Tighter Lending Rules Coming from Freddie Mac

Freddie Mac, one of the largest sources of home mortgage liquidity today announced changes to their guidelines to their home purchasing policies. With the continued downturn of the housing financial markets, Freddie Mac has decided to tougher the standards of “riskier” loans due to rising delinquencies…click the link below for the full report.

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/27/AR2007022700593.html

In quickly reviewing the new standards, I found that they are similar to the Fannie Mae guideline changes in January.

Here are a couple of the highlights:

1. There will now be a premium paid by borrowers for loans over 80% of the value of the home and with fico scores below 740.

2. 100% programs will be eliminated

3. Borrowers with lower credit scores will now be paying a risk based premiums that will be reflected in the interest rates.

This is yet another blow that consumers will have to weather with the ever changing market.

WHAT CAN YOU DO?

A.  Get your credit scores up…the higher the better.  If you’re not sure of what your credit profile looks like compared to the new guidelines, let us know and we’ll help you…we have a great resource credit scoring resource we can send you for FREE.
B.  Plan ahead.  No longer can you assume that you’re going to qualify just like that for what was “normal” financing.  You will need to meet with a financing professional and map out a plan of attack so you’re not left to take a higher rate than you care for.

C.  Subscribe to a feed so you can stay up to date on the latest changes in the market.  Sure there’s tv and other internet news, but they won’t tell you the intricate details that you need to know.  (our link is on the right side).

I wish I could say that we’re done with the changes, but we, unfortunately are not.  Our goal is to help you navigate these changes and help you apply them to your current situation.

Darrell Evans

4 Guaranteed Tips to Increase Your Fico Score

We’ve been very fortunate in that we have counseled thousands of home buyers and home owners either for purchase/refinance financing and invariably the topic of the credit score comes up.

It will either be the person who has a 723 and are upset that they do not have an 800 or someone who has had a few hiccups and is trying to obtain the best market rate for their home loan.

With so many myths out there about what does or does not increase your fico score, I’d like to give you 5 Keys that guarantee you a higher fico if you behave the way the tips say to behave.

Tip #1 – Keep credit card balances below 30% – (this is the optimum place to be other than paying the card off each month).  Here’s how the credit scoring sees it…the higher the balance, the higher the minimum payment.  The higher the minimum payment the more likely you will not be able to make at least the minimum payment if for some reason you have a financial set back of any kind.  This is probably the most important factor to increasing your fico score and most people I work with have no idea how this works or impact their score or the rates they pay to borrow money.

Tip #2 – Pay off all collection accounts as soon as possible…a collection account can negatively impact your fico score.  One of the most common and frustrating can be medical bills.  I see this all the time…someone comes in and has a medical collection for $54 that wasn’t covered by their insurance or misbilled by the service provider and the client will huff and puff and say “I’m not paying it.”  I say…oh yes you will, in higher interest rate than you’d otherwise be able to get assuming it was paid.

Tip #3 – Do not close credit cards – so many people make this mistake.  The’ve had this one credit card with so and so for 10 years and they open the mail one day and find an offer to transfer the balance to a different so and so for a lower interest rates and some travel mile points.  They then call up the long term creditor and say “na nanny na na” I beat your rate and I want to close the card.  Then “bam” their fico score drops and they have no idea why.  The credit scoring system monitors HOW LONG you’ve had credit as well as if your credit record is good.  By eliminating a card with a long history and add this NEW card, you effectively have just cut down the “length of your credit history.”  Dont do it…if you don’t want the card anymore…cut it up and keep paying the annual fee…you’ll be happier.

Tip #4 – Pay all bills on time.  The credit scoring system does not discriminate on what the amount of the payment was that was late nor the type of account.  If you have a 700 fico today and miss a $20 credit card payment and someone else with the same fico misses a $340 car payment and I pull their credit profiles, neither of them will be happy with their score.

Enough said for this post, but if you have further questions, please don’t hesitate to contact us or comment on this blog.

Use FHA “Streamline” to Lower Your Rate and Payment

One of the most overlooked programs on the market today that can remove hassle and frustration of going through a “normal” refinance is the FHA Streamline refinance. 

On a “streamline refi,” the documentation and underwriting are dramatically reduced and makes for a hassle free experience to obtaining a new lower rate of interest on your home loan…

Here are a few items that you need to qualify…

You must already have an existing FHA loan

You must have been current on your mortgage for the last 12 months

You must be lowering your overall monthly payment and not attempting unless going from a FHA Arm to FHA Fixed

You are not allowed cashout at close of escrow

One of the best features in my mind is that we do not have to pull a credit report on the homeowner and in some cases we do not have to order an appraisal saving you time and money.

I think that with the concern over home values that many homeowners overlook or simply do not even know that this option exist.  It’s a great option and one your should consider if you are looking to refinance and already have a FHA loan.

FHA Loans are Hot!

