Credit Scores Now More Important than ever

Buyers anxious to take advantage of record low interest rates may be disappointed if their credit score does not qualify them for a loan. Buyers who qualify for a mortgage may find that they're ineligible for the best rates because lenders have tightened their credit standards. “Credit scores have never mattered quite as much as they do now,” says Bob Walters, chief economist for Quicken Loans. As an example, current Fannie Mae standards announced this week requires a credit score of 620 for a mortgage with 20% down...in the past a 580 credit score was acceptable.

If you’ve already found a home you’d like to buy, there’s not much you can do to raise your score before you apply for a loan. But if you’re just starting to tour open houses, there are steps you can take to improve your credit profile, including:

• Review your credit reports for errors. You’re entitled to a free credit report once a year from all three of the bureaus, but only if you go through this website... www.annualcreditreport.com.

• Pay off credit cards and other debts. One of the factors used to calculate your credit score is your “credit utilization ratio,” which measures the amount of credit you have outstanding vs. your total available credit. This ratio accounts for 30 percent of your score. Paying off balances will increase the amount of unused credit you have available, which will help your score.

Even if you’ve decided never to use credit cards again, don’t close your accounts. Closing a credit card account won’t help your credit score and could hurt it.

• Avoid opening any new accounts.

The Making Home Affordable Program

Many Homeowners are having trouble with their mortgage payments, for a number of reasons ---loss of income, adjustments in the mortgage interest rates, as well as other issues. Here's a plan which may help --- a permanent loan modification program. For more information, visit www.makinghomeaffordable.gov

$8000 Home Buyers Credit Extended

Good news for homebuyers! The $8000 tax credit for first time homebuyers was extended by the Senate panel today until April 30, 2010. Homebuyers only have to have an accepted contract by that date, with closing by June 30.

In addition, the credit was expanded to include other purchasers of a home as well. A credit of $6,500 will be offered to purchasers of a primary residence as well (this is not a first time home buyer).

Income limits were also raised, to $125,000 for single taxpayers, $225,000 for joint taxpayers.

Fall is in the air -- With the Fall Festival Oct 30

Fall is very much in the air, and a much needed respite from the summer heat!!! Alachua, FL is planned for Friday, October 30 from 6-8pm. An annual event for the city, join us in your festive garb as we 'Trick or Treat' on Main Street. A highlight of this event is the activities held at the First Baptist Church....games and activities ranging from a water dunk, to cookie decorating...a great time for the entire family! I look forward to seeing you next week!!!

So what do all those Letters Mean?

Realtors oftentimes have a series of letters after their names....so what do they mean anyway?

Simply put, these letters are special designations for realtors. To receive such designations, realtors attend additional training in specialized areas, and oftentimes have to complete a number of transactions to demonstrate they have experience in addition to the formal training received.

I am an SRES....a Seniors Real Estate Specialist, meaning I have additional training and expertise in dealing with customers 50 and over. As you know, seniors have unique needs, and have services available to them which others do not -- such as a HECM or reverse mortgage. As we go through life, we have unique needs at different stages, our older population is no different.

Understanding the situation and needs of folks as they get older is important if we are to be able to meet their needs.....after all, real estate is more than a transactional business, it's a people business, building relationships as we go.

An Easy Way to Shave Months - or YEARS off your Mortgage

Owning your own home is a wonderful feeling! Committing yourself to a mortgage of 30 years, however, is a 'not so good feeling'. This is especially true when you consider how much interest is paid over the life of the loan. For a $100,000 mortgage over 30 years, interest payments alone will be $115,838 --- WOW. There are several alternatives to paying this amount of interest, and have the loan paid off sooner.

One alternative is to finance with a 15 year loan...the advantage is obvious, interest over 15 years for the same mortgage would be $51894.....a savings of $63,944. The downside to this is that the monthly payments are increased by about $250....from $600 to $843. I know, if I could aford that, I would have bought a different house!!

Another option to shorten the mortgage is to pay the first month's payment on the first day following close on the property. As mortgage interest is calculated in arrears, you generally skip the first month's payment following closing on the property. This one action will reduce the term of the mortgage by about 7 months! The $600 paid early will result in a savings of about $4200 in interest over the life of the loan.

The final option is to pay additional principle on the mortgage each month. A lot is heard about bi-monthly mortgage payments, where lenders will allow you to pay every other week instead of once a month. By doing this, you make 13 monthly payments annually rather than 12. Most lenders charge a fee for this service. You can accomplish the same thing (and avoid the fees!) by taking your monthly payment and dividing by 12 (in this example $50), then adding that to the monthly payment and indicating that it is 'additional principle'. This option if done regularly will reduce your mortgage by nearly 6 years, and save a significant amount of interest over the term of the mortgage!!

You may be able to refinance your existing Mortgage if you are 'under water'

Borrowers hoping to refinance who do not have at least 20 percent equity in their homes may qualify for the Obama administration’s “Making Home Affordable” program. Through June 2010, borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac may be able to refinance for up to 105 percent of a home’s value.

Homeowners must be current on their mortgage payments and may qualify with credit scores as low as 620. Borrowers who do not meet the criteria for the refinance program may be eligible for another Obama administration plan that focuses on loan modifications. See www.makinghomeaffordable.gov.