Closing Chaos

How to improve your credit score

These fixes will help you get better rates

A credit score tells lenders whether you're a safe bet when it comes to trusting you with credit. The number is an indicator of whether you pay bills on time and whether you have outstanding debt, so it helps lenders determine whether you qualify for a mortgage, credit card or loan, and for how much. We'll show you how to obtain your score and improve it so that you can get the best possible rates.

How your credit score is calculated

You actually have three credit scores, one for each of the three credit bureaus: Equifax, Experian and TransUnion. Each score is based on that particular bureau's information about your financial history, and as that info changes, so does your score.

Credit scores are also called FICO scores, because the scores are usually generated by software developed by Fair Isaac and Company. FICO scores have different names at each of the three credit bureaus, but they're developed using the same method.

Credit scores are calculated with information from five categories:

• Payment history (35 percent). If you've paid bills late, had an account in collection or declared bankruptcy, your credit score has taken a serious hit. Recent problems have greater impact than older ones.
• Amounts owed (30 percent). This area accounts for how much debt you have, what kinds and how close you are to your credit limit.
• Length of credit history (15 percent). Older accounts improve your score, because they indicate that you've been able to maintain good standing.
• New credit (10 percent). Opening a number of new accounts in a short time frame may decrease your score.
• Types of credit used (10 percent). Having a few different types of accounts (credit cards, retail accounts, installment loans, mortgages) has a positive affect on your score.

What's a good score, anyway?

Credit scores range from 300 to 850, and any score above 720 is considered a good score. If you have a score of 740 or higher, you will qualify for the best rates. On the other hand, if your score is 619 or lower, you will have a difficult time getting a loan or credit card, and if your score is below 559, it is unlikely that you will qualify for a loan.

Scores can vary from agency to agency, based on whether the information they have collected about you is complete and accurate. If there are varying scores, a lender will usually go by the middle score.

How do I find out what my credit score is?

Once every 12 months, you are eligible for a free copy of your credit report from each of the three national consumer reporting agencies. These reports show whether you pay your bills on time, have filed for bankruptcy and even whether you have been sued or arrested.

While you're entitled to free credit reports, you'll have to pay to find out your credit score. You can order your score from each of the three reporting agencies' websites.

To bump up your FICO score, try these tips:

• Dispute incorrect information in your credit report. If you find errors, complete the dispute form included with your report or write a letter to the reporting agency. In your report, identify the mistakes and clearly state why they are incorrect. Send photocopies of your report with the mistakes circled, and include copies of documents that support your argument.
• Pay your bills on time. Delinquent payments make a big dent in your score, so do whatever it takes to make sure that you pay your bills on time. Set up automatic debits and payment reminders so that you don't miss another due date.
• Minimize your debt. Pay off your debt as quickly as you can. Keep balances on credit cards as low as possible and pay off the debt, rather than transferring balances from card to card.
• Settle any debt in collections. Contact the collectors to negotiate a pay-off settlement. Make sure you receive the collector's agreement in writing before you send in any payment.
• Recognize that negative information will stay on your report for a while. Most negative information, if it is accurate, stays on your report for seven years. The exception to this rule is bankruptcy, which remains for 10 years.

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HAPPY FATHERS DAY!

THE HOME SELLING PROCESS - A VISUAL GUIDE

 

 

Escrow, step by step.

The first step in the home buying process is for you to get approved for a home loan.

 

After finding a property that interests you, I will show you the comps (comparable sales) to help us determine the value of the property. The best comps are in the same building (if a condo/townhome) or in the surrounding area (if a single family home or income property).

 

 

Appraisers are generally required to focus on the past 6 months when reviewing area sales so I try to do the same when verifying the property’s value.

 

At this point we are ready to make our offer, which will consist of 4 separate items:

1. The offer contract itself. It is written on a standard California Association of Realtor’s contract, which I complete and then review with you either in person or over the phone. I offer my clients the option of signing electronically, which can save a lot of time and paperwork hassles.

2. A pre-approval letter from your lender (let me know if you would like me to e-mail you contact information for the local lender that my clients most highly recommend).
3. Verification of funds (copies of bank and/or investment statements showing liquid funds to cover the down payment and closing costs).

4. Buyer’s intro letter. This explains who you are, what you do and what you like about the property. I usually write about 95% of this letter for you and then e-mail it to you for final editing and approval.

The offer is presented to the sellers and we wait for their response. Often times they may not sign off on our offer initially but instead write a counter offer which addresses items in the contract that they would like changed (price is the item that is countered most often). It may take several counter offers before the price and terms are agreeable to both parties.

After the offer is accepted, escrow is opened. Escrow is a neutral 3rd party and their job is to make sure all obligations of the contract are fulfilled before the seller gets their money and the buyer gets keys to the property. The most standard escrow length is 30-45 days.

 

I will send a copy of the completed contract to the lender and you will need to promptly provide them with any additional information and/or paperwork that they require. The lender takes care of scheduling the appraisal.

You will schedule the physical inspection with an inspector of your choice. I can give you a list of inspectors that my clients have been very happy with. The physical inspector checks all the major systems in the property (plumbing, electrical, heating, etc) and also looks for cosmetic damage and problems (sloping floors, doors that stick, cracks in walls/ceilings, etc). For a condo/townhome inspection, the inspector only inspects the unit and not the common areas (building, hallways, pool, etc) but if you are purchasing a home the inspection will also check out the exterior (roof, foundation, garage, etc.). I recommend that my clients always get a mold inspection done and if the property has a fireplace then you should also have that inspected. Whenever purchasing a single-family home it is very important to have a sewer inspection. Geotechnical inspections are especially important if you are buying a home in a hillside area. You can also schedule additional specialty inspections if you would like. After reviewing all inspection reports we will usually complete a Request for Repairs form (asking for a credit and/or repairs)… depending on what was found in the inspections.

You will also need to call an insurance company to verify that the property is insurable and get quotes for the cost of insuring the property. For a condo/townhome you are generally just insuring your personal contents (the building is almost always insured by the Homeowners Association).

The other inspections that take place during escrow include the termite inspection, which is usually paid for by the seller. A retrofitting inspection will also take place to make sure the property is up to code with smoke detectors/carbon menoxide detectors, water heater strapping and the gas shut-off valve (retrofitting requirements vary from city to city).

If the property you are purchasing is a condo/townhome, you will receive copies of all the homeowner’s documents to review. You generally have 5 days to review this paperwork which includes: copies of the meeting minutes for the past year, budget and financial information (including the amount currently in the HOA reserves) and a copy of the CC&R’s (Covenants, Conditions and Restrictions).

Loan docs are usually signed as early as a week prior to closing.

Five days or less prior to closing we do a walk-thru of the property. This gives us a chance to verify that any seller repairs were completed and we also make sure the property is in the same condition as is was when we initially wrote our offer.

Two days prior to closing you wire any additional down payment & closing costs to escrow. The loan proceeds are wired to escrow one or two days prior to closing.

On closing day we wait to hear from the title company that you are listed on the county records as the new owner and then you get keys to your new home.

 

 

 

 

MVP REAL ESTATE GROUP CLOSES ANOTHER DEAL!

MVP REAL ESTATE GROUP just closed on this fabulous home, representing the happy buyer!

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