With mortgage interest rates hovering near record lows, you may want to either refinance your mortgage or purchase a new home before rates go higher again. The question is – can you qualify for refinancing or a purchase loan?

Lenders have tightened loan qualification standards and their most widely used tool to determine if you qualify for a loan and at what interest rate. Credit scores are determined by a software algorithm that analyzes your credit and payment history.

These “FICO” scores run between 300 and 850, with the highest numbers considered to be the best scores. The 47% of Americans with credit scores of 720 or higher receive the best interest rates, according to MyFICO.com and a new survey by Zillow Mortgage Marketplace.

But, during the first half of September 2010, nearly one-third of Americans who applied for a mortgage couldn’t qualify because their credit scores were too low, even with a 15% to 20% down payment.

Those with scores 720 or above qualified for annual percentage rates of 4.3% on benchmark 30-year fixed-rate loans. Borrowers with mid-range scores from 620 to 719 received APRs of between 4.73% and 4.44%. Fannie Mae imposes a minimum credit score of 620 for any loan intended for sale on the secondary market.

Credit scores make a significant impact. For every 20-point credit score increase, found Zillow, the average low APR declines 0.12 percent, a savings of $6,400 on a $300,000 home over 30 years.

Improve your credit scores

FICO scores are based on your credit history. Each credit reporting bureau, Experian, TransUnion, and Equifax calculates its own score, so you may have three scores.

The first thing you need to do is review your credit reports for errors and get them resolved as quickly as possible. Visit annualcreditreport.com to get copies. You can then purchase your credit scores for approximately $14.95 from each agency or all three at myfico.com.

FICO scores change with every new report that comes into the credit reporting bureau, so the credit score you receive today can be improved quickly by following some dos and don’ts.

·Don’t close credit card accounts. FICO scores utilize a credit utilization ratio that turns against you because it appears that you might be overusing your available credit.

·Don’t max out or consolidate credit cards. Credit card companies like it if you only use about 30% of your available credit on your card. You’re better off having small balances on multiple cards than a large balance on one card.

·Don’t apply for new revolving credit or transfer balances. If you’re buying a new home, it’s tempting to buy some new furniture, but don’t open that account until after your loan closes. You don’t want “inquiries” to be raised in the scoring algorithm.

·Don’t change jobs right before you apply for a home loan, although job changes within the same field are considered more favorably in scoring.

·Do pay all bills on time and with at least the minimum payment due. Lenders like on time payment histories.

·Do pay down your debt, as lower income-to-debt ratios are attractive to lenders. Start by reducing credit card balances first, beginning with the balances that generate the highest interest rates. Revolving credit is considered riskier debt than installment loans such as student loans or car payments.

·Do shop lenders simultaneously. Credit score software takes into account several inquiries from mortgage lenders as normal, but if you space rate-shopping out over weeks or months, that could impact your credit score negatively.

Remember, mortgage lenders are most interested in your ability to repay their loan. The most important factors are job and debt payment history. Job security – long-term employment in the same field and on-time credit payments are the best ways to build and protect your credit scores.

With the complexity in today’s mortgage and real estate market you will benefit from the advice and guidance of an experienced and knowledgeable mortgage and real estate professional. To see how our technology supports the needs of Buyers and Sellers, click here.

I’m always available to answer your questions or discuss your concerns. Just text, call (650 325 7877) or email me for a prompt response. If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center,www.AboutBayAreaHomes.com. There you will find links for active home listings, home loan information, market activity reports, home seller strategies, staging and decorating ideas and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage Originator Endorsement 230411.

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Are you ready to buy a foreclosure?

Due to the mortgage crisis that our country faced over the last several years, there are continually more and more foreclosure properties that are being put up for sale everywhere you turn. Of course, this can be very tempting for homebuyers as people can sometimes get properties for 30% or even less on the dollar.

However, if you are considering a foreclosure property for your next purchase, then there are some common pitfalls that you will need to avoid along the way to protect yourself and your future asset. Let’s review some areas to be aware of before making any serious offers.

1. Avoid Making Emotional Offers:When you are planning on putting a bid down on a property, you need to be extremely confident with the home’s current condition, its true market value, and what will be needed to fully restore the property.

Too many buyers will think that they found a great deal and fear that they will lose the home to another bidder. So instead of taking the time to truly do their homework and complete the proper inspections and analysis, they can end up locking up a property for more than it’s actually worth.

2. Estimate Neighborhood Values:Consider what other comparable properties are selling for and talk to a real estate agent who has a working knowledge of the area. In fact, it’s a wise decision to thoroughly review these questions and any other recommendations your Real Estate agent may make:

Is this neighborhood a desirable location. Are there schools, parks and shops nearby? Will I feel comfortable walking down the street at night?

What schools would be available for my kids or future buyers?

Were there any other foreclosures or investor sales that could negatively affect the future value of my home?

How long do I plan on living there and how could that affect things?

What type of appreciation should I expect?

3. Get Preapproved:Before you even start looking at homes, you must get preapproved on a mortgage in order to know exactly what you can afford. Sadly, many buyers can miss out on some phenomenal deals or spend hours of wasted time because they avoid this step. Show banks that you are a serious buyer and have your financing in place!

4. Get Professional Help: Not only should you seek the expertise and of an experienced Realtor®, but you may also need guidance from a real estate attorney or financial consultant as well. Each professional can ensure that you are making the right choices throughout the process and can protect you from any issues you may come across along the way.

