Since 2007, mortgage lenders have clamped down in many areas of underwriting, but none more so than in the area of credit scoring.

Minimum FICO levels are up 120 points or more and conforming mortgage lenders now levy large fees on borrowers whose scores are below 740.

Keeping your credit scores high is a worthwhile goal, but it’s not always easy to do – especially when you don’t know the ins-and-out of how the credit scoring system works.

The Wall Street Journal wrote a terrific piece on credit scoring this week. It’s full of helpful, relevant tips for home buyers, homeowners, and everyone else.

Aside from covering the five basic components of a credit score — shown at right – the piece provides insightfukl advice on credit-related topics including:

• The difference between a “hard inquiry” and a “soft inquiry”
• Why paying for your credit report is a foolish use of funds
• Why it doesn’t matter if you have an 800 FICO

The article also talks about the optimal balance a person should carry on their credit cards to get the biggest FICO boost.

Credit scores determine your mortgage rate.  Therefore, do what you can to keep your scores high. Follow the tips in the Wall Street Journal article and lean on public resources like myFICO.com.

Having good credit can be a real money-saver.  Month after month after month.

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, and is the resident “Money Guy” on Realty Resolve.

Chris can be found at
Orlando FHA Loans,
Chris[at]OrlandoMortgagePro[dot]com,
or by calling 407.377.0500 x 210

Once again, the country’s foreclosures are concentrated in just a few states.

As reported by foreclosure-tracking company RealtyTrac.com, more than 50 percent of the country’s foreclosure-related actions in August occurred in just four states:

• California : 25.76 percent
• Florida : 17.4 percent
• Michigan :  5.4 percent
• Nevada : 5.0 percent

The rest of the “Top 10″ foreclosure states included Arizona, Illinois, Georgia, Ohio, Texas and New Jersey.

Versus July’s numbers, the U.S. foreclosure rate improved last month.  However, the August data is awful in comparison to last year — foreclosures are up nearly 18 percent.

The silver lining? High foreclosure rates are yielding tremendous opportunities for today’s home buyers. Buyers of distressed properties now account for about one-third of all home sales and low mortgage rates and a federal tax credit are spurring sales.

Search the complete August 2009 foreclosure report for yourself, including foreclosure heatmaps and other trends on the RealtyTrac website.

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, and is the resident “Money Guy” on Realty Resolve.

Chris can be found at
Orlando FHA Loans,
Chris[at]OrlandoMortgagePro[dot]com,
or by calling 407.377.0500 x 210

There is much speculation as to whether the best Orlando interest rates and Orlando home prices are going to be around 12-months from now. It is no secret that many of the recent steps taken by our government are highly inflationary.

The question on everyones mind is - what does that mean for me and my home buying ambitions? The question that is less well-known yet equally important is whether the current qualification guidelines are going to be the same 12-months from now.

As Florida’s #1 FHA Mortgage Broker, I would speculate no. Experience shows that inclination would be accurate… here is why. Mortgage guidelines, specifically FHA mortgage home loan guidelines rend to be a lagging indicator of mortgage defaults. In other words, as mortgage default continue to increase, guidelines will continue to be more restrictive.

So, while low Orlando interest rates may be available a year from now and Orlando real estate may still be reasonable, qualifying for a loan to buy that real estate may be harder. We have already seen many lenders apply strict guidelines on credit scores even though officially FHA home loans do not have credit score requirement.

For example, many lenders used to allow 580 scores. That number then increased to 600. Now all but one wholesaler I know of has moved to a minimum of 620 - that sole wholesaler is at 600 but expect that they follow suit in relatively short order.

The obvious question arises - “Where will the requirement be next year?” If you have a credit score over 700, you will be okay, but those with less than a 700 score may find that they are - unexpectedly - in need of Orlando credit repair in order to qualify for ANY FHA mortgage loans. The best bet is to get a mortgage pre-qualification now and get expert advice from a trusted Certified Mortgage Planning Specialist [CMPS]. Waiting could be the difference between being an Orlando home owner and being a renter for who knows how long!?

For unconditional yet sound mortgage advice, contact me to see where you fall in the current environment and if you are benefited by acting sooner rather than later.

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today within its target range of 0.000-0.250 percent. The Fed also reiterated its plan to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the economy may still be contracting, but that it’s not happening with the same speed as in prior months. Household spending is stabilizing and financial markets are “easing”.

