Ok 1st Time Homebuyers, you have decided you want to buy a home.  Do you know what your credit score is? Most people know that they have a credit score, that magic number that lenders rely on to determine whether or not to extend credit, but don’t really understand what a credit score is, what factors influence their credit score, or how their credit score is calculated. Here is a basic primer on what credit scoring is, how it works, and some tips on improving your score.

 

What Is a Credit Score?

In short, credit scoring is a system many lenders use to determine how likely you are to pay back the money they lend to you. Your credit score is a snapshot of your credit risk at a particular point in time. The higher your credit score, the more likely you are to repay your debts on time, and the more likely you are to receive credit on favorable terms.

How Is a Credit Score Calculated?

The most widely used credit scores are based on the Fair Isaac & Co. (FICO) credit scoring model. FICO develops credit scores based solely on information contained in credit reports; it compares the information contained in a consumer’s credit report to the patterns of information contained in thousands of other credit reports, and calculates a credit score that predicts the level of future credit risk for a particular consumer. While FICO is the most well known type of credit score, it’s not the only one out there – some check approval services also develop risk models and scoring that are based on check writing patterns in order to predict the risk of a particular check being returned. You may also have more than one FICO score as each of the three major credit reporting agencies collect and report information in slightly different ways; since your credit score from each agency only uses the information contained in that agency’s report, it’s possible to have three different scores.

What Factors Influence the Credit Score?

Your credit score takes all factors into consideration; no one piece of information or one factor will determine your score, although some factors are weighted more heavily than others.

-Payment History – Your payment history determines approximately 35% of your total credit score. This factor looks at whether you pay your bills on time, or late. If they’re late, how late are they? How often do you pay late? How recent are your late payments? How many accounts show no late payments? Have you had accounts turned over to collection or a judgment entered against you? Have you filed for Bankruptcy?

-Amount Owed – How much you currently owe determines approximately 30% of your total credit score. This factor looks at the total amount you owe, and on what types of accounts. How many accounts have balances? How much of the total credit line is owed? How much is owed now in relation to how much you borrowed originally (i.e. for auto loans)?

-Length of Credit History – The length of your credit history determines approximately 15% of your total credit score. In general, a longer credit history will increase your score. This factor also looks at how long you’ve had certain credit accounts, and how long it’s been since you used certain accounts.

-New Credit – Approximately 10% of your credit score is based on how many new accounts you’ve established. This factor looks at how many new accounts you have, how long it’s been since you opened them, how many recent requests for credit you have made, and the length of time since credit report inquiries were made by potential lenders. Rate shopping should not affect this factor because the inquiries will be made for a particular type of credit during a short period of time.

-Overall Credit Mix – Approximately 10% of your credit score is based on the overall mix of credit cares, installment loans, mortgage loans, etc. The more balanced the mix, the more likely this factor is to improve your overall score.

Improving Your Credit Score

There are several things you can do to improve your credit score, both in the short term and over time.

-Pay your bills on time.

-Pay down your debt.

-Check your credit report and correct any inaccurate items.

-Limit how frequently you apply for new credit and how much you charge on existing credit.

-Don’t close old accounts – this can shorten the length of your reported credit history.

Jeff Harris
Senior Credit Consultant
TowneBank Mortgage
Jeff.Harris@hpw.com

 

1st Time Homebuyers?  Looking for more information on buying a home?  Coldwell Banker Howard Perry and Walston associates are committed to being your real estate Trusted Advisors.  Please check out the following information created especially for our 1st Time Homebuyers! Click here.

       

I was talking on the phone with one of our wonderful real estate associates on Friday.  She was telling me the story of their pre-qualified 1st Time Homebuyer client and how they had just made an offer on a 4th home.  Why make offers on 4 different homes?  The client had a particular price point she could afford and an area she wanted to live in. However, she was pre-qualified for an attractive amount and she didn’t have any out of the ordinary requests.  But she did have competition from other 1st Time Homebuyers.  Hmm.  This was interesting.  The agent (and client) were waiting with baited breath to see if the offer they had just made had been accepted. The agent said “Our client has to get this home, it is made for her.  I could tell it was for her the moment we walked in the door.’

