Tag Archives: Credit

Need Some Simple Basics On Credit ?

When I get clients looking that are looking to get a home loan usually they are eager to not qualify for one of the first time home buyer loans available, they just want to get qualified. One of the first questions that I have to ask anyone is “do you know how your credit is” ? Whether you want to buy Santa Maria property or a you are looking to refinance your home, many times the stumbling block is the credit.   This blog post will be mainly concerned on a few simple things to be aware of regarding your credit such as. What is Credit? What is on a Credit Report? What affects your Credit?  Just an FYI this is not gonna have every answer but should be something of a starting point for you. Out side of that if you have any questions on either buying a home or getting a home loan feel free to ask.   I will post updates on credit and how to boost in later posts as to keep this from being to lengthy.

What is Credit? If you have a credit card or have ever borrowed money, you were given Credit, it can be from a friend or even from the local little store on the corner.  Credit is basically you using someone else’s money to pay for things now and paying them back later.  It also means that you agree to certain terms to repay this money that you have borrowed, usually with interest, whether it be to a company or to a person.  A loan or credit should be considered a legal obligation, meaning that there could be legal consequences for failure to pay this money back.  This is where people have either used or abused their credit to the point that the person (creditor) ends up having to take you to court if you cannot pay that money you borrowed back.   Problem with today is we live off of credit you cannot turn your head without someone telling you gotta have this or that.  So we end up borrowing money for the car, and even money for the Vacation.  So in reality you are still paying for your vacation even a year later.

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How do you know if you have good credit?  There are times that people believe that have good credit without knowing what their credit situation or what their credit score is.  I cannot tell you how many times, someone was in shock to find out what their actual credit score was.   Its not always the clients fault their can be misinformation on the credit report such as someone else’s information on your credit report.  Other times its old accounts that are in collections that that the client may have forgotten about. The best way to find out what your credit to just get a Credit Report. A Credit Report is a record or a history of how you have paid your credit card debt, installment loans, and other debts, like utilities, doctor bills, insurance bills, etc.  You can go to www.annualcreditreport.com and get a free report once a year to find out what is showing on your credit.  Only problem is that they do not show your scores they charge you 7.95 last I looked for your scores.   Your scores are what you need to know not just the what is reporting on your credit. That is basically like having only some of the ingredients to a recipe.

Within a Credit Report there are three reporting agencies.  Their names are: Equifax, Transunion and Experian. These reporting agencies do not share information with each other and they do not grant or deny credit. They simply report information as it is supplied to them by your creditors. The creditors can report to one of these agencies or to all three, It just depends.  THIS IS VERY IMPORTANT to understand!!!!   Most people have had their credit checked when buying a car or furniture or getting a cell phone.  WHEN BUYING A HOME A CREDIT CHECK IS DONE ON ALL 3 BUREAUS.   What this does is catch what may not be reporting on one of the bureaus so your credit score can be completely different when you bought that car.  I have had people come in thinking they have a 680 for example and instead they really only have a 620.  When it comes to mortgages we use the Middle Score so Experian can have a 680 , Trans Union can have a 610 and Equifax a 620.  So the lender will settle on a 620.

credit reportThere are several types of information that are included in all Credit Reports.

  1. Identifying Information: your name, current and previous addresses, telephone number, Social Security number, date of birth and current and previous employers. This information comes from credit applications you have filled out when you applied for credit.
  2. Credit Scores: a number from each credit agency (Equifax, Transunion and Experian) based on a secret computer model that grades your credit history.
  3. Credit Information: This contains specific information about your credit cards, and other loans. This information includes the date opened, credit limit or loan amount, balance, and monthly payment. The report also shows your payment history during the past several years and the names of anyone else responsible for paying the account, such as a spouse or a so-signer. It also shows late payments and accounts turned over to collection agencies.
  4. Public Record Information: bankruptcy records, foreclosures, tax liens for unpaid taxes, monetary court judgments (such as lawsuits), and, in some states, overdue child support. This information comes from federal, state, and local government public records.
  5. Inquiries: the names of those who obtained a copy of your credit report and how often you have applied for credit in the past two years.
  6. OFAC Compliance: due to the Patriot Act, your information will be checked against the federal lists of potential terrorists, I have never seen an alert as to whether someone is a terrorist or not.

