Archive for September, 2009
Last Friday The Department of Housing and Urban Development (HUD) had a news release that will impact the San Diego mortgage process quite a bit. HUD controls the Federal Housing Administration (FHA) insured mortgage programs that have seen a huge increase in popularity since the “mortgage meltdown”. Fridays press release gave reference to plans to implement a set of new credit policy changes that will strengthen the agency’s risk management. Rumors have been going around that FHA has dropped below the capital reserve ratio of 2% mandated by congress. They have also announced that a new position of Chief Risk Officer will be created for the first time in FHA’s 75 year history.
Most first time home buyers are using FHA programs for their San Diego mortgage since they allow up to 96.5% financing so the stability and survival of the program is extremely important. These changes take effect January 1st 2010 and have an effect on who can originate FHA loans, the appraisal process and reserve requirements for lenders that originate FHA mortgage loans. This news seems to be very positive for consumers and hopefully for the San Diego housing market as a whole.
To see the press release CLICK HERE.
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When looking for a San Diego home mortgage, good credit is more than worth the effort it takes to both achieve and preserve. If you have good credit, I hope these tips will help you push your scores even higher. If you have less than perfect credit, now is the time to start rebuilding it so that you can qualify for the right San Diego home mortgage. If you are planning on buying a home in the next 6 to 12 months you cannot afford to make these mistakes!
Do not get behind on any existing accounts. Just one 30 day late payment will drop your credit score 25 to 75 points. If you miss a mortgage payment you may be disqualified from getting a new San Diego home mortgage completely.
Do not pay old collections, charge offs or medical bills. I know that this one sounds crazy but paying on old collection account will immediately make your FICO score drop. You should not pay off old accounts before or during your escrow unless the underwriter for your new San Diego home mortgage is the one instructing you to do so.
Do not close credit card accounts. In the past BEFORE the FICO score model some banks and lenders would want you to close accounts because if you had access to the credit the assumption was that you would use it. Now when you close a credit card account it will make your credit score drop on the next bureau update. A big part of the credit scoring model is how much debt compared to the amount of your available credit. On your revolving accounts you should be sure to keep your balances low. Having balances under 35% will give you the maximum credit scoring results. For this reason you don’t want to consolidate your credit card balances onto one or 2 cards. The length of your credit history is also very important. So if you have to close an account make sure it is a newer one.
A question that I get all the time is, “How fast can my score go up 100 points?” ,unfortunately the only way that the credit score moves fast is DOWN. When you are trying to get a San Diego home mortgage doing NOTHING is better than doing anything fast. The FICO system and credit scoring model is set up to reward stability. If you start changing things around (especially doing the wrong things) and your credit usage habits change drastically, it will almost always make your credit score drop.
If you have any credit or San Diego home mortgage questions or would like a copy of our Credit Scoring booklet give me a call at (619)285-2921 today.
It is estimated by the Federal Trade Commission that as many as 9 million people in America fall victim to identity theft every year. Unfortunately too many people have no idea that they have been victimized until they are applying for their San Diego home mortgage.
Identity theft happens when information such as credit card numbers or social security numbers are used to make purchases, open credit cards or other accounts in your name.
Do Annual Credit Check-Ups!
Visit www.annualcreditreport.com to get a free credit report once a year. Closely review all 3 credit reports and look for anything suspicious or unusual. Look for unusual addresses or inquiries that were done without your knowledge. You should do this once a year so there are no credit surprises when you try to qualify for a San Diego home mortgage.
Opt Out of Special Offers!
Go to www.optoutprescreen.com to cut down on all of the pre-approved credit card offers that come in the mail. Many identity thieves do things the low tech way, by stealing mail. They do this by getting it from a mail box or going through your trash. Make sure to shred all documents that contain ANY personal information before you throw it away or recycle it.
Do Not Give People You Don’t Know Your Information!
Avoid falling prey to phishing scams either over the phone or by e-mail. Phishing scams done by identity thieves that pretend to be someone from your bank or another credit institution and ask you for your personal information. If someone contacts you requesting your personal information, do not give it to them. Any company that you have a bank account or other credit account with already has your information! Find out the name, phone number and employee number of anyone asking for your information and tell them that you will call back. After hanging up the phone, call the number on your account statement. NOT the one that the person gave you to see what the issue with the creditor is, if anything. This is all basic common sense; if you don’t shred your personal information before discarding it, anyone can go through your mail or trash to find out where you bank and your phone number. They can then call you and say that they work for your bank and they had a few “quick questions” after you verify your identity. If they are a smart trash digging identity thief, they can go into your bank and look at a few name tags and say, “I work at the branch up the street with Tim and Suzy” to make them sound more credible and make you feel comfortable about giving up the information. Take the extra time to call the bank back or even better go down in person.
Do Not Click On Links in E-mail Messages from Financial Institutions!
This is the high tech way to get you to give your information. It is very easy to recreate the look of a company’s email or web page. If you click on one of these links it can take you to a web page that looks like the sign in page of your financial institution. After trying to sign in, the identity thieves will have both your login and password. It is much safer to go directly to the website of your bank or credit card company to access the information that you want. Often fake sites will have unusual graphics, color schemes, or misspelled words. These are signs that someone is trying to “Pharm” your information.
Identity theft costs the average victim around $5,000 and hundreds of hours of time trying to fix the damage done to their credit. Legitimate credit cards may raise your rates and even worse, you might not be able to buy that new car or qualify for a mortgage for your new home.
If you would like a copy of our credit scoring booklet or would like more tips on how to avoid credit theft, call me at (619)285-2921.
I am pleased to announce another high loan to value program that is helping more people buy San Diego homes. The Fannie Mae HomePath™ program can be used to buy foreclosed homes and condos owned by Fannie Mae. There are a few unique things about this San Diego mortgage program that no other program offers. First the new loan will not have any mortgage insurance. Even at the 97% financing level. There is no appraisal needed on the property since the sale price is considered an accepted value of the property. The best part is that there is a minimum of only 3% down on owner occupied properties and investment properties can be purchased with only 10% down. HomePath™ is a program that was made by Fannie Mae for them to be able to sell properties quickly that are already serviced and guaranteed by them. It was designed to minimize the impact of foreclosed properties on a community. The buyer of these San Diego properties is even allowed to have the 3% gifted or loaned to them for the down payment needed to buy the home. The borrower for this San Diego mortgage program must have at least a 620 credit score and the loan must be full documentation. The mortgage can be used on a condo, single family home, a planned unit development (PUD) or on multi unit properties. Second homes and investment properties can be bought with as little as 10% down; so these properties have a tendency to sell quickly.
There are only a few San Diego mortgage lenders approved as HomePath™ lenders. For more information call me at (619)285-2921 or fill out the contact form for us to give you a call.
If you are a Realtor® that would like to find out more information about being approved as a HomePath listing agent or would like some marketing material about the program you can click here for more information from Fannie Mae.