 

 

It really got me thinking.  Yes, there are over 150 days left to take advantage of the $8000 1st Time Homebuyer tax credit.  Looking at that number, I can easily see how many 1st Time Homebuyers may think ‘Oh, I have all of the time in the world to start my home search.  I still have time. I don’t need to worry about it this weekend.’  That isn’t the case.

 

 

Attention 1st Time Homebuyers, there is no time to waste!  You need to start your home searches TODAY! 

 

 

Getting pre-qualified for a home, finding the home of your dreams, making an offer on that home, having that offer accepted, getting an appraisal on that home, getting your mortgage approved and then closing- all takes time!

 

 

In today’s market, we are seeing around 40% of transactions coming from 1st Time Homebuyers.  Great news, yes!  However, it does mean there could be more competition for the price points that most 1st Time Homebuyers are interested in.  I think the media has presented a picture that it is a buyer’s market.  Yes, I can see and agree with that in some areas.  However, in the 1st Time Homebuyer market, I believe it is both a buyer AND seller market.  There are more 1st Time Homebuyers competing for great homes in their price point.  Our client above didn’t have any outlandish requests, she was simply competing with other 1st Time Homebuyers for homes.

 

 

‘Well, I am waiting for the $15,000 tax credit.’ Ahh, yes.  The discussion of the $15,000 tax credit.  The additional tax credit is only in initial phases of discussion and may or may not be passed by the US Government.  Yes, if the $15,000 tax credit is approved for 2010 that is wonderful news for buyers and the real estate industry.  However, this is your home we are talking about.  When you find the home that is meant to be yours, that feels like you when you walk in the door, that you can see yourself growing in….Do you really want to take a chance that $7,000 more in tax credits MAY be passed?  No.  When it comes to your home, one of the most important investments you will make in your life, a place where you will spend most of the hours in your day and make your memories, trying to time the market is not worth it.  Anyone who tells you it is, is WRONG.

 

 

Mortgage rates are still at historic lows.  Are they ebbing and flowing a bit these days, yes.  What will they look like in 2010?  Who knows.  The time is NOW to take advantage of these very attractive mortgage rates.  Mortgage rates these days can be the difference in getting approved for a loan and not.  Do you really want to risk your ability to own a home by waiting?  I wouldn’t.

 

 

How did our story end?  Our clients offer was accepted and she signed the papers Friday evening.  She will close soon and move into her dream home, the home that looks like her, feels like her and will be the setting for her many memories to come.

 

 

What to take from all of this? 1st Time Homebuyers, NOW is the time!  Don’t wait!  Find your real estate Trusted Advisor , get pre-qualified and start the process.  When the clock strikes midnight on November 30th, do you want to be the one left sitting on the fence?  

 

 

 

 

If you are looking to buy or sell a home in the Raleigh, Durham, Cary, Wake Forest, Garner, Pittsboro or Chapel Hill-Carrboro area, we are here to help! We are your Triangle Area NC Real Estate experts! Please make sure to take a look at our community films and learn about what the local Triangle area has to offer.

 

As a 1st Time Home Buyer, the mortgage process can initially seem, well, overwhelming.

However, if you take it one step at a time and plan ahead, it’s really quite simple.

 

When you know you’re ready to start looking for a home in the Triangle area, there are a few steps you need to take.

 

-First, start by saving your pay stubs, bank statements, and asset statements such as your 401k or retirement statements.  Important Tip! Don’t throw away that last page of those statements!  The loan underwriters want to see everything.

   

-Next, you will also want to have your last two years tax returns and W-2’s or 10-99’s handy.  Again, remember to keep all pages and all schedules of those tax returns!  The tax returns are used if you’re self-employed, commissioned or you write off any business expenses.

 

-As you start collecting your documents, be aware of any large deposits into your accounts that are not payroll deposits.  You will want to document the source of these deposits- Were they tax return refunds? Gifts? The sale of personal property?  Make copies of the checks and any accompanying documentation.  It’s so much easier to collect this information as you go along.