As you can tell there is enough information on your credit report to basically become you online.  Something to seriously keep in mind all that is needed to basically run your credit and steal your identity and become you on paper or virtually on line.   Is your name, your DOB and social.   its not always a best idea to put your DOB on social networks for example since that is just one piece of the puzzle make them work for it and find it.

Simple tips to boost your scores

1) Don’t make minimum payments on y0ur credit cards make a little extra it registers if you are just making minimum payments.

2) Don’t max your cards out, if you do not need it don’t buy it pretty simple don’t have money in the bank to go on vacation then don’t go.  Once you get over 50% of your credit limit you start to loose serious points.

3) Don’t apply every time at the check out so you can save 10%.  Seriously its not worth it all it does is encourage spending and cost you points on your credit score.

4) Just pay on time.

Next blog more tips on boosting scores, what to keep in mind when getting a home loan etc. what lenders look for.

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When Can I Buy A Home After A Short Sale, Foreclosure or a Bankruptcy?

The other day I had someone comment to me that no one really wants to buy a home and no one is really buying, that is not true, they are more like trying to buy but qualifying in today’s world is not the same as it once was.  The latest studies show that 29% of all Americans have credit scores of 580 or below, and in the Santa Maria real estate market that is no exception. The FICO score is one of the first things lenders look at in determining a borrowers qualification for getting a mortgage loan.  Most of my appointments lately have been those that have sufficient income to qualify to purchase a majority of the Santa Maria homes for sale especially with the today’s current interest and with the values that homes are currently at.   The reality is that for the majority of those in Santa Maria or around the surrounding areas the rent of the home that most are living in can be purchased and paying a lower mortgage payment than what they are currently pay for rent.  But the problem is that most of them seem to have low credit scores due to past events.  I have a good majority of my appointments now consist of those that lost their homes 2-3 years ago or those that have had to file bankruptcy for whatever reason 2-3 years ago or more.  But with today’s lending environment banks are not willing to lend money to people with a past history that is still affecting their scores.  In some cases, it is possible for people with bad credit to qualify for a home loan, but it is difficult and the rate is higher. Essentially, this means that nearly one in every three Americans do not have enough good credit to purchase real estate.

But…..

If you did lose your home lets say 3 years ago you do qualify for an FHA loan from the date of sale on your home when you lost it and the biggest factor that may be holding you back is your credit.  People seem to forget to check up on their and verify what is being reported.  It may be accurate it may not be the reality is YOU need to know and you do get a free credit report once a year so why not see whats on there and you can even dispute it if it should of been removed because you have already taken care of that particular account.  To see what is being reported on your credit report you can go to www.AnnualCreditReport.com, just a heads up you will need to have some old account numbers handy to verify that you are you .. also keep in mind this is only to see what accounts are on your credit report they will not disclose credit scores those you have to pay for separately for each credit bureau.

Those that lost their homes due to a foreclosure and even those that did a short sale on their homes 3 years ago are not eligible for an FHA loan so that means

3 years ago you lost your home now you can probably buy that same home in that same neighborhood for less than half what you probably owed on it when you lost it.

Although I know for many at the time of losing the home it was pretty dramatic whether you did a foreclosure or a short sale it really doesn’t matter both events are probably something you never thought you would do or that would ever happen to you.  But you were not alone in this and millions of other home owners had to experience the same feelings of failure and disappointment.  But at the same time I am getting some really happy people when they are qualified and buying a home in the area for less than sometimes even as much as 70% of what they owed on their home.  So sometimes one door closes and another door opens, it just takes awhile.

As for Bankruptcy same thing all you need is 3 years so if you were in the position that you felt you had to file for bankruptcy and 3 years have passed you can buy a home as well.   Now if you lost a home 3 years ago and you filed BK 2 years ago you need to wait till the 3yrs. have passed on the BK and its not from the date you filed but from the date it was discharged basically when you were done and over with it .  Which if you filed a chapter 13 might be a little longer of a process but if you filed a chapter 7 could be much sooner.  But you still have to re-establish your credit.  I once had two brothers that filed BK on the same day due to a failed business they had together one brother I had 700 plus fico scores and the other I could not touch.  The difference was that one brother was diligent about re-establishing his credit and building it back up.  I had clients this year that had filed BK and swore to never use credit again which is fine unless you ever want to borrow money.  So when I ran their credit, they had nothing no scores nothing … they had not debt also which is great and lived by the attitude if we have no cash to buy we do not buy it but I could do nothing with them.

