Ask Val

April 4, 2011

Three Major Credit Reporting Bureaus

When applying for a mortgage whether it be for purchase or refinance a tri-merge credit report is pulled for an evaluation of the clients current and past credit history.

The three bureaus are Equifax, Experian and TransUnion.

Depending on the creditor they many report to one or all bureaus.  Credit scores can vary between agencies so to qualify for financing I will work off your middle credit score to determine your rate.

It is a great idea to get a credit analysis at least once a year.  In doing so you can keep on top of your credit report and quickly take care of any discrepancies.

The bureau information is as follows:

Experian Consumer Relations, 888-397-3742,  P O Box 2002, Allen, TX  75013  www.experian.com

Equifax Consumer Relations, 800-685-1111, P O Box 740241, Atlanta, GA  30374-0193 www.equifax.com

TransUnion Consumer Relations, 800-888-4213, P O Box 1000, Chester, PA  19022 www.transunion.com

The above addresses would be where disputes are mailed to the individual bureau.  I suggest dispute be sent certified mail return receipt requested.  Credit bureau has 30 days to investigate and then derogatory is either confirmed or removed.

If you need a free credit analysis in the Birmingham, AL area, please contact Valerie Springer .  I would be honored to help you with your financing needs.

Yours to Count On,

Valerie Springer

February 2, 2011

Shopping for Mortgage Rate & Closing Costs ~ Properly

Selecting a residential loan officer and banker may be the most important financial decision you will ever make.    Most mortgages are made for large sums of money.  This is something you think about only a few times in your life but I think about it every single day.

When most people think about “shopping”  to find the best rate, they will get on the phone and over the course of a few days call several different mortgage companies and ask “What is your rate and how much is your closing costs?”

May sound like a smart question to the consumer but to the  industry professional is one of the most “gullible” questions that can be asked.  You have immediately let the person on the other end of the phone know you are trying to play in the Major League and your athletic ability is keeping you in Dixie Youth.  

The first question a consumer should ask is, “What moves rates?”  If the loan officer cannot answer that question then you are talking to someone who is only trained to take your information and put you into the same mold as every other consumer.  At this point I would ask myself.. .

How can my loan officer guide me on the best time to lock my rate due to market conditions? 

How can I trust they really know what they are doing? 

Do I just take what they quoted me over the phone? 

How do I know they quoted me the best rate, is it because the other guy said his rate was higher? 

Is that really all there is to it? 

WOW, could these few questions have stopped the whole industry breakdown…That was easy! 

REALLY???  Could you possibly believe you received the best on any account? 

Interest rates move all throughout the day, sometimes we will have a reprice up to 3-4 times daily,  in volatile markets.  The only way a consumer can know for sure they are getting the best rate is to get a quote at the exact same time from multiple lenders and then the voice on the other end of the phone can tell you anything they think you want to hear because the rate is not locked until the rate is locked.   Ever heard of bait and switch?  If you are going to shop you better be ready to do a lot of leg work.

Closing costs, fees and discount points is another area of confusion to the consumer. 

To fully understand closing costs,most would need to sit down with three  good faith estimates and compare them line for line with a knowledgable loan officer or real estate attorney to explain which fees will not change on any of the three, and point out the rest  of the fees are three different opinions and the bottom line is the bottom line no matter who does the financing.

The fees in the 800’s section will not change, every other fee listed is an estimate, someone’s opinion.  Some lenders will estimate low to make sure the bottom line number reflects a greater savings.  Personally I over estimate everything because if you are happy with worse case scenario you will be thrilled the day we sit at the closing table. 

I will be with you at the closing table to make sure everything is as it should be and if you have a surprise it will be a positive one.  I have never had a client leave the closing table mad or upset with me or my estimates.  Most are very pleasantly surprised to pay less than they were prepared to spend. 

Over the last 10 years I have had a few clients who left to go to another lender because they “thought” they were getting less closing costs.  Some have even called me back after closing and apologized as their closing costs wound up being the same or more than what I had originally prepared.  These have been some of my best referral sources over the years and have come to  me for subsequent refinances and purchases.

There is much to do in today’s market to do a pre-approval on someone.  Money spent to pull a credit report and hours of paperwork and phone conversations.  Many in our industry are 100% commission so please ask these questions up front and find trust in someone before the work is done.

On one of your largest financial transactions ever, are you looking for bargain basement and all that implies or integrity, knowledge and service? 

If you need a residential mortgage in Alabama, Valerie Springer is waiting for your call.

205-995-7283 x 305

NO ONE CARES HOW MUCH YOU KNOW UNTIL THEY KNOW HOW MUCH YOU CARE

Yours to Count On,

Valerie Springer

 

 

October 21, 2010

Bankruptcy and Foreclosure With FHA

In today’s market, I receive many phone calls from people who have either had to file bankruptcy or had a foreclosure.  These come from all walks of life…those who made unwise financial decisions to those who are in this position through no fault of their own.  Either way, folks are hungry for guidance and information.

