St. Louis Real Estate – Your Credit Score

Filed under: For Buyers

If you’ve had your head in the sand about dealing with your credit, now is the time to stand and face the music.  More than ever in recent years, it is imperativethat you manage your credit history and credit scores attentively and responsibly.  Today, a 700 is the same as 640 used to be.  Remember, that is your MID score requirement, not the high score.  It’s necessary to collect all three for an accurate assessment.  As it stands, nearly all lenders require a minimum of 620 for conventional loans and a minimum of 580 for government loans like FHA and VA.  And the bar keeps raising as we go. Here is just a snapshot to get you started and if that’s not enough, join us for a webinar with Credit Resolution Guru, Ron Marchiani Wednesday, October 22nd at 6:00pm.  Details are at bottom. 

Facing the Music – Find Out What’s in the Report

• The three major credit “repositories” (bureaus) are Equifax, Experian and Trans Union Corp.
• Requesting a report from each should cover your complete credit history (reports can be requested online: www.equifax.com , www.experian.com , www.transunion.com ).
• You are entitled to one free credit report per year.

Don’t Take Their Word for it – See if Somebody Goofed

• Most financial information, such as a credit card payment history, is sent directly from creditors’ computers to the three repositories’ computers.
• Data transfer still involves human input, including information gathered from courthouse files, for example.
• Simple recording errors or mistaken identities could result in a mistake on the credit report.

Be a Vigilante – Request Corrections

• Credit bureaus are obligated to investigate complaints and correct errors.
• Consumer vigilance is important, nonetheless, because the bureaus are not as diligent as we would hope.

Start Doing the Dance – Get Ready to BUY or REFINANCE!

• Do things to offset your credit if it’s less than ideal.
• Opt out of credit card offers at 888-5-OPTOUT – this will raise your score.
• STOP making inquiries or allowing anyone else to make inquiries 60 days before you are ready to buy.
• Make sure your Mortgage Broker is not running the credit over and over.
• Don’t be late on payments – one month can cost you down the road!!
• Pay off all recent small collections – especially medical and utilities (let the old ones sit or you could reactivate a dormant account and actually hurt your credit more).
• Start putting money in the bank – 100% financing is no longer available, although FHA still allows 97% and many 95% loans.
• Build good credit while you’re working on resolving old credit issues.
• Pay down high balance credit cards (your debt to credit ratio should not exceed 40%).
• DON’T cancel all your credit cards. Keep the three or four oldest ones and maintain good payment histories and low balances to continue good credit reporting activity.

Plan for your Future – Get the Right Home Mortgage

Count on your Personal Mortgage Professional for smart financing options and the expertise to help you achieve your goals.  Your home mortgage should be part of your overall financial planning picture, not just something you do “for now”.

Don’t Procrastinate – Call your Personal Mortgage Professional EARLY in the process to:

• Buy a new home.
• Refinance your home to pay off high interest debt, make improvements.
• Eliminate Private Mortgage Insurance (PMI) and increase monthly cash flow!

For more indepth information, some great overview booklets can be found here:

http://www.myfico.com/crediteducation/brochures

http://www.consumerfed.org/topics.cfm?section=Finance&Topic=Credit%20Scores%20and%20Reporting 

If you’d like to join us and learn more about your credit, how to evaluate it and how to improve it, please join us.

Date: Wednesday, October 22, 2008
Time: 6:00 pm, Central Daylight Time (Special Realtors ONLY Session begins at 5:30pm)
Meeting Number: 615 784 337
Meeting Password: credit

Please click the link below to see more information, or to join the meeting.
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To join the online meeting (you must be in front of your computer)
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1. Go to https://meetings.webex.com/meetings/j.php?ED=5638742&UID=0
2. Enter your name and email address.
3. Enter the meeting password: credit
4. Click “Join”.
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To join the teleconference only
——————————————————-
Call-in number (US/Canada): 1-650-429-3300
Toll-free dialing restrictions: http://www.webex.com/pdf/tollfree_restrictions.pdf
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For assistance go to http://www.webex.com/go/ppusupport
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WHAT DO YOU THINK? TAKE OUR POLL.

