Mortgage & Financial

How to Order Free Credit Reports & Get FICO Scores

The first step in any process that involves applying for credit is to obtain a copy of your credit report. Federal laws make it easy for anyone to obtain one free copy of their credit report every 12 months. You can obtain a copy of your credit report online, safely and without risk by pasting this secure site into your browser: http://www.annualcreditreport.com.

Fee-based Credit Report Companies

Do not use suspicious companies that collect a fee from you to obtain your credit report because you might be disclosing your social security number to criminals. Make sure that you have a secure connection, like https, before submitting confidential information, and try to do business with companies you know.

Watch out for companies that pitch free reports and try to snooker you into signing up for additional services you do not want to order. The additional services offered such as notifying you if somebody accesses your credit score are definitely not free.

FICO Scores

FICO scores were developed by Fair Isaac Corporation in the late 1980s and are used today to evaluate provider risk and consumer creditworthiness for everything from borrowing money to buy a house to obtaining automobile insurance.

You can obtain your FICO score online for a small fee, but it is not free. The company will send you a credit report and scores from three credit reporting agencies. Typically lenders will throw out the top and bottom score and keep the middle score. Make sure you are receiving a genuine FICO score or NewGen score. Each credit bureau has a different name for its FICO score. Equifax is Beacon. Experian is Experian / Fair Isaac Risk Model and TransUnion is Empirica. Everything else is an imposter.

The FICO score your lender gets and the FICO score you can order yourself will most likely be two different scores, do don't expect the score you receive to match. FICO scores range from 300, which is very bad, to 850, which is the very best.

Government Plan Will Help Homeowners Avoid Foreclosure

Homeowners across the United States who are undergoing financial hardship could avoid foreclosure under a plan announced by the U.S. Treasury Department. Under the plan, which is in effect as of April 2010, millions of at-risk homeowners could be free of mortgage debt without going through foreclosure, and given $3,000 for relocation.

The Treasury plan provides incentives for lenders and homeowners to complete Short Sales – transactions in which the lender agrees to a sale price that’s less than the borrower owes on the mortgage. Short Sales are preferred to foreclosure because homeowners take less of a hit on their credit and lenders realize a smaller loss.

However, Short Sales often get bogged down because of the complicated nature of the transaction. Deals can fall through because the process takes too long.

Under the plan, which speeds up and simplifies the Short Sale process, mortgage servicers have 10 days to approve or reject a request for a Short Sale. And when the sale is done, the borrower must be fully released from the debt of the primary mortgage.

Read more details of the Treasury plan.

The plan is a positive step for the real estate market and for communities across the country, RE/MAX International CEO Margaret Kelly says. RE/MAX has been advocating simplified Short Sales for more than a year and has been actively working with U.S. government officials, including legislators and the Obama administration.

“Foreclosures have played a major role in keeping housing values down,” Kelly says. “This will help the market return to normal, stabilize prices, improve neighborhoods and prevent hundreds of thousands of homeowners from suffering the agony of being evicted from their homes. It should also play a role in the continued recovery of the economy.”

RE/MAX has been training its agents to help homeowners avoid foreclosure by offering courses on Short Sales. More than 10,000 RE/MAX Affiliates hold the Certified Distressed Properties Expert designation – over 50 percent of the total U.S. CDPE-holders – and more than 1,300 hold the Short Sales & Foreclosure Resource designation. Many other RE/MAX Associates have extensive experience with foreclosures and pre-foreclosures.

If you’ve fallen behind on your mortgage payments or received a pre-foreclosure letter from your lender, contact us!  With over 15 years of experience in foreclosure & short sale transactions, we can help.

Six Tips to Getting the Mortgage You Want

Now is the best time to purchase a home. Interest rates are at a historic low, and housing prices in many markets have adjusted to levels that have not been seen in years.

But before you start your Internet search or drive around neighborhoods looking at every house with a "For Sale" sign in the yard, you'll need some information. In particular, you'll need to know how much house you can afford and get preapproved for a mortgage.

Get Advice Seek out a trusted real estate professional first. A Realtor who's recommended by family, friends or business associates is your best bet. When asking for a recommendation, specify that you need an agent who understands your needs and circumstances and who will work within your budget.

Understand Your Income and Debt Ratios Today it's more vital than ever to consider your income and debt ratios. A good rule to follow for your monthly housing payment is principle, interest, taxes, and insurance (PITI), which should not exceed 28 percent of your total monthly gross income.

Share By knowing your optimum monthly payment and how much of your savings you want to use for a down payment, a skilled real estate agent can determine approximately how much house you can buy. Be ready to supply some basic income and debt information to your agent and be honest with the payment you feel you can realistically afford. Just because you may eventually qualify for a higher monthly payment doesn't mean you should put your family's finances in jeopardy by stretching your budget.

Ask for a Lender Recommendation Ask your real estate agent to recommend a mortgage professional who has given clients excellent service in the past. Find one who will work within your comfort level.

Be Prepared with Financial Information When you sit down with the lender, have your two most recent bank statements, pay stubs for the most recent month, and your W-2 forms and tax returns for the last two years available. The lender will run a credit check and review your income and debt information and your credit scores with you.

Plan Ahead If buying a house involves a higher payment than you're currently making in rent or mortgage payments, take the difference between the current and proposed monthly payments and put it in a separate “house” account. At the end of several months, two things will have happened: First, you'll have trained yourself to make the higher monthly payment and second, you'll have grown the savings account for your home purchase.

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