First Time Buying a Home - What to do about your credit?

Unlike most things in life, buying a home is one of the trickier maneuvers not everyone can manage. There are many factors which must be working in sync for the spectacular dream of home ownership to become a reality.

Making the decision is the big part. Once you’re determined and willing to own a home (and stop paying someone else’s mortgage) you are well on your way. Having a good job and money for closing costs is important, but perhaps at the top of my list is the ability and knowledge to give you the very best deal possible.

Everyone knows that only the very highest credit scores get the lowest rates at the bank. We also know that your credit score is a direct reflection of your payment history on your report and a variety of other related factors, all to do with whether you’ve paid your bills on time and whether you have used or abused the credit given to you.

Repairing your credit score and what is on it is easier than you think! Way too many Americans accept what they’re given when they are old what a purchase will cost.

Having hands-off acceptance may not hurt us when we are making smaller purchases, but at the bank, for the biggest purchase of your life, it’s unexcused!

Think for a second about how long you will be paying for your home, most terms are 30 years. With 12 payments each year, if you pay an extra $100, that is $36,200 over the life of your loan. This is no little amount, and yet some people unwittingly pay it because of errors, not even late payments, on their reports.

If you are considering a buying a home, great! It is time to retrieve your credit score and take action to secure the lowest rates possible.

Be aware that a good credit repair lawyer can fix up the worst reports in about a year. For the do-it-yourselfer, like car repairs, you can do these type also, however you go about it, even if it takes a year, take the time to minimize what you will pay for the next thirty years. You will surely enjoy your more affordable home when you do.

After the the subprime meltdown of 2007 and the mortgage collapse of 2008, many homeowners are facing a unpleasant situation as real estate values drop sharply along with the stock market. Numerous homeowners have watched their real estate values plunge downward to under the level that they bought the home for in the first place. This trend is vexing for sellers, but presents buyers with an opportunity to pick a house at a low price.

The plummeting real estate values are not a good economic indicator. Homeowners who once viewed their house as a safe place to put their money are now seeing their homes being valued for much less than what they consider the right value. Many homeowners are waking up to the fact that their house is worth considerably less now than when they bought it in the first place.

As real estate values have spiraled down, so too have new home starts. The availability of foreclosed homes has loaded the market with available homes that are bargain-priced as banks and other lenders are ready to let go of these homes for considerably less than what they are worth. With property values going down, many buyers see an opportunity to get into the housing market and go hunting for a deal.

Affordibility is key in this real estate market. If consumer were smart and had saved up a substantial sum of money to put down as a down payment, they can probably get financing if they have good credit. While banks might be drying up, there are enough other institutions and federal entities that can get qualified buyers a loan.

Homeowners who are forced by financial circumstances to sell their home are starting to understand that it is a buyer’s market. They also realize that they may not get their asking price, but a substantially lower amount. If homeowners don’t have to sell out of dire financial necessity, most experts are advising homeowners to stay where they are.

The fact that real estate values are plummeting is not welcome for the economy as a whole nor pleasant for homeowners. Nevertheless, it is providing some individuals a chance to buy a house at a much lower price. With this many homes being for sale because of the foreclosure explosion, numerous homeowners who want to put their homes on the market are finding themselves competing with bargain priced homes put up for foreclosure.

In today’s world our credit score is everything. Creditors and bankers approve or disapprove loans based on your credit worthiness. In some cases it also will determine your credibility to certain employers or landlords.

A good credit rating allows you to be able to apply for loans and/or credit cards easily. It will also mean that you will have more chances of getting certain jobs that may require a background check.

Having bad credit can reduce the opportunities of things. You may get approved for a loan or for a credit card but with a higher interest rate. You are considered a “at risk” customer because the creditors are not sure if you will pay your bills. If you are trying to apply for an apartment complex the landlords may take a look at your credit score to determine if you will be able to pay your rent. Not to mention that most look at the report and will use it to form an opinion about you character.

These are just some of the many reasons as to why having a good credit score is very important in today’s world. However, what do you do if you happen to have a bad credit score? If you have bad credit it is important to address this problem as soon as you can. Here are few ways to do just that.

First, you must stop missing payments and make payments on time to avoid making things worse. So how do you do this? You pay your previous overdue debts as soon as possible. This cuts off the bad credit reports from creditors. It will not improve the actual credit score but it will put you on the right track to repairing your credit history.

Secondly, you can raise your credit score by opening a new savings or checking account. You should also apply for a secured credit card. This secured card will have a lower limit and a higher interest rate however,by paying the monthly credit card bills on time you will be able to see a significant rise in your credit history report.