Do you think the mortgage lender is getting TOO strict on credit now?
( polls)

Posted by Art Wagner   |   Read More   |   Your Comments Are Welcome!   |   10.21.2008

St. Louis Real Estate – Building Inspection – Termites

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

TERMITE INSPECTIONS FOR REAL ESTATE TRANSACTIONS by Harry Morrell, Allied Building Inspections LLC

A full building inspection for a house involved in a Real Estate transaction does not necessarily mean that a termite inspection is included. Inspectors must have a special license in the state of Missouri to inspect for termites. It is true that inspectors will call out wood structural components that have been damaged by termites, whether the damage is significant or just minor. However, observing and reporting termite presence will not generally occur if a full termite inspection is not included with the building inspection. Keep mind that when a buyer orders and schedules an inspection for a house they bought, their inspector will deliver them a report describing the conditions of the major structural and mechanical components of the house only. Read the rest of this entry »

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   08.11.2008

St. Louis Mortgage News – Housing Assistance Tax Act of 2008 pt 2

Filed under: First Time Home Buyer, For Buyers, Relocation Buyer

Credit for First-Time Home-buyers by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

The single largest provision in the Housing Act is a measure allowing taxpayers buying their first home to take a tax credit of up to $7,500 of the purchase price. Qualified home-buyers can subtract the credit amount from their federal income tax when they buy a home and even get a refund if the credit exceeds their tax. However, they are then required to pay the credit back over fifteen years. The result is that the credit resembles an interest-free loan that must be repaid to the government.

Here are the details of the new credit:

• The home must be located in the United States and must be the taxpayer’s principal residence. The taxpayer (and the taxpayer’s spouse if married) must not have owned another principal residence in the United States in the three-year period before purchasing the new home. Accordingly, the home does not literally have to be the taxpayer’s first home ever purchased in the United States.
• The home must be purchased between April 9, 2008 and June 30, 2009. Purchases from certain related persons and acquisitions by gift or inheritance do not qualify. A home constructed by the taxpayer does qualify if the taxpayer moves in between April 9, 2008 and June 30, 2009.
• There is also a special rule that allows taxpayers who purchase a qualifying principal residence in the first six months of 2009 to treat the purchase as if made on December 31, 2008. This allows the credit to be claimed on the taxpayer’s 2008 taxes rather than waiting to claim it on the taxpayer’s 2009 taxes.
• The credit is equal to ten percent of the price paid for the home, up to a maximum of $7,500. The $7,500 maximum credit applies both to individuals and married couples filing a joint return. A married individual filing separately can only claim a maximum credit of $3,750.
• The credit is phased out for individual taxpayers with modified adjusted gross income (AGI) between $75,000 and $95,000 ($150,000 and $170,000 for joint filers) for the year of purchase. Taxpayers with modified AGI over $95,000 ($170,000 for joint filers) can’t claim the credit at all.
• The credit is refundable, which means that households with incomes too low to owe any income tax can still benefit as the excess credit available after applying to any income taxes will be refunded to the taxpayer.
• In the second year after purchase (note that the payback doesn’t immediately start in the subsequent tax year), taxpayers who took the credit must start paying back the credit in equal interest-free installments over fifteen years. For example, suppose a first-time home-buyer purchases a home for $100,000 in December 2008 and claims the maximum credit of $7,500 on his 2008 tax return. He would then be required to pay back $500 (one-fifteenth of the credit) on his tax return for 2010 and for each subsequent return for the following fourteen years, finishing in 2024.
• If the taxpayer sells the home (or the home ceases to be the principal residence of the taxpayer or the taxpayer’s spouse) before the complete repayment of the credit, any remaining credit is due on the tax return for the year in which the home is sold (or ceases to be the principal residence). If the home was sold at a loss to an unrelated person, repayment of the remaining credit is forgiven to the extent of the loss.
• No credit is allowed if certain conditions exist: the taxpayer was ever entitled to a District of Columbia homebuyer credit, the home purchase was financed through tax-exempt mortgage revenue bonds, the taxpayer is a nonresident alien, or the taxpayer disposes of the residence (or it ceases to be a principal residence) in the same year as it was purchased.