Remember that there is a lot more than meets the eye when you are trying to buy a foreclosure property. Negotiating with the banks, filling out paperwork properly, and undergoing all the necessary inspections can be a very detailed and tedious procedure. Therefore, we encourage you to give me a call today to get started. Put my years of experience to work for you.

With the complexity in today’s mortgage and real estate market you will benefit from the advice and guidance of an experienced and knowledgeable mortgage and real estate professional. To see how our technology supports the needs of Buyers and Sellers, click here.

I’m always available to answer your questions or discuss your concerns. Just text, call (650 325 7877) or email me for a prompt response. If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, home loan information, market activity reports, home seller strategies, staging and decorating ideas and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage Originator License Endorsement 230411.

Posted via email from brokerruss’s posterous

Russ Boyd’s videos syndicated by

Now that we are in the summer home buying months I thought it would be a good idea to take a look at some market indicators for the Bay Area Counties.
As can be seen below, the media selling price has dropped for most Bay Area Counties during the past 12 months.  Now keep in mind, the median sales price is merely an indication of what price range has the most sales, it says nothing about the value of any specific home nor its current value.
A key component of sales activity is reflected in available inventory for sale.  After all, home sales and prices are deeply impacted by supply and demand.  As can be seen, “for sale” inventory is down dramatically in the past 12 months.  

At this link, Bay Area Market Metrics, you will find the complete reports by county, including considerable more information than is seen here.

San Mateo County-Median Price   July 2010 $797,500 July 2011 $810,000  -2 .0%
                                    
                                 Inventory      July 2010 4.9 months July 2011  2.6 months  -48%
                                    

Santa Clara County-Median Price  July 2010 $630,000 July 2011 $620,000  -2 .0%
                                    
                                  Inventory      July 2010 4.8 months July 2011  2.0 months  -58%   
                                      
San Francisco-MedianPrice   July 2010 $488,000 July 2011 $649,000  +33 .0%
                                    
                          Inventory      July 2010 11 months July 2011  2.6 months  -77%
                                    
Santa Cruz County      MedianPrice    July 2010 $500,000 July 2011 $460,000  -8 .0%
                                    
                                    Inventory         July 2010 6.3 months July 2011  3.8  months  -40%   
                                    
Alameda County-MedianPrice    July 2010 $450,000 July 2011 $428,000  – 5.0%
                                    
                             Inventory       July 2010 3.8 months July 2011  2.4 months  -37%   
                                     
Contra Costa County-Median Price   July 2010 $315,000 July 2011 $301,000  -4.0%
                                    
                                   Inventory       July 2010 4.8 months July 2011  2.2 months  -44%
                                    

With the complexity in today’s mortgage and real estate market you will benefit from the advice and guidance of an experienced and knowledgeable mortgage and real estate professional. To see how our technology supports the needs of Buyers and Sellers, click here.

I’m always available to answer your questions or discuss your concerns.  Just text, call (650 325 7877) or email me for a prompt response.  If you are in the San Francisco Bay Area,  I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, home loan information, market activity reports, home seller strategies, staging and decorating ideas and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage Originator License 230411.

Posted via email from brokerruss’s posterous

Russ Boyd’s videos syndicated by

Fannie Mae has implemented a new policy that is very important if you are thinking buying and financing a home. This is especially true, since most lenders use FNMA’s guidelines. As of June 1, 2011 lenders became responsible for certifying the borrower’s monthly obligations have not increased from the time of the initial credit report through the closing date. 

This is effective for new conventional applications only and is not applicable for VA, FHA or Rural Development loans at this time. However, they could follow suit. For Fannie Mae, the goal is to reduce the number of loans that default because of new, non-disclosed debt. Lenders have the freedom to verify in whatever manner they wish, but in most cases, the verification process will amount to a credit re-pull made just prior to closing. A credit report will be pulled at the beginning of the application and will also be pulled 5 days prior to closing. 

What does this mean for the conventional borrower? It means that you absolutely should not take out any additional credit or even have an inquiry into your credit report from the time you start the loan application until after you close. 

Tips to Avoid Last Minute Issues 

DON’T: 
• Take out any new credit during your loan application – wait until your loan has closed 
• This means no furniture shopping, new window treatments and especially no “Buy now –Pay later” type of financing 
• Use your line-of-credit to purchase anything 
• Make any large purchases using your credit cards 
• Co-sign on a loan for anyone else 
• Pay for the mover upfront – ask to be billed later 
• Go car shopping even if not ready to buy yet – the dealer may pull your credit that will result in an additional inquiry 
• Add to your current debt load as of application time until after closing 
• Pay late on any obligation 

DO: 
• Create paper trails for all deposits into your asset accounts 
• Be prepared to write letters of explanations for anything out of the ordinary, e.g.: -For inquiries into your credit report – for any reason – over the last 90 days -For any derogatory credit issues -For any employment gaps 
• Speak with your loan officer if you have any questions regarding any of this information

With the complexity in today’s mortgage and real estate market you will benefit from the advice and guidance of an experienced and knowledgeable mortgage and real estate professional. To see how our technology supports the needs of Buyers and Sellers, click here.

I’m always available to answer your questions or discuss your concerns.  Just text, call (650 325 7877) or email me for a prompt response.  If you are in the 

San Francisco Bay Area,  I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, home loan information, market activity reports, home seller strategies, staging and decorating ideas and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage Originator License 230411.

Posted via email from brokerruss’s posterous

Posted via email from brokerruss’s posterous