In this post I am going to talk about FHA guidelines and what they have to say about the two big NO-NO’s.

As far as Foreclosure, a borrower in most circumstances is not eligible for three years after principal residence or other real property was foreclosed or deed-in-lieu was given.  However, the lender may grant an exception to the 3 year period if the foreclosure was the result of documented extenuating circumstance beyond the control of the borrower.  This could include a serious illness or death of a wage earner, and the borrower has established good credit since the foreclosure.  Divorce is not considered an extenuating circumstance BUT if a borrower whose loan was current at the time of a divorce in which the ex-spouse received the property and the loan was later foreclosed does qualify as an exception.  The inability to sell a property due to a job transfer or relocation to another area does not qualify as an extenuating circumstance.

Now to address bankruptcy, if at least two years have passed since the date of discharge (Chapter 7) and the borrower has reestablished good credit or chosen not to incur new debt, in most situations would qualify for FHA insured mortgage.  Possibly less than two years but not less than 12 months may be approved if the borrower can show the BK was caused by extenuating circumstances beyond his/her control and has since shown a documented ability to manage their financial affairs in a responsible manner.  The lender must document that the borrower’s current situation indicates that the events that led to the bankruptcy are not likely to recur.

(Chapter 13) is a little different since this is a BK overtime.  If the lender can document that one year of payout under the bk has elapsed and payment performance has been satisfactory and all payments have been made on time, then the borrower may be eligible.  The borrower MUST have written permission from the courts to enter into this transaction.  We must be able to show two years from the discharge date of  Chapter 13 BK.  If the Chapter 13 BK has not been discharged for a minimum of 2 years, the loan must be downgraded to a manual underwrite.

www.vshomeloans.com

valerie.springer@nflp.com

If you need a home mortgage financing, Valerie Springer is your expert loan officer.

Yours to Count On,

Valerie Springer

July 12, 2010

Credit Bureaus ~ Equifax, Experian and Trans Union

Filed under: ASK VAL,Credit — Valerie Springer @ 4:05 pm
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Credit is a scary word for many folks.  Credit is something that is  relatively baffling to most.  Common sense is completely out the window when it comes to figuring out the process.  I will give you some tips occasionally to help you have a better understanding.

1. Did you know if you close accounts it could drop your credit score?  2. If you open accounts too close together it could drop your score?  3. If you charge all purchases on a credit card and pay it off monthly it could hurt your score?  I will answer these three questions in this post.

1.  If you close accounts it could drop your credit score…The credit bureau is looking at how much credit you have available to you as opposed to how much you have used.  In addition to how long you have had a credit line.  For Example:  You have a credit card that carries a $10,000.00 credit limit, you have had this since 1995.  You pay the card off and close the account.  Your credit score will probably drop because you have just lost $10k of available credit and closed an account you have had opened for 15 years.  The utilization of credit cards will pump your scores up faster than any other category because “YOU” control revolving accounts.

2.  If you open too many accounts close together it could drop your score…yes this is true.  When someone starts applying for credit in succession it sends a signal to the bureau there may be a problem.  For example:  Someone inquires about approval for a home purchase to see if they qualify, then they go to the car dealership and apply for credit to get a vehicle.  On the way home they stop by a department store and find a great sale and the store clerk asks if they would like to save 20% on their entire purchase.  These are three credit inquiries very close together and it makes creditors very nervous.   All of the sudden you trying to accumulate much debt on paper whether you buy anything or not.   These purchases or applications for credit need to be spread far apart.  If you are considering purchasing a home you should never make a large purchase before the home transaction.  Auto dealers may pull your credit multiple times which in itself  can make your score drop.  Beware around the holidays when everyone wants to save and are tempted to apply for every credit card out there, your scores WILL drop.

3.  Can my credit scores drop if I pay my card off every month…Yes they can.  If you have one credit card with a $10k credit limit and each month you charge all of your household expenses and then pay off at the end of the month, all the credit bureaus know is you are maxed out on your limit.  For Example  The creditor does not report to the bureaus you pay off each month they only show you pay on time.  While your credit standing with this company may be excellent it does not seem so with the bureaus.  Also, this will affect your debt to income ratio when applying for mortgage.  We must use your minimum monthly payment to qualify you.  There are a few ways to make this work to your favor  (a.)  If you normally charge $10k per month and your credit limit is $10k, ask your creditor to raise you credit limit to $20k, this at least keeps you at the 50% utilization.  If this is not an option  (b.) put your purchases on separate credit cards.  It is okay to use credit cards just keep the balance low as possible even if you plan to pay it off in the future remember they are looking at how much you have used as opposed to how much is available.

Please visit my website www.vshomeloans.com    I would love to help you with your residential financing needs. 

Valerie Springer     NMLS  198479

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