Needless to say that for most people what is stopping them is credit not necessarily their income, from buying a home.   Simple solution is just check your credit and address any issues you see there, and if you see something that should be fixed dispute it.  IT IS FREE TO CHECK YOUR CREDIT YOU CAN ONCE A YEAR WWW.ANNUALCREDITREPORT.COM.

For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better

information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s

 

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Getting A Divorce and Credit Scores

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Homeowners getting a divorce is nothing in any where and that holds true for the Santa Maria real estate market, and a divorce does affect your mortgage home loan among many other things.

When a marriage ends in divorce, the lives of those involved are changed forever. During this time of upheaval, one thing that shouldn’t have to change is the credit status you’ve worked so hard to achieve.

Unfortunately, for many, the experience is the exact opposite. Unfulfilled promises to pay bills, the maxing out of credit cards, and a total breakdown in communication frequently lead to the annihilation of at least one spouse’s credit. Depending upon how finances are structured, it can sometimes have a negative impact on both parties.

The good news is it doesn’t have to be this way. By taking a proactive approach and creating a specific plan to maintain one’s credit status, anyone can ensure that “starting over” doesn’t have to mean rebuilding credit.

The first step for anyone going through a divorce is to obtain copies of your credit report from the 3 major agencies: Equifax, Experian®, and TransUnion®. It’s impossible to formulate a plan without having a complete understanding of the situation. (Once a year, you may obtain a free credit report by visiting www.AnnualCreditReport.com.)

Once you’ve gathered the facts, you can begin to address what’s most important. Create a spreadsheet, and list all of the accounts that are currently open. For each entry, fill in columns with the following information: creditor name, contact number, the account number, type of account (e.g. credit card, car loan, etc.), account status (e.g. current, past due), account balance, minimum monthly payment amount, and who is vested in the account (joint/individual/authorized signer).

Now that you have this information at your fingertips, it’s time to make a plan.

There are two types of credit accounts, and each is handled differently during a divorce. The first type is a secured account, meaning it’s attached to an asset. The most common secured
accounts are car loans and home mortgages. The second type is an unsecured account. These accounts are typically credit cards and charge cards, and they have no assets attached.

credit repair

When it comes to a secured account, your best option is to sell the asset. This way the loan is paid off and your name is no longer attached. The next best option is to refinance the loan. In other words, one spouse buys out the other. This only works, however, if the purchasing spouse can qualify for a loan by themselves and can assume payments on their own. Your last option is to keep your name on the loan. This is the most risky option because if you’re not the one making the payment, your credit is truly vulnerable. If you decide to keep your name on the loan, make sure your name is also kept on the title. The worst case scenario is being stuck paying for something that you do not legally own.

In the case of a mortgage, enlisting the aid of a qualified mortgage professional is extremely important. This individual will review your existing home loan along with the equity you’ve built up and help you to determine the best course of action.

When it comes to unsecured accounts, you will need to act quickly. It’s important to know which spouse (if not both) is vested. If you are merely a signer on the account, have your name removed immediately. If you are the vested party and your spouse is a signer, have their name removed. Any joint accounts (both parties vested) that do not carry a balance should be closed immediately.

If there are jointly vested accounts which carry a balance, your best option is to have them frozen. This will ensure that no future charges can be made to the accounts. When an account is frozen, however, it is frozen for both parties. If you do not have any credit cards in your name, it is recommended you obtain one before freezing all of your jointly vested accounts. By having a card in your own name, you now have the option of transferring any joint balances into your account, guaranteeing they’ll get paid.

Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. It is also important to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. The message here is to not only eliminate all joint accounts, but to do it quickly.

Divorce is difficult for everyone involved. By taking these steps, you can ensure that your credit remains intact.

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Call me directly for a free consultation.

If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans.  So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home.  If you have any suggestions or questions in how I can provide more or better

information please let me know.  I have been helping my clients for the last 15 years  on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

contact Gene Perez

Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker  for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following:  you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s

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