Credit Score Resources

                                  


Do you know your FICO credit score? If you are looking to purchase a home, be sure to look into your credit score well in advance.

Today’s market is competitive, with more cash buyers investing in property and multiple-offer transactions. Are you in the 700 range? 600 range? You will need some time to find out your score and work on improving it if need be. Check out the below sources to help you assess your credit situation.

Four Good Sources of Credit Information
Here are four websites worth visiting, if you want to learn more about your credit reports and scores:

1.    www.myfico.com — This site is owned by the company that created the credit-scoring model used by most lenders. The education tab is especially useful. Take a look at the forum where you can post questions.

2.     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.

3.     www.ftc.gov/freereports — This website is useful to find out why a “free” credit report is offered, but then they try to “charge” you for additional things. This is a marketing practice in wide use and this website can tell you more about it.

4.     www.bankrate.com — This site offers credit tips and it explains the mortgage process. You can compare rates, use a myriad of calculators and check out their “news and advise” tab for pertinent news information each week.

The four sites listed above will help you get started on your home buying adventure.

This Week’s Market Commentary

                                  

                                                      Ben Bernanke

This week brings us the release of six economic reports to be concerned with in addition to some very important testimony from Fed Chairman Bernanke. Two of the reports are considered to be very important, but nearly all of the week’s releases have the potential to affect mortgage rates.


The week’s first data comes this morning with the release of January’s Personal Income ad Outlays data, which gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 0.3% while spending is expected to rise 0.4.
Since consumer spending makes up two-thirds of the U.S. economy, the bond market does better when spending is slowing. Good news would be a smaller than expected increase, or better yet, a decline in spending.


The Institute for Supply Management (ISM) will release their manufacturing index for February late Tuesday morning. This index measures manufacturer sentiment and can have a pretty large impact on the financial and mortgage markets if it varies from forecasts. It is expected to show a decline from January’s 60.8 to 60.5 this month. This is important because a reading above 50.0 means more surveyed manufacturers felt business improved during the month than those who felt it had worsened, meaning likely growth in the manufacturing sector. If we see a weaker than expected reading, the bond market could rally.


Fed Chairman Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late Tuesday and Wednesday mornings. He will be speaking to the Senate Banking Committee Tuesday and the House Financial Services Committee Wednesday.


The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading Wednesday. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.
The biggest news of the week comes Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February’s Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading.
The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.1% increase in the unemployment rate to 9.1% and approximately 180,000 jobs added during the month. Weaker than expected readings would be great news for the bond market and should lead to lower mortgage rates Friday.


January’s Factory Orders will be posted late Friday morning, which will give us another measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for an increase in new orders of approximately 2.1%. A smaller than expected rise would be good news for the bond market and could lead to an improvement in mortgage rates.


Overall, look for a fairly active week for mortgage rates. Friday is undoubtedly the biggest day of the week, but Tuesday may also bring noticeable movement in mortgage rates.

Mortgage Delinquencies Declining

                                            

                                                 Graph via the Wall Street Journal

According to a recent Wall Street Journal article, there has been a decline in mortgage delinquencies as a result of an improving labor market.

The job market effects the mortgage market intensely, because, as the article points out, “people need a paycheck to pay their mortgage.”

During the fourth quarter, the number of people behind on mortgage payments fell to its lowest point in two years.

An important takeaway from this article: “The figures provide the clearest indication yet that the mortgage crisis that began four years ago has stopped getting worse and is easing.”

Another thing to note is that the state of California is doing extremely well compared to others, with the state’s total foreclosure inventory in the fourth quarter below the national average for the first time since the mortgage crisis began.

An economist said that without a spike in unemployment, the mortgage delinquency rate should continue to decline; a great sign for economic recovery.

Loan Pre-Approval and Turning Yourself Into a “Cash Buyer”

                       

Being pre-approved for a loan puts you in a great position when buying a home. It puts you on equal footing with an all-cash buyer, in essence turning yourself into a cash buyer.

With a real pre-approval, the buyer is the next-best-thing to being a “cash buyer” because the seller can rest assured that the buyer will qualify for a loan.

A truly “all-cash buyer” does not have to worry about lender approvals, but will typically still be concerned with a property appraisal and an acceptable title report.

Being pre-approved for a loan puts a buyer in a better position with the seller of the property. It allows the buyer to understand the costs associated with the purchase as well as the monthly costs associated with the ongoing ownership.

The Pre-Approval Process
The pre-approval process simply means that a buyer is getting approved for a loan prior to reaching an agreement with a seller of a property. The buyer will provide the lender with current income, asset and credit documents and the lender will determine the loan amount for which the buyer will be able to borrower.

The pre-approval process can take anywhere from 2 – 30 days, depending on the variables surrounding the possible transaction (credit worthiness, location of assets, calculation of income, etc).

