Real Estate Really

Fickle FICO Continued!

With Thanksgiving upon us, couldn’t help but pass along this holiday anecdote:

 

A lady was picking through the frozen turkeys at the supermarket, but couldn't find one big enough for her family. She asked a stock boy, "Do these turkeys get any bigger?"
The stock boy replied, "No ma'am, they're dead."

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As promised, here are some other special factors which can weigh on your FICO score:

·     Current income

·     Employment

·     Any money owed because of a court judgment or tax lien

·     Having one or more consumer finance credit accounts

·     The number of recent credit checks (credit inquiries that were made yourself to check your credit, by your employer for employee verification or by companies initiating prescreened offers of credit or insurance do not have any impact on your credit score)

It's amazing what changes the credit score.  I've been watching mine on a monthly basis and when I make even a meager $30 charge for something, I'll get an alert that one of credit card balances has increased significantly!!  

 

It is extremely important that everyone out there take responsibility to monitor their reports and scores.  Credit scores can be adversely affected if the information in a credit report is not updated by a lender. Lenders and others that furnish credit information to a credit bureau usually update it every month. If they don’t report to the bureau that debt has been reduced or paid off, it will stay on the credit report until you find the error and report the updated status yourself!

 

Contact me for any of your real estate needs and have a HAPPY THANKSGIVING ! dgreco@kw.com

 

Location, Location, Location ?? Not Anymore!

If you've spotted an expensive home for sale  in that high-end neighborhood where you've always wanted to live, but still can't afford it without taking an interest-only loan, BEWARE!  As I’ve blogged before, “interest-only” loans are a bad idea. When these loans come due with balloon payments, it could have a significant adverse affect on the real estate market as a whole, not to mention those who can’t pay their mortgages.  It's time to change your focus from today's location to tomorrow's location! 

 

Odds are there are more affordable houses a little farther out – in the next neighborhood or next town.  Picture the value of that home in five to ten years – not it's value today -- when you are likely to sell it.   If you don’t have time to spend your weekends driving around to search these soon-to-be hot locations, contact me for help.   I’m up to date on the areas undergoing economic development and growth and can help with your location decision.  Contact me at dgreco@kw.com to get you on the road to your new future!!

The Fickle FICO

Okay, blog readers of the world, here’s the first of several lessons on the infamous Credit Score, in language you can understand.

 

What is FICO?  Literally, it stands for Fair Isaac Corporation – named after Mr. Fair and Mr. Isaac, who developed a ‘score’ or measure of credit risk and sold it to the banking industry.  These guys are probably so rich they don’t need to be concerned about their own FICO scores … but you do.

 

A FICO score is between 300 and 850, with the median score of 723.  The FICO score provides banks with a snapshot of how likely you are to pay your debts.  As you have discovered if you have applied for any credit, banks may deny the loan, charge you a higher interest rate, demand more collateral, and/or require extensive income and asset verification if your score is low.

 

The score itself is a statistical analysis of your credit report information, typically from the three major credit bureaus – Equifax, TransUnion, and Experian.  Here are the components of your FICO score: 

 

35% — Payment History.  Pay your bills on time!  I have a friend who never received a $24 bill from a department store, because she moved and didn’t notify her creditors.  That $24 past due bill ballooned into a $285 collection from a collection agency, and she has been denied a mortgage loan because of it!

 

30% — Credit Utilization.  The ratio of credit card debt to your credit limits.  Pay off your debt but don’t close your credit cards.  If you have an abundance of credit cards though, it is best to close the ones you never use and get it down to a reasonable level of just a few credit cards with larger credit limits.

 

15% — Length of Credit History – As your credit history ages, and pay your bills on time, it can have a positive impact on your FICO score.

 

10% — Types of Credit Used – Installment (car loan for instance, revolving (credit cards), and consumer finance (financing from a furniture store for example).  You will benefit by having a history of managing different types of credit.

 

10% -- Recent search for credit and/or amount of credit obtained recently.  Don't go crazy opening new credit cards or applying for financing for that new carpet or couch!  Don't fall for the "You can get 10% off your purchase today if you apply for a credit card".  Multiple credit inquiries in a short period of time will hurt your score!

 

The FICO company sells FICO scores directly to consumers at www.myFICO.com.  Check it out!  There are other factors that lenders consider when granting credit -- more on that later!  If you would like more information on applying for credit for your new home, contact me at dgreco@kw.com!

Get your (Financial) House in Order!

Before you go looking for mortgage financing, it goes without saying that you should review your credit report.

 

Now, there are three credit bureaus that mortgage lenders use – Equifax, TransUnion, and Experian.  Despite all the commercials you see on TV to pay for it, you are entitled to a free copy of your credit report every 12 months.  -- OMG, will freexxxxxx.com please get rid of that obnoxious jingle! Really, who writes that stuff?!

 

Now, if you’re married, it can be assumed that the majority of your credit cards and loans are held jointly.  The majority of the credit shown on your report will also be reflected on that of your spouses.  So, here’s a little trick of the trade to ensure you always have a good picture of your credit report – without having to pay for it!   

 

Register for your credit report at www.annualcreditreport.com.  For starters, choose just one credit reporting company for your report (I would suggest Equifax, since the majority of mortgage lenders in our area use this bureau). 

 

Here’s a schedule:

Jan – He – Equifax

March – She – TransUnion

May – He - Experian

July – She – Equifax

September – He Transunion

November – She Experian

 

Now, you’ll have a full picture and a pulse on your credit report all year long.  Review the information to make sure all information is correct.  You are able to correct and or dispute information directly with the credit bureaus.  If you have past credit problems, don't lose hope.  Get on track now so that your ability to pay bills on time will be evident on your report when you apply for a mortgage.  Be prepared to present a rationale for any adverse information.  SLIPUPS HAPPEN!  But will a little perseverance on your part, you can raise your credit score and qualify for a mortgage, even with today's stricter credit criteria.  Contact me at dgreco@kw.com for more information on how to make your American dream a reality!