 

-Next, choose a lender that has been referred by someone you trust.  Just like anything else, a proven track record is very important.

 

-When you pre-qualify for your mortgage, the lending manager  will ask for your last two months bank statements and a month of current pay stubs.

   

-The lending manager will also pull your credit report and let you know if there is anything that needs to be addressed.  Sometimes, mistakes appear on the reports, and you want to make sure you have the time, at the beginning of the mortgage process, to correct anything that might affect your loan.

  

-Your lending manager will also ask you questions about your income and assets. This information, in conjunction with your credit scores, will provide an excellent idea of the sales price, monthly payment, and out of pocket expense that you can afford. 

 

-Now, you’re ready to call your real estate agent and find the home of your dreams!

 

-The mortgage application process usually begins with a contract on a property.  You’ve done your homework, so you’re prepared!  Your lending manager will collect all of your documentation and a check for the appraisal on the house. They will send your loan to the ‘loan processor’ to order an appraisal on the home and follow up on any outstanding items to complete your file.

 

-Once everything needed for approval is in the file, your loan is submitted to an ‘Underwriter’ for review and approval.  Usually, the loan will be approved subject to final conditions.  These conditions may include anything from needing to see an additional pay stub, to a new bank statement or an explanation on a deposit, etc.

 

-Once these items are collected and reviewed by the Underwriter and, if everything is satisfactory, a ‘Clear to Close’ is issued- that means the closing package can be sent to your attorney!

 

And you’re ready to close on your loan and move into your new home. When you start collecting your needed items in the beginning of the loan process, it makes the everything easier!

 

 

Cheryl Ellington

Lending Manager

TowneBank Mortgage

919-412-9960

Cheryl.Ellington@hpw.com

 

If you are looking to buy or sell a home in the Raleigh, Durham, Cary, Wake Forest, Garner or Chapel Hill area, we are here to help! We are your Triangle Area NC Real Estate experts! Please make sure to take a look at our community videos and learn about what the local Triangle area has to offer.

 

 

Making a difference.  I think it is something we all want to do.  I know I want to.

I am a firm believer that your community is what you help make it.  I am proud to be a part of a company that not only enables, but encourages us to do more and give back to our local communities.  Through our company's charitable arm, the HPW Foundation, Coldwell banker Howard Perry and Walston associates and staff have an outlet to give back.  Since 1998, the HPW Foundation has given over $750,000 to local charitable organizations and groups.

Even in a normalizing economy, I am proud that our agents and staff are still passionate about supporting local charitable groups through donations, fundraising and volunteering.  I am honored to be part of a team of such quality people.

 

Just recently, our associates and staff volunteered to be a part of the Special Olympics of North Carolina Summer games.  Last weekend 'Team CBHPW' raced for the cure with over 22,000 others to help fund the Komen vision of a world without breast cancer.  In a little over a month, we are supporting the Second Chance Pet Adoptions '9th Annual Auction for the Animals' to help benefit the animals of Second Chance.  Keep your eyes peeled for the ever fabulous CBHPW supported 'Me Fine Foundation Purse Auction' which is held in the Fall.

Currently, the HPW Foundation supports six Triangle area charities- Komen for the Cure- Triangle affiliate, local Habitat for Humanity organizations, the Frankie Lemmon Foundation, the Me Fine Foundation, Second Chance Pet Adoptions and Special Olympics North Carolina.

Our company is fortunate to have been recognized for the dedication of our agents and employees to their community. The past two years our company has been awarded the Golden Hammer Centennial Society award from Coldwell Banker for our commitment to Habitat for Humanity.  We have also been named a Top Corporate Philanthropist by the Triangle Business Journal for the past three years.

Your community is what you make it.  Don't sit back.  Be active and get involved.

I am a Rex Hospital baby.  Born and raised, apart from a brief stint at the coast, in the Triangle.  I have lived here most of my life and have called Durham, Carrboro and Raleigh all home.  I have always known what a wonderful place the Triangle is to live, and it is nice to see the rest of the country take notice.

