My New Blog

Picture having an extra $8,000 to furnish your home, landscape your yards, pay back money that you borrowed for your down payment, pay off debt, increase your savings, or even to do some home improvements around the house.

For a limited time, first-time homebuyers can take advantage of as much as an $8,000 tax credit. The American Recovery and Reinvestment Act of 2009 established this credit for buyers who purchase a principal residence on or after January 1, 2009 and before December 1, 2009.

The credit does not require repayment and can be claimed on a tax return to reduce the buyer's income tax liability. If the credit amount exceeds the amount of taxes owed, the excess will be refunded as a check to the buyer.

Fill out a loan application to get started. I will go over your full financial situation and I will put together a well thought out plan to help you achieve wealth from your purchase. You will learn what the bottom line is for your new investment and you will also learn how to increase equity in your property by simply adjusting your monthly cash flow. You can also call me direct to schedule a free consultation.

Due to the Mortgage Insurance (MI) companies reducing their product coverage Conventional lenders have been forced to abide to the MI’s newly revised guidelines. The following are the new changes:

For purchases of primary residences the minimum down payment required is 10% (90% LTV). The max loan amount is set to $417,000 and the minimum FICO score is 720. The Debt-to-Income (DTI) ratio must not exceed 41%. (To figure out your DTI add all your monthly debt that appears on your credit report and divide it by your monthly qualifying income.)

These recent changes make FHA financing a feasible option. Here are the advantages of FHA financing:

•  3.5% Minimum down payment
• Competitive Interest Rates
• Lower Monthly PMI Rate
• 620 Minimum FICO
• No Cash Reserves Required
• Gifts allowed
• Cosigners allowed
• Flexible Guidelines
• Home Rehabilitation Feature
• Eligible for Streamline Refinancing

For more information on these and other guideline changes call (951) 662-3389. For a mortgage planning consultation please fill out an online application or call me direct.

Here are some quick ways (in less than 30 days!):

1. Pay down your credit cards. Paying off your installment loans may can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards. The FICO model and even (from what we understand) the Vantage scoring system now used by the Big 3 weight credit card debt more heavily. Each individual card as well as your total revolving line should be below 25%. If your goal is to increase your credit score - forget about paying down your high interest rate cards first. Work on getting those balances down over higher interest rates to reap the most improvement in credit score.

2. Don't use your whole credit line every month, even if you pay your balance in full. Your available credit is averaged over your billing cycle, which is sometimes less than 30 days. If your limit is say, $5000 and you charge $5000, even if you pay it off each month, your credit balance is still going to show $2500 (a 50% usage limit), which is going to make your score plunge.

   For most small business owners, their credit cards are the way they purchase goods and supplies every month. If the card's limits are used to the hilt - this can hurt. But wait you say, these are business cards. Yes, they are and most small business owners still have to personally guarantee their business cards, which means they show up on personal credit reports. If you need to use all of the available credit line on your cards, you may want to consider getting a new card to spread out the credit lines a little.

3. Is your credit report correctly reporting your credit limits for your cards? If not, you can call your credit card issuer and ask them to update the list. You can also challenge the limits with the credit bureaus.

4. Don't use credit card issuers who don't report your credit limit. Usually this is a problem you only run into with secured credit cards, but were you aware that American Express cards and Capital One do not report credit limits? In this case the bureaus typically use your highest balance as a proxy for your credit limit, which is going to make you look like you are maxed out.

5. Ask a trusted friend or family member to add you to one of their old cards as an authorized user, maybe one that hasn't been used in awhile. The older your credit history, the better. If your mother agrees to put you as an authorized user on a card that she; had for 20 years, you could see your score increase dramatically. And with the authorized user plan, you don't even have to have the card in your possession if "Mom" feels better about this plan. (You'll have to work things out with her on this).

6. If you've been a good customer for years, but had a rough patch and missed a payment - you might be able to ask your creditor to "erase" a negative listing. You can do this with a goodwill letter. There is no guarantee that a lender will do this, but this method has had lots of success. Contact me for a FREE sample letter.

7. If you have a student loan that you have defaulted on or have missed payments, you can enter into a "rehab program" which will get your account back on track after 12 months (ok, so it's not a short-term strategy.) Sallie Mae regularly upgrades your loan status to "Paid as Agreed" if you make a series of 12 or so on-time payments.

8. Dispute old negatives. Say your insurance company never paid a medical bill and now you have a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't have bothered to update good ole eOscar with the correct info and the credit bureau won't be able to match up computer records.

9. Get a collection agency to agree to remove a debt from your report if you pay it. This method is called "pay for delete" and it works like a charm on smaller amounts of $500 and under, especially medical collections. Remember to get the agreement in writing before you pay them anything, and only send a money order after you get them to agree. Check here for more info on settling debts.

10. Disputing with original creditors really works, especially accounts which have been purchased by other banks or are currently with a bank who has gone through some of those massive mergers in the last 10 years. And you have the cases (more common than you think) where some banks just don't keep good records at all. This method is relatively quick.

11. Target "easy" errors on your credit report that have a bang for the buck.

    • Negatives that truly are not yours: Late payments, charge-offs, collections
    • Any Accounts listed anything other than "current" or "paid as agreed" if you paid on time and in full.
    • Accounts that are still listed as unpaid that were included in a bankruptcy.
    • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
    • Any account that is listed as "Closed by the credit grantor" when it wasn't should be fixed as this is definitely a negative

If you'll notice the first 3 items concerned paying down credit balances. This is for a reason - high credit balances can kill the credit score of someone who otherwise has perfect credit. It is weighted HEAVILY in your credit score. Get those balances down!