Thanks for serving - now it's your time to be served!

Many restaurants, stores, and other businesses offer free items and discounts to military members, retirees, and other veterans !   Most places require proof of service such as a military or retiree ID card, DD Form 214, VFW card, or other proof of service, so be prepared if you are asked for proof of service.

Golden Corral's Military Appreciation Monday

Golden Corral's 9th annual Military Appreciation Monday dinner is scheduled for Monday, November 16, 2009, from 5 to 9 pm in all Golden Corral restaurants nationwide. The free dinner meal is open to anyone who served in the US Military and is open to all veterans, retirees, active duty military members, and members of the National Guard or Reserves.

Applebee's Free Meal on Veterans Day

Applebee's is supporting military veterans again this year by offering military members and veterans a free meal on Veterans Day. Simply show proof of military service, including showing up in uniform, military ID, military service organization ID (VFW card, etc), a picture of you in uniform, or other proof, and select a free meal from a special menu.

Other Veteran's Day Discounts and free meals:

• Lowe's and Home Depot military discounts. The stores often give military members and veterans a 10% discount on military holidays. Be sure to ask and bring your ID!
• Outback Steakhouse Veteran's Day Deal.
• Golden Corral's Free "Thank You" Dinner for Military.
• McCormick & Schmick's - Veterans Eat Free.
• Veterans Eat Free at Applebee's.
• Check for local restaurants and businesses for more discounts!

Veterans -- if you're in the market to get your house on the market, contact me for help -- dgreco@kw.com

It's a buyer's market out there!

It’s time to start looking to buy that house.  Keep it simple. Buy smarter. Buy cheaper.  Buy for the long haul.

Determine what you can afford. Mortgage lenders have tightened their standards and are requiring larger down payments. Typically, they want buyers to spend no more than 28% of their gross monthly income on mortgage payments, real-estate taxes and home insurance.

To figure out how much you can afford, use online calculators at realestatejournal.com, dinkytown.com or bankrate.com.

Be sure you also have cash for closing costs like legal fees and title charges. The total typically reaches 2% to 3% of the house price, but differs by state and mortgage product. 

Now more than ever, location is crucial, down to the neighborhood and street level. Focus on good school districts, crime statistics and any impending construction or public works that could increase or decrease the value of a home.

If you want to make your dollars count, contact dgreco@kw.com to assist you in assessing your needs, researching the local market, and finding your perfect home now! 

How does your garden grow?

The warm weather today found lots of folks outside tending their gardens.  Except for those die-hard Redskin fans that stayed in to watch the game.  It was too painful for me!

 

If you're planning to put your house on the market in the spring, or even have it listed now, what better time to spruce up your landscaping to ensure inviting curb appeal! 

 

Leaf blowers were hard at work today (except for the one guy down the street that seemed to think it was time to put up his Christmas wreath).  But did you know that if you just mow the leaves they provide much needed nutrients to your soil?  They will decompose eventually.  If you prefer to join the leaf blowing brigade at least rake some up around your trees as a mulch.  You can never have too much mulch but it does get expensive!  Using the fallen leaves instead will help your trees and perennials retain moisture during the winter and gives some vitality to your garden beds.

 

Now is the time to plant your bulbs!  Planting bulbs late in the season (November is ideal for our zone) discourages fungal diseases.  With the red clay this area is notorious for, I till the soil a bit with a 'claw', and mix in a fresh bag of top soil with a bag of leaf gro, along with a little composted manure.  Always plant bulbs in clumps -- groups of 5 or more and all one color is always best for show.  I use a little  bulb booster as well -- it shouldn't come into direct contact with the bulbs.  Deer don't eat daffodils, but love tulips as do I.  If Bambi is known to visit your yard, it is suggested to use some deer repellent in the spring as foliage emerges. 

 

It's also a good time to dump all of your pots containing withered annuals -- the potting soil with built in fertilizer is great for adding nutrients to your garden beds.  I pretty much dump whatever leftovers I have in my garden shed too -- peat moss, leftover potting soil, etc. 

 

Turn that landscape into something beautiful and those buyers will want to come in to see more!  Contact me at dgreco@kw.com for other ideas on how to make your home appeal to the masses and ensure a quick sale!  Happy gardening!

CASH FOR PUNKERS!

There is still hope for all the yougsters out there that don't think they can afford to buy a home in Northern Virginia!   Rates are down, there's lots of defaulted mortgages, and plenty of homeowners who are ready to unload their property.  Now both houses of Congress have approved an extension and expansion of the first-time homebuyer tax credit, and President Obama is expected to sign it soon.  If you haven't owned a home in the last three years you will qualify for a tax credit of up to $8,000! 

Even those seasoned homeowners who have owned their current home for at least five years will qualify as a first-time homebuyer.  As long as you've lived in it as your primary residence for five consecutive years in the last eight years, you can claim a tax credit of up to $6,500 when you buy and move into another primary home.

Both tax credits expire next spring. To qualify, the purchase contact must be signed on or before April 30, and the deal has to be closed on or before June 30.

If you buy a house for more than $800,000, you can't claim either tax credit. Of course if you've qualified for that big of a loan, you don't need the $8,000 anyway.  There are also income limits with the new extension -- the tax break phases out for filers with a modified adjusted gross income between $125,000 and $145,000 ($225,000 and $245,000 for joint filers).

What are you waiting for?  Contact dgreco@kw.com and I'll show you a house that will fit your budget!