Monday, October 29, 2007


Have you ever played "the phone game"? You know where one person tells someone something and then that person passes along what they "thought" they heard and so on until it reaches the last person who has to tell the group what was said to begin with and it is always something so different than what was actually said. Sometimes, alot of times, when you are talking to a credit professional or mortgage specialist it seems like this happens and you wonder how things could get so messed up. It is so important to tell everything about your situation as correctly as possible, because most all of your info has to be verified and clarified. It seems the mortgage banking industry is all about making sure everything everyone has said is exactly true to the best of every one's knowledge. All this verifying and clarifying makes the process to obtain credit or a mortgage loan seem that much more difficult.

So to make things easier on yourself and everyone else of interest be sure you gather up all your information and or documents to make your credit experience more pleasant than some. It's all about COMMUNICATION.

Remember: Communication is the key to everything!

Sunday, October 28, 2007

Why good credit is good

Good credit is like money in your pocket. Even if you have no credit and lots of money this is still not good. The lending industry these days view someones credit history as a gauge for how they might repay a loan. If you have no credit there is no way to know if someone actually pays their bills and on time. Sometimes you can provide what is called alternative credit to show how you pay your bills, ie; utilities, car insurance, rent/housing, etc; In today's times lender's are more apprehensive in lending when there is no history of repayment unless you put down a good amount of money which in most lender's eyes says you won't walk away at the risk of losing all that money, just as if you threw it out the window. There are many things you can do to improve your credit when it is tarnished. Some people think once they have the bad credit there is nothing to do about it.
I have been in the Mortgage business 24 yrs. and my credit is not what it should be. However, I have been a single Mom for many years and that does sometimes put many extra strains on how we dole out our money in order to continue with daily life. I have struggled and still do with tarnished credit against me. I am working to get it cleared up, but it does take time and diligence everyday. I have found that most of us like to spend, spend, spend. I have not really done a lot of spending, but I have made stupid choices in what I may have spent money on and thus the snowball effect takes place. I know many people in my position that only have themselves to borrow from and in the end that costs us much more money than we ever intended. I believe that good money skills should be taught when you are a child and I know I wasn't. My Parents struggled when my Brother and I were young and eventually they got it all straightened out and got through it. I watched this and both my Brother and I have continued to have money issues, rough credit and no savings. I am now a homeowner and have started saving with a small savings account and through a 401K at work. If you really think about it, the cost of a pizza meal delivered is what you could put in a savings account a month. If that's all you can do for now, that is a great start. It is never too late or too little. I have 2 boys and I am trying to instill good spending and saving habits and it is still difficult to do. My oldest is 23 and works now for 15 mos. and keeping a job was the most important part first, now it is about saving and not spending. My other son is 15 and of course likes to spend money he doesn't have. I am working on that as well.
So my whole point is that you may hear out in the world that you must save so much and if you don't start when you are an infant you will never have any retirement, all this negativity, anyway, you can do whatever you want as long as you continue to think positive and make positive changes, large or small. You can do it. So today start writing down how you can improve your whole financial picture without taking food off your table or doing without. Try brown bagging your lunches more, making meals at home more. None of this will kill anyone, it is what our families did and we need to stay away from the fast food life as much as possible, so much more expensive yet people today have gotten caught up in the fast lane of life and forget really how to live. So start today to show yourself how you can begin to improve your credit quality and become a homeowner someday yourself or buy that new car that you need and learn to change your spending habits. All of this is just about 3-6 mos away if you really put your mind to it.

Remember: Make good choices.

To buy or not to buy

I know you really want to buy that dream home you have always thought of. It is not always the best choice for you at the time. So you find a Real Estate Agent to show you homes. You know what you think you can afford based on the current rent you pay or not if living "rent free" with family. So you see several homes the agent picked and none really light your fire, so the agent takes you to others they are a higher sales price and of course you love them and you found one that you must have. Great! Now you are wondering if you really can afford this wonderful home and the agent tells you that on paper, YES you qualify. Another GREAT! So now you have bought your home and now your gutters have all fallen off and you don't have the money to replace or your washer has flooded in your home and your carpet needs to be replaced. In the meantime of checking with your homeowners insurance agent and/or your home warranty company you have to make spend money for the carpet or to go to the laundry mat or so on. These are all extra expenses you did not account for at the most jubilant time of your life. Buying a home is one of the biggest events to happen and the biggest purchase you will make. So being prepared definitely helps.
To qualify for the home with no money you can chose to use one of the down payment assistance programs(DPA) that is currently offered for FHA insured properties. The Seller of the home you like agrees to participate in the DPA program and this required 3% down payment is included in the sales price, therefore increasing your loan amount and house payment, but you don't have to put any money of your own into the transaction and you don't really have any money to anyway so you like this idea.
At this time FHA is looking to add tougher credit restrictions to allow the use of the DPA gift, which is good. Most people today need to really take a long hard look at their current credit picture and write how much money comes into the household and how much goes out to know how much y0u can start saving. In order to buy a home you should really have 6 months mortgage payments saved in the bank. You never know when you will need that money. Owning a home adds a lot of new responsibility to your life now.
Real Estate Agents want to make the sale to gain the commission and don't always tell you all the pitfalls to becoming a first time homeowner. There are a handful that will help counsel you, but it is always best if you do your research before you start looking. Once you start looking and see something you like you usually can't say no. So be prepared. You will sleep easier at night knowing you CAN afford your home and you were prepared.

Today is the best time to start saving, planning and preparing.

Remember: The harder you work the luckier you get