Nevertheless, threats to the recovery are everywhere with the following items on the Fed’s short list:

• The growing ranks of unemployed workers
• The reduction of housing wealth nationally
• Reduced inventories and investment from business

Furthermore, the FOMC fingered today’s inflation levels as too low to support economic growth. This justifies the Fed’s plan to hold the Fed Funds Rate near zero percent “for an extended period”.

For home buyers and refinancing homeowners, today’s press release was not favorable.

After the Fed’s announcement, stock markets rallied on the idea that the worst of the economy really is over and that led to a broad bond market sell-off. Mortgage rates spiked in response, adding as much as 0.125 percent, in some cases.

The FOMC’s next scheduled meeting is June 23-24, 2009.

Source
Parsing the Fed Statement
The Wall Street Journal Online
April 29, 2009
http://online.wsj.com/public/resources/documents/info-fedparse0904.html

3 Main provisions of the 2009 economic stimulus plan that benefit Orlando Real Estate Buyers and Owners.

Benefit #1 — Expansion of Home Improvement Tax Credit

The tax credit for making energy efficient home improvements is now 30% of the cost of the improvements up to a maximum of $1,500. This means that if the improvements cost you $4,500, you

would receive a tax refund of about $1,500 when you file your tax returns. Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters. Generally, your home improvement contractor and/or the manufacturer selling the improvements issues a certification that clarifies whether the improvements meet the necessary standards for energy efficiency. Most modern windows, furnaces, and air conditioners meet these requirements. If you’ve been holding off on making some of these improvements, now is a great time to get a move on it - especially with all the great deals that are being offered!  If you live in the Orlando area and are in need of a quality introduction to someone that can help with these items, let me know - i am glad to help.

Benefit #2 — Expansion of First-time Home Buyer $8,000 Tax Credit

The tax credit available to Orlando’s first time home buyers was increased from $7,500 to $8,000 for Orlando Real Estate purchased between January 1, 2009, and December 1, 2009. Also, the credit no longer needs to be paid back as long as you live in your new Orlando home without selling it for at least 3 years.The previous version of the credit expired on July 1, 2009, and required home buyers to pay the funds back over a 15 year time frame.
The income limitations remain the same ($75,000 for single tax payers claiming the full credit and $150,000 for married tax payers), as do most other qualification requirements. Also, the credit remains refundable. This means that first-time home buyers who owe less than $8,000 in taxes for the year are still eligible for the full $8,000 credit when they file their tax returns. In that case, the IRS will write you a check for the difference between $8,000 and your actual tax bill. In fact, the credit can be claimed on your 2008 tax returns that you file by April 15, 2009, even if you buy the home in 2009.
There is one catch, however: if you bought the home in 2008, the credit remains $7,500, and it still needs to be paid back over a 15 year time frame beginning in 2011 when you file your 2010 returns.

Benefit #3 — Higher Reverse Mortgage Loan Limits

The loan limits for FHA-insured reverse mortgages have been increased to $625,500 across the entire country - not just the higher cost areas. The previous limit was $417,000 across the country. This is especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated.

This coincides with another little-known change in the reverse mortgage arena: the availability of reverse mortgages on home purchase transactions. This is a fantastic opportunity for senior citizens to buy a new home and live mortgage payment-free without having to wait for their old home to sell. Seniors could also use this strategy to buy a new home and turn the old home into a rental or otherwise wait for market conditions to improve before trying to sell the old home.

P.S. This is big news, you may choose to forward it to tell you care about…

Where to now?

Get the 21 Most FAQ about the $8000 First Time Home Buyer Tax Credit - new and old.

Find out home much home you qualify for NOW.

Get introduced to a solid Realtor regardless of where you are in the country.

As an Orlando Mortgage Broker in Seminole County, I have had the experience of working with many insurance carriers -some good - some bad. As the largest private property insurer makes the move to pull out of Florida, home owners are wondering - what do we do now? I personally have been using State Farm since day one… so you and me, yeah… same boat here!

The most pivotal, yet most overlooked thing, is likely the urgency to move QUICKLY!

“But Chris, this is supposed to happen over a period of a few years… what’s the rush?”

Glad you asked!

The Answer - Capacity.

Effectively, when State Farm pulls out, the other carriers are going to be inundated with folks that need their homes insured. While this is a welcome event for those carriers, it is not all roses for them. Imagine these carriers are like a sponge. As they soak up these other policies abandoned by State Farm, they will begin to saturate. Once they max out, home owners without insurance will be left with less options.

