Archive for July, 2008
Now it’s Official - President Bush signs the Housing and Economic Recovery Act of 2008!
President Bush signed the Housing and Economic Recovery Act of 2008 into law this morning. With about 700 pages in this bill, it covers a lot of ground but here are some main points homeowners, home buyers and anyone interested in mortgages or real estate will want to know.
Falling Mortgage Rates Fail to Spur Home Loans, FHA Loans Should Help
Long term mortgage rates fell last week but a report issued by the Mortgage Bankers Association showed the number of people applying for a home loan plummeted 14.1% for the week ending July 25.
Update on the Housing and Economic Recovery Act of 2008 – It’s Almost Official!
Any day now the President is expected to sign into law the Housing and Recovery Act of 2008. There are big changes in store with the passage of this act, changes which have the potential for sweeping effects across the mortgage and real estate industries.
Down Payment Assistance Programs May Go the Way of the Horse and Buggy
Congress and the President are very close to agreeing on and passing the Housing and Economic Recovery Act of 2008. This is likely good news for the real estate and mortgage markets across the country. However, down payment assistance programs are under consideration for being discontinued. This is bad news and something that will likely hurt consumers looking to buy homes and invest in communities.
How to understand credit reports and scores
Lenders look at your credit report every time you apply for credit, but many people don’t know what their credit score is or how the score is calculated. Hopefully, if you are a regular reader, you are on the up and up! But here is the low-down on how it works behind-the-scenes before we give you your free credit report and score here on Quizzle.
Really, what is a credit report?
A credit report is a document that lenders use to assess a person’s credit risk. It shows your payment history, the amount of money owed, the types of credit in use, the proportion of balances to credit limits, delinquencies and public records including bankruptcies and foreclosures.
So what’s in there and what determines your credit score?
Your credit score is a numeric representation of your financial responsibility, based on your credit history. Your credit score is determined by several factors:
- Payment History: One of the biggest factor in determining your credit score. It shows whether you’ve paid your accounts on time and whether you’ve been delinquent in making any payments. It also shows if you’ve ever filed for bankruptcy or been foreclosed.
- Amounts Owed: This is another big factor in determining your credit score. Having credit accounts and owing money doesn’t mean you’re a high-risk borrower. But owing a lot of money on several accounts might suggest you’re overextended, and thus a higher risk.
- Length of Credit History: Generally, having a longer credit history is better than having a short credit history. Lenders need to see that you can manage your credit accounts responsibly over time.
- New Credit: Opening several new credit accounts in a short amount of time can be viewed as a higher credit risk.
- Types of Credit in Use: This includes credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.
Misconceptions About Credit Scores:
Some people think that they can’t get a mortgage because their credit score is too low. Actually, this isn’t necessarily true. Some mortgage lenders offer loans designed for people with credit problems. More specifically, FHA is touted as one of the most flexible mortgage when it comes to credit and income
It is also a misconception that paying off a delinquency can raise your score. Since delinquencies stay on your report for years, so this isn’t entirely true. Delinquencies are viewed as a weak commitment to paying off your debts. Though, provided your recent payment history is better, those past delinquencies will bear less weight over time. And you should always pay your delinquencies or make every effort to avoid them altogether.
The Consumer Federation of America and Fair Isaac Corporation conducted a study and found that nearly 45% of respondents think that making more money will improve their credit score when, in fact, your credit score is not determined by your income, but by the factors listed above.
Understanding what a credit report is and how your score is determined is a good first step towards improving your credit. To get a better picture of how your credit stacks up, make sure you’re utilizing the free credit report and score from Quizzle.
For any specific questions about your credit or if you’d like us to post about a particular topic, just hit us up! Blog@Quizzle.com
Existing Home Sales Drop to 10-year Low
Month-over-month sales of previously owned homes, including single-family homes, townhomes, condominiums and co-ops, fell 2.6 percent in June, according to the Existing Home Sales report issued today by the National Association of Realtors (NAR).
Mortgage Activity Slows in Latest Application Report Despite the Ease of Securing FHA Loans
This morning the Mortgage Bankers Association (MBA), in its Weekly Mortgage Applications Survey for the week ending July 18, announced that mortgage loan application volume dropped 6.2 when compared to the week prior. The number of people applying to refinance their existing mortgage dropped, as did the number of people applying for a mortgage to purchase a home. FHA loans, which for months have been the star of the MBA report posting large week to week gains, also saw a pull-back of 7.7 .
Selling Your Home: The Answer’s Right Under Your Feet
Consider this: What we homeowners love about our homes… others may see, hear and even smell differently. But who has the budget for a complete remodeling overhaul? Here’s your solution: Using the furniture you already have to stage your home can make as much of an impact on buyers as remodeling. And the difference in savings is significant.
What is the housing stimulus package?
Even with Presidential veto threats looming, the housing stimulus package has taken another necessary step to being implemented – it has taken on another round of changes, passed the Senate, and is on its merry way to the White House again.
The package goes by a few different aliases, all hoping to do the same thing – give the US economy the kick in the pants it needs. According to GovTrack.us, the stimulus package includes the following ideas/titles:
- Foreclosure Prevention Act of 2008
- Building American Homeownership Act of 2008
- FHA Manufactured Housing Loan Modernization Act of 2008
- FHA Modernization Act of 2008
- Mortgage Disclosure Improvement Act of 2008
- REIT Investment Diversification & Empowerment Act of 2008
While diversifying and disclosing is all well and nice, what does the housing stimulus package mean for you? More stimulus checks? Not quite. Tax breaks and tax rebates? Maybe.
So what the heck do 631 pages of super fun bill writing include? We did the research so you don’t have to! Here are the highlights:
- We all know conventional and FHA loan limits have been raised through 2008. Currently set to expire on New Year’s Eve (no toast for that), the housing stimulus package includes plans to keep them higher than they were in years past – it’s likely to be somewhere around the $700,000 mark. This means lower rates on bigger loans.
- Tax credits for “first-time home buyers” – it’s in quotes for a reason. This group is defined to include actual first-time home buyers and buyers who have not owned a home for at least three years. The tax credit for those buyers can be up to $8,000.
- A property tax reduction for American homeowners—$500 for single filers and $1,000 for joint filers—for the 25+ million homeowners who pay property taxes, but choose not to itemize their deductions.
- What about homeowners already in distress? They’re covered, too – the FHA is working on programs, including FHA Secure, to assist homeowners currently behind on their mortgage and for those who currently owe more than their home is worth. It could help up to 400,000 homeowners potentially facing foreclosure.
- And for the lenders? Better disclosure with regards to the potential changes in mortgage payments during the loan’s lifetime. The information will need to be provided at least seven days before closing.
Those are really just the high points of the housing stimulus package. While controversial, Congress has taken ample time to discuss, re-write and re-discuss the bill. It’s coming to the point of fruition – will President Bush sign or not? If he doesn’t, the fact remains that Congress could be so united in the housing stimulus package that they will override him. And in this election year, it’s likely that the Bush Administration may pick up their pens and sign.
If you have questions about refinancing or buying a home or would like to see us write about a particular topic, e-mail blog@quizzle.com.
Who Are Fannie Mae and Freddie Mac and Why Should You Care?
Though Fannie Mae and Freddie Mac may have silly names, they're all about the serious business.