For a chart of the tax credit information, click here 

 For Questions or Comments, please contact Chris Scheer chrisscheer@stlouisrealestatevoice.com  

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   08.05.2008

St. Louis Mortgage News – Housing Assistance Tax Act of 2008

Filed under: First Time Home Buyer, For Buyers, Mortgage News, Relocation Buyer

On July 30, 2008, President Bush signed into law the “Housing Assistance Tax Act of 2008” (the Housing Act).  It includes a $15.1 billion package of housing tax incentives.
 
Here are the highlights of the bill for homeowners and first time home buyers.by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

Part One

Property Tax Deductions for Non-Itemizers

The Housing Act created a new, temporary property tax deduction for non-itemizers (i.e., for taxpayers who claim the standard deduction rather than itemizing their deductions).

Highlights include:

• The provision creates a new standard deduction for state and local real property taxes paid by non-itemizers. Since most homeowners who are paying on a mortgage have enough deductions (e.g., mortgage interest and property taxes) to justify itemizing them on their return, this new provision chiefly benefits homeowners who have paid off their homes.

• The deduction is currently only available for tax years that begin in 2008.

• The amount of deduction will be as much as $500 for single filers and $1,000 for joint filers. Since this is a deduction and not a credit (i.e., a dollar-for-dollar reduction in tax liability) the actual tax benefit will not be all that substantial.  For example, it only proves a maximum of $100 to a couple in the ten percent tax bracket and $150 to a couple in the fifteen percent bracket (and only $50 and $75, respectively, to singles in those brackets).  Granted, in this economy every little bit helps.

Part Two

Credit for First-Time Homebuyers (to be continued)

 Chris Scheer can be reached at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   08.04.2008

St. Louis Mortgage News – 2008 B Rates

Filed under: For Buyers, Mortgage News

Here we go! by Chris Scheer, Cornerstone Mortgage, O’Fallon MO

It is actually going to happen! 
The new rates for the 2008B are as follows:

CAL for Government loans 6.9%

NON CAL for Government loans 6.45%

CAL for Conventional loans 7.3%

NON CAL for Conventional loans 6.85%

The window for reservations will open at 8 am on Monday August 4th.  As soon as you have a confirmed reservation you may close loans.  All loans in this bond issue will be sold to the new master servicer US Bank.  Training with the master servicer will start on Tuesday August 5th in Columbia and on Wednesday August 6th in St. Louis.  I will go over the changes to the program in depth at the training but I will state the changes briefly in this email.

Rates
As you can see we will have 4 rates instead of 2 due to the conventional market.  Only Fannie Mae’s My Community Mortgage or Freddie Macs Home Possible programs can be used with this bond issue. There will be no charge of 1.25% for LLP and adverse market fee in this issue only.  However, there will have to be a $175 servicing fee charged to the borrower for the all CAL loans.

Down payment Assistance
As you can see I have changed the acronym from CAP to CAL.  This stands for Cash Assistance Loan and will help differentiate between the two programs.  The assistance will still be 3% of the loan amount but it will be in the form of a soft second mortgage that will be forgiven over a 5 year period.  The loan will actually diminish 1/60 per month over the 5 year period.  The borrower will then be given a 1099 every year for the amount that was forgiven that year and will have to claim that as income on the federal tax return.  If the borrower sells or refinances the loan in the first five years the remainder of the amount will have to be paid back. We have been discussing the just-enacted housing stimulus bill with FHA staff and they told us today that the just-enacted housing bill does not impose a 100% CLTV cap on FHA loans.  It imposes a 100% LTV cap on the FHA-insured first mortgage and requires the FHA mortgage insurance premium to be counted toward the LTV ratio for purposes of the 100% cap. HUD will continue to allow second liens from state housing agencies that result in CLTVs that exceed 100%.