Follow these steps you will eventually start to see a good credit rating. However, your past credit history will remain on the “books”. This does not expire for 5 to 7 years. You must remember that it does take time to raise your credit rating. You must be patient and diligent to see a change.

That is why it is very important to make positive reports for your creditors. They then will pass those on to credit reporting agencies. Remember to pay your loans and credit cards on time in order to get a good credit rating. By doing so you will eventually end up with a good credit score and history. Never miss out on a future financial opportunity when they come your way.

If you have already heard the term reverse mortgage, it still sounds a little odd. If this is the first time you are hearing the term, it will probably sound like some kind of shady deal. Reverse mortgages are becoming more popular these days, but are they scams or are they legitimate?Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay YOU the mortgage payments? Let’s review what a reverse mortgage is so these questions can be answered.

The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. These backwards mortgages are usually performed through a bank or broker. The homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

Why would retired persons want to have a reverse mortgage? It provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

One very common misconception about the reverse mortgage is that the bank eventually takes ownership of your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due only when the homeowner moves out, such as moving into a nursing home, or becomes deceased. At those times, the survivors can repay the loan themselves if they want to keep the house. They can also sell the home and repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.

These mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, as well as unexpected costs can creep up. Use a reverse mortgage to help yourself to gain the financial security in retirement that you worked so hard to achieve.

In today’s world our credit score is everything. Creditors and bankers approve or disapprove loans based on your credit worthiness. In some cases it also will determine your credibility to certain employers or landlords.

A good credit rating allows you to be able to apply for loans and/or credit cards easily. And, ultimately, isn’t that the goal? It will also mean that you will have more chances of getting certain jobs. You will be able to pay your bills on time.

Having bad credit reduces the opportunities of these things. You may get approved for a loan or for a credit card but with a higher interest rate. You are considered a “at risk” customer because the creditors are not sure if you will pay your bills on time. If you are trying to apply for an apartment complex the landlords may take a look at your credit score to determine if you will be able to pay your rent and utilities.

These are just some of the reasons as to why having a good credit score is important in today’s world. However, what do you do if you happen to have a bad credit score? If you have bad credit it is important to fix the problem as soon as you can.

First, you must stop missing payments and make payments on time to avoid making things worse. So how do you do this? You pay your previous overdue debts as soon as possible. This cuts off the bad credit reports from creditors. It will not improve the actual credit score but it will put you on the right track to repairing your credit history.

Secondly, you can help raise your credit score by opening a new savings or checking account. By paying the monthly credit card bills on time you will be able to see a significant rise in your credit history report.

If you continue to follow these steps you will eventually start to see a good credit rating. However, your past credit history will contain bad credit scores and ratings. This does not expire for 5 to 7 years. You must remember that it does take time to raise your credit rating. You must be patient and diligent to see a change.

That is why it is very important to make positive reports for your creditors. They then will pass those on to credit reporting agencies. Remember to pay your loans and credit cards on time in order to get a good credit rating. By doing so you will eventually end up with a good credit score and history. Never miss out on a future financial opportunity when they come your way.

We all know by now that home owners have a hidden savings account…its called HOME EQUITY.

Equity is the value of your home minus the remaining mortgage balance which is outstanding. While you live, eat and sleep in your home worrying about debts or wishing you could refurnish the living room you may be sitting on the cash that will grant your wishes.

Would You Want an Equity Line of Credit?

With a normal loan, which deposits a set amount of money in your account and begins charging you interest and payments at a fixed rate until repaid, a line of credit acts sort of like a credit card account. You do not need to pay interest on the full amount you have access to — only on the amount you have used. (And in some cases you then have access to the account again.)

When using an equity line of credit (also known as a HELOC) it gives you greater flexibility with the least cost. Not only can you access the credit only as you need it,your monthly payments will reflect only the balanced used. Some lines of credit have only the interest as the minimum payment which can be helpful when finances are tight. In some case you even have an option of paying just the intrest on the amounts used for a specific span of time.

An equity line of credit is a nice thing to have when you don’t have a large fixed amount to spend in one place, and when you repay it you want access to the credit without asking for a new loan when you have paid it back.

What Can I Use the Equity Line of Credit For?

We can all find lots of uses for a line of credit loan…but here are some of the most common examples.

Consolidate Debts

Consolidate or wipe out some of your other bills/debts completely. Not only does this make your monthly breathing room a bit wider…but in the long run it will help your credit score and interest rates that are offered to you on other loans as well.

Second mortgage

Use the equity line to pay off or down your second…in some cases paying down will also allow you to reduce the interest rate. (which is normally higher on a second)

Add too, remodel, or travel.

Cover the cost of an addition, redecorate, or go on a trip…all at a interest rate lower then most credit cards.