Just in the past week, The Today Show named Raleigh, NC the #2 Housing Market to Rebound.  MSN Real Estate reported that Forbes named Raleigh the '#1 Place Americans are Relocating.'  Most recently, Kiplinger's Personal Finance recently named Raleigh to its '10 Best Cities of 2009' list.  Men's Journal magazine just named Durham, NC to it's 2009 Best Places to Live List.  These accolades , paired with the affordability of the Triangle housing market really do equal a great place to live and a great time to buy a home.

It is more than just impressive stats though, the Triangle truly is a wonderful place to live.  It is big city business wrapped in small town goodness, and more importantly, a community with a big heart.  Everyone seems to know each other, and Triangle residents treat each other like family.  You never know who'll you meet and when you may cross paths again.  The Triangle is a land of rivalries, where sports are just as important as breathing.  Regardless of what team color you bleed, your Triangle neighbors are your neighbors, regardless.

We are 2 hours from the beach, 3.5 hours from the mountains, we have nationally renowned colleges and universities, a stong sense of family and community, a reasonable cost of living, beautiful weather, exceptional businesses and companies, the Research Triangle Park (RTP).....ok, ok, I will stop now. I am gushing.

Come and see what the rest of the country is discovering.  If you would like to learn more about the communities that make up the Triangle area, please visit our online community films.

Ok here we are it is not even summer yet but it feels like it outside. You have worked really hard to make your lawn the best looking one in Raleigh. Do not stop now. We have had a very wet spring and that has really helped to get the lawns green and looking nice. If you have been reading my blog and following my advice I think you should be seeing the results of your efforts. Now you just need to keep up on the watering. Make sure you apply between 1 and 1.25 inches of water per week to your lawn. If you see a lot of runoff stop watering in that area and move to another area. If you are using an irrigation system and see runoff have the duration changed and water that area at the start and end of a cycle. Water running down the street will not help your lawn.

It is best to water in the morning to avoid the growth of fungus. If you see your lawn developing a grey / blue cast on the lawn then your lawn is under stress. Make sure you get the water going to help it recover.

Make sure you follow the local water restrictions for your area.

Wake County Water Restrictions

If you are looking to buy or sell a home in the Raleigh, Durham, Cary and Chapel Hill area we are here to help! We are your Raleigh NC Real Estate experts! Make sure you tale a look at our community video’s and learn about what the local area has to offer.

No, you can't.  Yes, you can.  No, you can't.  Yes, you can.

 

Needless to say, the past few weeks have been a rollercoaster ride for those wondering if they would be able to use the $8000 1st Time Homebuyer Tax Credit as a down payment on a home.  Well, the answer is 'Yes. Sort of.'

 

Under a new Federal Housing Administration program announced this past Friday, "Homebuyers using FHA-approved lenders can apply the tax credit to their down payment in excess of the 3.5% of appraised value or their closing costs, which can help achieve a lower interest rate," a HUD announcement said.

 

"Families will now be able to apply their anticipated tax credit toward their home purchase right away," Donovan said in a statement. "At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders.  What we're doing today will not only help those families to purchase their first home but will represent an enormous benefit for communities struggling to deal with an oversupply of housing."

 

The most important piece to take away from this is, even though at some point in the near future you may be able to use the $8000 1st Time Homebuyers Tax Credit towards your downpayment or closing costs, the FHA will still require you have the 3.5% downpayment before the tax credit is applied.

 

This program is going to require a lot of additional policies and paperwork, and it is fair to say the details still need to be worked out and some lenders may not participate.  The additional steps will also mean you need to allow for more time on your closing.

 

The best thing to do?  Contact your Coldwell Banker Howard Perry and Walston Trusted Advisor and mortgage lender to see how these developments will affect your personal situation.

 

If you are looking to buy or sell a home in the Raleigh, Durham, Cary, Wake Forest, Garner or Chapel Hill area, we are here to help! We are your Triangle Area NC Real Estate experts! Please make sure to take a look at our community videos and learn about what the local Triangle area has to offer.