Once a loan amount and purchase price have been determined by the lender, the final approval will usually be subject to an acceptable purchase contract, property appraisal, title report and final interest rates.

While it will vary from borrower to borrower based in the individual characteristics, a lender will typically be able to pre-approve a buyer within 5 days of receiving all of the applicable income, asset and credit documents.

The Best Time in History to Buy a House

By Dr. Steve Sjuggerud Friday, January 28, 2011

Right now, is the best time in history to buy a house in America.

 

Today, I'll show you why… based on a few cold, hard facts.

 

First off, mortgage rates are lower than they've ever been in American history…

 

Most investors have only seen a couple decades of mortgages rates on a chart. But my friends at Global Financial Data have databases – including real estate data – that literally go back centuries.

 

I had dinner with the Global Financial Data team over the weekend. And they told me about their "Winans International" real estate indexes, with housing prices back to the 1800s and mortgage rates going back over a century. I had to share it with you…

 

Take a look at this chart of mortgage interest rates since 1900:

 

 

As you can see, current mortgage rates are the lowest in U.S. history.

 

When were mortgage rates even close to this low in the past? Just after World War II…

 

And what happened, just after World War II, when mortgage rates were this low? The greatest postwar boom in housing prices – by far.

 

 

Take a look. Mortgage rates bottomed in the mid-1950s, and house prices bottomed about the same time. Then the greatest boom in home prices in our lifetimes started.

 

Today we have record-low mortgage rates. And we have another thing in our favor…

 

Homes are more affordable than ever.

 

Based on the 40-year history of the Housing Affordability Index… houses are more affordable than they've ever been. Take a look…

 

 

"Affordability" takes three factors into account: home prices, your income, and mortgage rates.

 

Home prices have crashed. And mortgage rates are at record lows. But incomes (nationwide) haven't fallen nearly as much… So homes are now more affordable than ever.

 

"Most people" out there will only tell you the bad news about housing… That's the way it goes in a bear market. People drive looking in the rearview mirror.

 

Meanwhile, we have some darn compelling facts out there…

 

Home prices have fallen by a third… and mortgage rates are the lowest in history. Therefore, U.S. homes are more affordable than they've ever been.

 

You can listen to "most people." Or you can choose to ignore them and stick to these facts.

 

Based on these facts alone, now may be one of the best times in American history – even the very best time – to buy a house.

 

Good investing,

Steve

P.S. If you need long-term data like I showed in the charts above, talk to my friends at Global Financial Data. You can find them at http://www.globalfinancialdata.com/.

 

Article Link: http://www.dailywealth.com/1615/The-Best-Time-in-History-to-Buy-a-House

Real Estate Agent Safety: Marketing and Personal Information

Don't set yourself up to be victimized because of excess personal information in your marketing.

Flashy personal marketing can be a great tool, but beware of the information you include in these materials. Some predators target real estate agents, especially females, they find through the agent’s marketing.
THE RISK: Marketing materials that contain photos of yourself may attract the attention of criminals. Police have found criminals circling real estate professionals’ photos in newspapers and marketing materials (Read one agent’s account of this.)

                                                    SAFETY  TIPS

• Avoid provocative photos in your marketing. Low-cut blouses, full-body photos, and looking over your shoulder in a sexy pose can send the wrong message to criminals. “Why do you have to have photos anyway? What are you selling?” asks one Realtor, who advises against ever using a photo for business reasons; she uses a caricature.

“You make a living meeting complete strangers in empty houses. They see your photo and if you’re exactly what they’re looking for — whether that be an older or younger agent, blonde hair, blue eyes, whatever — they know all it takes is one phone call to meet you in a house. A picture can be dangerous.”

• Watch what you wear. Only wear shoes that you can run in. Avoid short skirts, low-cut tops, and expensive jewelry. “Predators don’t have the same boundaries as you do. They look at you like that and say ‘She’s asking for it,’” according to a personal safety expert.

• Protect your personal information. Use your cell phone number and office address in your marketing so it can’t be tracked back to your home address. Never use your home address or home phone number. Also, don’t reveal to your client personal information about your children, where you live, and who you live with — you can still build a relationship with clients without revealing all of your personal information, recommends the Washington Real Estate Safety Council.

Ways to Reduce Stress When You’re Moving

                             

             Savor time taking care of yourself to reduce the stress of moving.

Buying and selling a home and moving is one of the most stressful processes on the human psyche. It is important that while going through the real estate process, you find time to take care of yourself.

Just like on an airplane, you have to put an oxygen mask on yourself before helping anyone else. This means that in order to be able to take care of things and other people, it is important that you make sure you take care of yourself first.

Try setting aside relaxation time just for yourself each day, and do something you enjoy, despite the hectic and stressful nature of moving.

Reading a good book, spending time outside, taking a long bath, getting a massage – things like this will help you reduce your stress level immensely. With less real estate stress, handling the details will be easier.