Chris Scheer can be reached at chrisscheer@stlouisrealestatevocie.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   08.03.2008

St. Louis Mortgage News – What Was I Thinking

Filed under: For Buyers, Mortgage News

What was I thinking? by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

The wonderful thing about interest rates is that you never can truly predict what direction they are heading in.  For those of you that read my last post about rates going down, you at this point think I am a complete fool!  At some level you might be right; however the same pressures that existed when I wrote that article are still there.  They just have had some short term relief and the usual unpredictable influences that occur from time to time affect them.  Let’s talk about where we were, where we went and where we are now?

Two weeks ago today our 30 year fixed on a conventional loan was about 6.75%.  It was then that I started the article on rates dropping.  Throughout that week the rates started to fall, so much that on Friday morning of that week I locked in a purchase at 6.125% on a 30 year loan.  Around 1:00 that day it was announced that the Fed was stepping in and taking over Indy Mac bank. At that point our rates jumped up to 6.375%. 

The following Monday the market remained calm, and rates did not move.  Then on Tuesday oil prices started to drop and over the next two days oil fell over $10 a barrel.  All of a sudden Wall Street showed improvement in stock prices and the 6 week slide was halted.  That meant that money was flowing back into stocks and out of bonds.  Remember your economic lessons of previous posts, when the demand goes down the price goes down.  On bonds when the price goes down the yield (interest rate) goes up.  So by Friday of last week we were back to 6.75% on a 30 year loan. 

As we start the week, we have oil starting to climb again and one of our two Presidential Candidates trying to move troops to Afghanistan to fight the War on Terror.  As long as we are fighting Wars, we are going to have challenges controlling our markets.  These wars are costing us BILLIONS and we are paying for that with borrowed money.  Sooner or later that will have a negative effect on our economy and we will see rates come down.

For questions or comments about this please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, St.+Louis+Mortgage+News, Indy+Mac

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   07.23.2008

St. Louis Mortgage News – The View From 30,000 Feet

Filed under: For Buyers, For Sellers

St. Louis Real Estate Voice guest editor Chris Scheer takes a look back at the past 12 months of the mortgage industry and a hopeful look forward.

As a buyer, seller, or investor, how do you feel about the mortgage mess and how has it affected your home purchase plans? . . . what’s the view from street level?

What a difference a day makes! by Chris Scheer, Cornerstone Mortgage, O’Fallon MO

Over the past 11 months the mortgage industry has gone through one of the most tumultuous times in recent history.  As mortgage companies went out of business, others were rescued by the Federal Reserve and program guidelines changed like your mother told you to change your underwear; DAILY.  Many people, loan officers included were caught not being up to date on the ever changing landscape of guideline changes.  I can admit I had challenges with 2 condo loans in particular. 

In addition to the ever changing landscape of product and guideline changes we have also seen a rate climate that reminds me of a playground toy, the sliding teeter totter!  Rates go up one day, down the next, up again then up and up and then a drastic drop followed by more upward movement.  I continue to preach to my clients, that locking in is the best defense in the current market.  We can always look to renegotiate if rates go down drastically but, once they go up you are screwed.  As my old mentor told me, “pigs get fat, hogs get slaughtered.

Let’s hope that the reforms FHA has instituted effective July 14, 2008 and the merger of Countrywide and Bank of America signal a change to the whirlwind of changes and the rest of the year is filled with calm waters for borrowers to sail in.

For questions or comments on this post, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Mortgage, St.+Louis+Real+Estate, Buyers, Sellers, Investors, FHA, Countrywide+Mortgage, Bank+of+America

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   07.05.2008

St. Louis Real Estate – Mortgage News – FHA takes the gloves off

Filed under: First Time Home Buyer, For Buyers, For Sellers

FHA Lifts 90 Waiting Period by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

In a move to help get foreclosures off the books of lenders quicker and help avoid deterioration of properties that have been foreclosed upon the Department of Housing and Urban Development has lifted their ban on writing a contract if the title has changed in the past 90 days. 

See the following article: FHA Lifts Waiting Period, Extends Insurance Coverage

For further clarification you can visit HUD’s website.

For questions or comments please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   06.18.2008