Ok…so whats the Down Side?

While the before mentioned information sounds great…whats the rest of the it look like.

Some debts — like student loans- have features that you may not be entitled to if you switch them to an equity line of credit.

Other items like cars and vacations may seem like a good idea to buy with your home equity line of credit, but with the ability to pay only the interest you may find the motivation to pay off the debt is lacking and end up owing for items that have lost their value or were consumable. Plan to pay off the debt quickly for the most advantage.

Now refinancing a second mortgage may not be a good idea depending on interest rates and your repayment terms. While lines of credit take advantage of current low interest rates you may find that your regular loans protect you better from fluctuating rates if you will not be paying the loan down in the next few years.

We all understand the freedom and relief that comes from having access to extra funds. For both those emergencies, as well as last minute purchases. However its important to understand the risks as well as benefits.

Now that the ink has dried on the Obama Housing Stability Plan, people want to know what’s in it for them. In other words, people want to know will this bill help make my house payments any lower? So here goes: basically the Treasury Department will offer inducements and put pressure on lenders to reduce monthly payments for borrowers at risk of losing their houses which should result in five benefits for homeowners. They include:

1. It Helps Hard-Pressed Homeowners Stay in their Homes: This initiative will reach millions of responsible yet struggling homeowners who can no longer afford their mortgage payments because of the current recession, yet cannot sell their homes because prices have fallen so significantly. Millions of hard-working families have seen their mortgage payments rise to 40 or even 50 percent of their monthly income “. The Homeowner Stability Initiative helps those who commit to make reasonable monthly mortgage payments to stay in their homes ” providing families with security and neighborhoods with stability.

2. No help for flippers. Remember those TV shows where investors boasted of making massive profits by fixing up houses and then reselling them? Those days are mostly gone and in addition, the Obama plan provides no assistance for real estate speculators with homeowners receiving all the funds.

3. The Plan Helps Stabilize Neighborhoods. A foreclosure often brings an unwelcome element into a neighborhood. Most vacant homes attract vandals and vagrants as well as piles of yellowed newspapers on the stoop. Keeping a property from becoming a foreclosure in the first place, the plan helps to stabilize a neighborhood.

4. The Plan Proactively Assists Homeowners Not Yet Late on Payments. Oftentimes responsible homeowners who know that their jobs are in jeopardy due to the recession will call their mortgage lender(s) hoping to make some kind of arrangement, only to be told that there is nothing that can be done. Unless a homeowner is in arrears, banks will not listen to their plea for help. This plan offers assistance to homeowners at risk of default despite being current on their mortgage payments.

5. The Obama Housing Fix-it Plan hopes to make total monthly payments affordable. The approach is to attack the homeowners total debt, and create a payment plan that the homeowner can keep. Using the power of Fannie Mae and Freddie Mac in conjunction with the Treasury Department, the plan offers to make a homeowner’s debt more sustainable.

The Financial Stability Plan’s goal is to bring back a sense of security to the struggling real estate market. The plan has been designed to discourage lenders from opting to foreclose on mortgages that could be viable now out of fear that home prices will fall even further later on. Plunging house prices, for example, make it harder for purchasers to obtain new loans ” even with good credit, because lenders concerned about the true value of homes, simply refuse to extend credit for fear that they may be in the same situation five years down the road.

The Obama Housing Fix-it Plan has much more to it. Parts of it involve granting incentives to lenders who postpone foreclosures, paying down principal for owners who stay in their property for five years, and even giving incentives to people who successfully modify loans.

The Treasury Department will be using the full power of Fannie Mae and Freddie Mac to standardize guidelines for loan modifications. And the benefit not talked about to consider is this one: by pumping 75 billion into the economy, the administration is giving the economy a sudden jolt that might be felt as quickly as June. The word on the street is that purchasing a home now and renting it out may prove to be a much safer bet than keeping the money in the bank!

One of the most well known plumbing noises is water hammer. It sounds like a hammer hitting pipes because water going through the pipe hits a bend in the pipe causing a shockwave. Water hammer is often caused by quick-closing valves, like those on washing machines and dishwashers, but the sudden shutting-off of water flow to toilets or by faucets can cause it as well. Whatever the culprit, the result is the same -a loud bang or banging sound. This impact can create pressure, and over time these repeated impacts and the pressure they cause can damage pipes and valves, weakening them and pipe joints.

Most homes these days have devices called air chambers, air cushions, or water capacitors. They have chambers within them filled with air, which act as shock absorbers. These devices can become completely or party filled with water because over time the air is absorbed into the water beneath it.