It is safe to assume that the best, most competitive companies will fill up first, is it not?

At the end of the day, those that do not hesitate will end up with the most options and therefore the best options. Meaning, those policy holders that act the fastest will have the best and broadest options available to them - those that wait and hold on to the Farm the longest will be left with the lessor of the options and likely pay more for their home owner’s insurance for years to come.

Here are 3 EASY STEPS to take to make sure that you get the very best that is out there.

STEP 1: LINE UP THE DUCKS - Pull out your current policy and have it handy when you contact possible insurance companies. DON’T HAVE THEM? Call your current carrier and ask for copies of your “Declaration Pages”. Commonly referred to as “Dec Pages” show the coverage that you have and will assist your hunt for a new provider. [Sample of what you should get from State Farm.]

STEP 2: PICK UP THE PHONE - With the Dec pages in hand - ACT NOW. It is likely best to find an independent insurance company that can write insurance with MANY carriers. Why? Because an insurance company that can write for many [rather than just one] can do the shopping for you and find the very best coverage for the cost. Since the best companies for the money are likely to fill quickly, time is of the essence. Here is the company I chose, personally. The gal I connected with was Sarah - email Sarah here: scornwell@iscf.biz.

STEP 3: COMPARE - When you find the best independent carrier, have them provide 2-3 quotes from different companies they represent. Have them walk through the coverages with you and offer their opinions on which is the best value. Cheapest isn’t always best. You want to gain confidence that they company you are with doesn’t follow State Farm’s lead

The folks at ISCF have put together an informative White Paper about the State Farm pull out. I consider it required reading for any current State Farm policy holder.

Related Articles:

State Farm Announces its Intent to Stop Writing Property Insurance in Florida.

State Farm to Florida Homeowner: No Thanks.

State Farm to exit Florida Property Insurance.

When we hit the day after Thanksgiving, shopping takes over… at least historically nationwide[ surprise!] and, this year, analysts are paying extra attention to sales figures since the news has been so negative about the economy.

Dubbed “Black Friday” in reference to red ink representing loss and black ink representing gain, today’s start to the Christmas [again... I am not afraid to call it Christmas] Shopping season and it is believed to be the day that retailer balance sheets finally cross over to profitability. [I never quite understood why you would stay in a business that wasn't profitable until the 12th month of the year... but... okay.]

But the accounting connotation of the phrase “Black Friday” wasn’t its original usage — it’s a media-coined term.

When the phrase was first used in Philadelphia in 1975, it was in reference to the day after Thanksgiving being the busiest shopping and traffic day of the year.

There’s other Black Friday trivia out there, too:

Did you know? Black Friday is neither the largest, nor the most profitable, shopping day of the year. Contrary to popular wisdom, it’s the 5th biggest, not the first. The two weekends before Christmas are usually the “biggest” series of days.

Did you know? In an attempt to spur the economy in 1939, President Franklin D. Roosevelt proposed to move Thanksgiving ahead by 7 days. 7 more days of shopping, he thought, would help retailers and help the economy. Eventually, the idea dubbed “Franksgiving” failed.

Did you know? To protect competitors from price matching “deals”, some retailers copyright their Black Friday advertising. Others won’t print prices at all.

Did you know? Last year, 14 percent of Black Friday shoppers had made a purchase prior to 4:00 A.M. with an average ticket of $347.

Black Friday is of special significance this year because consumer spending accounts for two-thirds of the U.S. economy. If Americans are shopping in full force, expect economic optimism and a mild rebound in the stock market. Unfortunately for home buyers, this should also lead mortgage rates higher.

By contrast, if sales figures are weak, expect talk of recession to grow.

Sources
Black Friday (Shopping)
Wikipedia
https://en.wikipedia.org/wiki/Black_Friday_%28shopping%29

Geek Trivia: Early bird special
Tech Republic
Jay Garmon, Nov 22, 2005
https://articles.techrepublic.com.com/5100-10878_11-5958978.html

(Image courtesy: Give Congress Back)

Chris Brown All Around Good Guy Trinity Mortgage 153 Parliament Loop #1001 Lake Mary, Florida, 32746	Work: 407 377 0500 x 210 Chris@OrlMtgPro.com www.OrlandoMortgagePro.com