Take a few minutes and watch this short news story from The Today Show on NBC. They do a brief interview with Barbara Cocoran for the "Today's Real Estate" segment. Barbara talks about the elements that make a city poised for a rebound.

 Those elements are:

1. Job Growth  
2. Growing Population
3. Location with good weather
4. Lots of first time home buyers
5. No overbuilding of condo's or office space
6. Vital downtown areas where people can live without a car
7. Well educated population
8. Large number of forclosures earyl on.

With all these elements Raleigh ranked number 2. Raleigh has also been ranked number 4 by Forbes as one of the best places to live.

 

To watch the interview please click on this link Markets on a Rebound

To learn more about our area be sure and check out our Community Video's

If you did not put any crabgrass prevention on your lawn it is most likely too late. We have a few days in the upper 70’s to mid 80’s a few weeks ago and it may have been enough to allow the seeds to germinate. Crabgrass prevention works by preventing the seed from germinating. This could also prevent grass seed from germinating that is another reason why it is better to seed in the fall.

I am not here to do product endorsements so I suggest that you visit your local hardware or home improvement store and ask what they recommend. All of the large companies in the crop sciences business have a product. The important thing to do is use the product as directed and do not use the more is better approach. Give it time to work and you should be happy with the results.

If you are buying or selling a home in the area we can help. Coldwell Banker Howard Perry and Walston services the Cary, Chapel Hill, Raleigh, Durham Real Estate markets and all of the areas in between! Search our site for all of the listings in the MLS FREE! We are the place to find homes for sale and to list your house if you are looking to sell.

Be sure and visit our Open House Website to see all of the weekly open houses in the Triangle.

Obama Signs Economic Stimulus Bill into Law
By Kent Klein White House 17 February 2009

The economic stimulus plan passed both houses of Congress, with almost all majority Democrats supporting the measure and nearly all Republicans voting against it. Many minority-party lawmakers warn the plan is too costly and wasteful, and will not work.

President Barack Obama signs the economic stimulus bill into law in Denver, Colorado, 17 Feb 2009

U.S. President Barack Obama signed into law Tuesday the biggest economic stimulus plan in the nation's history. The almost $800 billion in government spending and tax cuts is designed to get America's economy back on track.

Less than a month after taking office, President Obama signed the American Reinvestment and Recovery Act - the cornerstone of his effort to reverse the U.S economic recession.

"I do not want to pretend that today marks the end of our economic problems nor does it constitute all of what we are going to have to do to turn our economy around," said President Obama. "But today does mark the beginning of the end."

Mr. Obama took the unusual step of holding the bill-signing ceremony outside of Washington, in the Western city of Denver, Colorado. Denver hosted the 2008 Democratic National Convention, at which Mr. Obama received his party's presidential nomination. The majority of Colorado voters supported Mr. Obama in the November election, after several elections in which Republicans won the state.  

Colorado also has a reputation for supporting businesses that produce and support so-called "clean energy".

Before President Obama signed the legislation, Blake Jones, the president of the Colorado-based Namaste Solar company, which makes solar energy equipment, said the stimulus plan will help his company and many others.

"Our trade association - the Solar Energy Industries Association - estimates that as a direct result of this stimulus bill, U.S. solar companies will create 69,000 good-paying jobs this year, and almost double that number over the next two years," said Blake Jones.

Overall, the Obama administration says the plan will create or save millions of jobs, cut taxes for 95 percent of working Americans and inject new money into efforts to reform education, health care, and rebuild infrastructure.

"Now what makes this recovery plan so important is not just that it will create or save 3.5 million jobs over the next two years, including 60,000-plus here in Colorado," said Mr. Obama. "It is that we are putting Americans to work, doing the work that America needs done."

The economic stimulus plan passed both houses of Congress, with all majority Democrats supporting the measure and nearly all Republicans voting against it. Many minority-party lawmakers warn the plan is too costly and wasteful, and will not work.

On Wednesday, Mr. Obama will visit the Southwestern state of Arizona to introduce a program to help millions of homeowners avoid mortgage foreclosures. Many economists point out that the U.S. financial crisis began with bad loans in the home mortgage industry.