The damage water hammer causes can lead to a pipe breaking or bursting, which can lead to property damage or even injury. A professional evaluation is recommended, both to determine the extent of the problem and to get an estimate of what repairs or replacement will cost.

If water hammer suddenly starts, it’s often because one or more of a home’s air chambers have filled with so much water that they no longer work. It’s possible that they can be repaired instead of replaced. First the waterlogged air chamber(s) must be located. The water supply needs to be turned off prior to reaching the chamber(s), then the faucets and valves ahead of the chamber(s) need to be opened to allow the water in the pipe and chamber to drain. Air will then flow into the chamber restoring it.

If a home doesn’t have air chambers built into its plumbing system, reducing the overall water pressure might be a solution. This can be done by installing pressure-reducing valves in the water supply lines. But this might not work because the water pressure might be too low for second and third floor faucets and toilets to work properly. Another solution is to install air chambers, may current models have built-in valves for letting their air refill.

Other than damage caused by the affected pipe’s breaking, water hammer isn’t usually dangerous. It is important though to have a professional evaluate your problem and to help determine what will be needed to fix it.

The other day, my wife and I ate lunch at a local sushi restaurant where the sushi chef misspoke. He asked me if I wanted an order of scams (instead of clams). Of course, I graciously declined, but almost every day it seems like I hear about another real-estate-related scam. Who knows? Maybe there are as many varieties of scams as one could order in a sushi restaurant! If so, here are three categories:

Phantom Helper:

The smooth-talking scam artist takes a fee from the homeowner, assuring him that he will be able to easily slice hundreds from the owners payment. Ten phone calls later, the owner realizes the helper has deserted him with his money, and has vanished completely.

The Rescuer Technique:

The homeowner is saved from his dilemma by the generous helper who offers to bail him out. Often the helper needs to take title to the property in order to modify the loan, and promises to lease the property back to the homeowner. Then when the owner is able to purchase, he will be able to purchase the property back again. Sounds good, right? Usually the scammer ends up not honoring the agreement, and simply kicks out the owner. Or the helper rents out the property until it is foreclosed upon and keeps all the rent receipts for himself.

Tempt and then Switch:

The homeowner is saved from his dilemma by the generous helper who offers to bail him out. Perhaps the helper promises to take title to the property, modify the loan, and then lease the property back to the homeowner until he is able to purchase the property. Usually the scammer ends up not honoring the agreement, and does the old switcheroo. Meaning that because he is the owner, he can legally kick out the owner. Often the helper rents the property until it is foreclosed upon and keeps all the rent receipts for himself.

Obviously, there are hundreds of scams, these are just the three main categories. Other categories might include identity-theft, loan fraud, and even elder abuse. How do these scam artists find their victims? Sometimes owners call helpers or visit internet website. Some scammers post signs on telephone poles like We Buy Homes or Stop Foreclosure Now.

If you are concerned about a loved one working with a foreclosure helper, some tell-tale signs to watch for include: if a helper asks for payment only in the form of cash, cashiers check or wire transfer ” beware. If a helper asks you to transfer title or your interest in the property– beware; or if a helper makes an guaranteed promise to stop foreclosure or other assurances”beware.

Just as one Dad was wise to do a Google search for delicious dinner recipes; when it comes to foreclosures, short sales and loan modifications, you might wish to check online and do some homework to help you too!

Because of the recession, a great number of families have had foreclosure measures taken on them by their bank. If you’re presently having problems making the payments each month, this article can help you to keep out of foreclosure.

Mortgage loan modification is many times the answer to your mortgage payment problems. This process can help you keep your house and save your family from the foreclosure experience, including getting evicted. It’s not easy to do, but it is doableand it’s worth the elbow grease.

When you apply for loan modification, you must be absolutely that your application is flawless. You can not afford to make slips on something this important, so be persistent when looking for mistakes. Furthermore make sure the needed documents are all in place.

Your lender will decide to consider your application based on what you send in. If you don’t take care of your application, it won’t even get through the first round of consideration. Read the guidelines and requirements of your lender carefully and adhere to these guidelines. .

The first thing you should put in your application package is a ‘hardship letter’. You will have to explain how you got into a difficult financial situation and why you want the mortgage loan modification. Make sure it’s credible enough and you tell the truth.

This is significant. Don’t hold anything back and always, always. always tell it like it is. If you omit information, they will discover it and you’ll be in a lot of trouble. Remember that a lender has the possibility to look at your financial records very carefully, and they will check the information you provide.

If you sense you need help from a qualified expert in the mortgage loan modification procedure, request the help of a loan modification company. They are experts in negotiating terms for you and it’s a smart decision to consult with one of these companies if you’re not absolutely convinced you can deal with it by yourself.