficial for everyone. Changes in the subprime market were necessary, but recent changes for borrowers with average and above average credit is unfortunate. It seems we are all going to continue to feel the pinch from subprime foreclosures.

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about available programs and interest rates, please visit www.hillsidelending.com.

Credit scores can talk. What are they saying?

December 19, 2007

When buying a home, we all want to choose wisely so that the house we buy today will appreciate in value and, in turn, will make a profit when selling the home. All of us like the idea of making money!

Lenders are in business to make money too. You may view a home as an investment, but lenders view you, the borrower as an investment. No matter what the commercials on TV or the radio say, lenders view credit scores as the risk associated with that investment.

So why is your credit score so important? Many people don’t realize that their credit score and credit history provide the lender clues regarding how good of an investment a potential borrower will be. In fact, right now credit scores seem to be so important that scores are being used by dating services when matching people!

You may be wondering, “what happens if I miss a payment?” If you are over 30 days late for a payment, it isn’t the end of the world. Lenders will never see a missed payment at 30 days because they don’t exist on credit report. However, being late by 60+ days is not a good idea because it gives the impression to the lender that the borrower may not pay back the loan.

So, what exactly does your credit score say? Higher credit scores contain very few (if any) late payments, and vice-versa. If your credit score is lower (620 and below), it means there are several delinquencies in your credit history, which puts you into a “higher risk” category. The end result is lower score = higher risk = higher rate AND higher rate = lower risk = lower rate.

 

driving-test1.jpg
is this going on my record?

Think of your credit score as a driving history. If you have a lot of wrecks, get tickets, etc., your car insurance premium will go up. A worst case scenario… too many accidents and tickets could lead to the insurance company canceling your policy (from my personal experience at 16 years old, 2 accidents and 3 tickets within 18 months ought to do it). Credit scores and their impact on qualifying for mortgages work in a similar fashion.

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about available programs and interest rates, please visit www.hillsidelending.com.

 

a “do it yourself” guide for fixing your credit

November 9, 2007

In an earlier post, I mentioned some common myths associated with “credit repair” companies. The companies claim they can fix and improve your credit score. For details on how accurate those statements are, see my previous post.

As always, your credit score is important when buying a home, car, getting a credit card, etc. While mathematicians diligently work to crack the code used by the major credit bureaus when creating your credit score, the steps below are things you can do on your own to improve your score and even remove inaccurate negative marks on your report.

beautiful-mind.jpg

First, you need to obtain a copy of your credit report. The Fair and Accurate Credit Transactions Act allows you to obtain a copy of your report (free of charge) once every 12 months from each of the three main credit bureaus (Equifax, Experian, and Trans Union). This information will only contain your credit history. If you want the actual score, you will have to pay for it.

Note — Be wary of “free credit report” sites as your report is often “free” if you sign up for a service that is not free. For a truly free credit report, go to here. I have been through this process myself. It takes a couple of steps, but it is free.

Next, review your report and make a note of all your open/active revolving credit accounts — credit cards. You always want to keep the balance less than half of the available credit limit. Once you pass the halfway point, your credit score begins to go down. For instance, if you have a credit limit on a Visa card at $5,000, if possible, never have a balance of $2,500 or more. This is the quickest and easiest way to help improve your score.

As you review the report, remember that any accurately reported negative marks cannot be removed. Make a list of anything that is questionable, and the reason why you want to dispute it in order to write a dispute letter.

How to write a dispute letter:

— When writing your letter, be as specific as possible. As far as formatting and where to send the letter, each credit bureau has information for letter submission, forms to use, and their mailing address. You can even dispute online.

— for Trans Union

— for Equifax

— for Experian

— Send your letters by registered or certified mail. This lets you know when your letter was delivered and puts the credit bureaus on the clock. They must respond to you within 30 days of receiving your dispute letter.

— Wait… While waiting, be sure to keep the original credit report, copies of the letters you mailed, and all letters you receive from the credit bureaus.

— Once you receive a response from the investigation, compare your new credit report with your original report to see what has been removed.

And finally, try not to keep checking your credit. Checking your credit multiple times in a short time span can actually hurt your credit score.

If you want more detailed information, the Federal Trade Commission is very helpful. They give detailed step-by-step information and a sample dispute letter. You will need to scroll down on the page until you see “STEP ONE”.

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about available programs and interest rates, please visit www.hillsidelending.com.

“We’ll fix your credit!”… is this for real?

October 25, 2007

 

The days of being able to buy a home if you can sign your name and prove you have a credit score (even a low one like 580) are long gone. With mortgage qualifications and guidelines tightening, your credit score and history are more important than ever.

And there are companies out there who are eager to take advantage of the current situation. You may have heard radio or TV commercials for companies that claim they can “fix your credit forever.” If this sounds too good to be true, there is a reason for it – it just may be too good to be true!! Here are some common myths about fixing your credit that “credit repair” companies use.

MYTH #1: Negative entries can be removed from your credit report.

REALITY: No service (or person) can legally remove accurate negative entries on your credit report. However, the law does allow you to request a re-investigation of information in your file that you dispute as inaccurate or incomplete. This usually takes the form of a mistake reported to the credit bureau that has not been removed from your credit report.

MYTH #2: You don’t have access to the essential information needed to do the work “credit repair” companies can do for you.

REALITY: Everything a “credit repair” company does you can do for yourself at little or no cost. This would save you a lot of money because companies selling this “service” are not cheap.

MYTH #3: Requesting an investigation into mistakes on your credit report is difficult, confusing, time consuming, and expensive.

REALITY: While the process can be time consuming, there is no charge for requesting an investigation. Besides, even if there are small costs involved (stamps, envelopes), it would be much cheaper than paying a “credit repair” company to do it.

The point of the credit repair procedure is to verify accurately reported information. If a credit bureau reporting a collection cannot verify the information OR even be contacted, then collection is hard to prove and increases the likelihood of removing this inaccurate negative mark. If the creditor can be contacted, you will need to be prepared to offer proof of the mistake, which usually takes the form of a letter from a creditor admitting the mistake.

If you don’t want to spend the time or energy doing the legwork, these “credit repair” companies are the way to go. If you do decide to use one of these companies, just be sure you know exactly what they can and can’t do for you. If you don’t believe me, see what the Federal Trade Commission has to say:

 

“Yes we can fix your credit.  I mean, do we look like a bunch of con artists?”

 

“Do we look like con artists? Of course not, so don’t worry, we can fix your credit.”

In a future post, we will dive into steps you can take to review your credit report and to request an investigation for anything that has not been accurately reported…

Clay Jeffreys is a Mortgage Consultant with Hillside Lending, LLC and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com.