With the continued turbulence in the financing markets, home loans insured by the Federal Housing Administration are picking up the slack and helping homeowners refinance into lower interest rates helping them keep their home as well as helping home buyers (many who are first time buyer) obtain the financing they need to purchase a new home.

Founded by congress in 1934, the FHA became part of the Department of Housing and Urban Development’s Office of Housing (HUD) in 1965.  The FHA program which for the last 5-10 years took the back seat to the emergence of the mortgage products that have now imploded, has insured more than 34 million properties and may very well be the best loan programs available today. 

Why is this program hot in my mind:

1.  Financing up to 97% (3% down on purchases)

2.  No Credit Score Required (don’t confuse with bad credit)

3.  Flexible underwriting guidelines

4.  Can qualify if you’ve had a BK over two years ago

5.  No qualifying Streamlined Refinances

Not sure if it’s for you…ask us and we’ll let you know. 

Ouch…When being #1 isn’t the best

For those of you who don’t know…our company is located right here in the city that never sleeps and where what happens here stays here…you know it as Las Vegas.

We used to be in the headlines for the city with the phenomenal growth rate and unprecendented housing appreciation rate – well check this out and you’ll know what I mean…

http://money.cnn.com/2008/02/05/real_estate/zip_code_foreclosures/index.htm?postversion=2008020515

OUCH…OUCH…OUCH

and believe it we feel it…

you mights say we had it coming…you might say we needed the correction…you might say you could care less

what you should be saying though is “IT’S A GREAT TIME TO BE PURCHASING A HOME IN LAS VEGAS”

Prices have not been this low since before 2003 and with the right agent on your side, you can practically steal a home.

With rates being in great shape, there are over 23,000 opportunities to find a great home in Las Vegas, whether it’s for primary residence, second home or (I’ll be careful here…) Investment.

What’s going on in your area?

Did your city make the list? (let’s cry together)

take care,

darrell

Mortgage Rates Rise on FED Speech Before Congress

So many people misunderstand what happens to mortgage rates when the Federal Reserve lowers or increases the fed funds rates. Our phones have been blowing up with homeowners who are looking to improve on their 5.00%-6.00% interest rate they obtained a couple of years ago…well here’s the truth, when the FED speaks or changes rates, mortgage rates often move the other direction.

Bernanke(Fed Chairman) and Paulson(Treasury Secretary) spoke before congress today

http://money.cnn.com/2008/02/14/news/economy/bernanke_paulson/index.htm

and it was a bad day for mortgage backed securities…This was the 6th day in the last 7 that mortgage rates have crept up after the FED lowered the fed funds rate by a total of 1.25% in January.

If you’ve been holding out for rates to drop…don’t bet on it. With the Fed Chairman saying today that the US economy is likely not to enter a recession, there’s no real reason for rates to drop any further.

If you’re looking to consolidate debt, lock in your adjustable rate mortgage into a fixed rate or get new financing for a new purchase…don’t wait!

Happy New Year 2008 and Welcome to the Equity Wealth Report

Welcome to the Equity Wealth Report. It’s exciting to embark on this new project and being able to join the blogging world as well as the exciting world of the new internet. As silly as it may sound, we really didn’t participate in the old internet and this looks like a lot more fun anyway.

So if you’re new here, let’s talk about what you’ll find in the coming weeks, months, years and also what you will NOT find posted here.

Goal of this blog – The overall goal of the posts here will be to provide homeowners, investors, first time home buyers and the general consumer clarity, confidence, direction and peace of mind. A second goal will be to empower people in the area of becoming financially free through strategic real estate ownership and financing strategies. We believe the consumer not only wants, but demands…

truth

honesty

&

integrity

when making financial decisions around the largest purchase of their lives and we hope to bring that through this blog, our company and events.

We will continue to add posts that help educate…We want this to be a financial gymnasium that is open 24/7 so that when you need to get financially in shape around the topics we’re covering or you need to break through a barrier that might be holding you back, we hope you can find it here. We will not be a news source…there are many of these. If we blog on a news source, we will add strategy tips and advice to help you position yourself to be protected.

Our goal is to dramatically impact lives by destroying the many myths/lies that keep people in bondage. We want to raise the financial IQ of our subscribers and help you to bring increase into your life and put a strangle hold on lack.

Along with our contributing writers, we will bring new strategic messages of wealth creation that foster choice and control over your money, wealth, mortgages, and other financing instruments teaching time proven banking principles to help you increase your cash flow, improve your financial safety, catapult your overall investment rates of return all while minimizing your risk and high interest expenses.

We’ve served a couple thousand off line in our real estate and mortgage businesses since 1992 and we look forward to serving you, be it one or a million who may follow this. Let us know what you want and we’ll do our best to provide it for you or have one of partners add it so it can sow a great seed in your life.

We want you to receive all of the value…this is not about us.

If you have something to share that adds value, add it. If you have a topic that we’re not covering and want to be a contributing and would like to be a contributor to this blog, contact us…we welcome you.

If you disagree with our point of view, well that’s not against the law either, make a comment. If you agree or you find it help, let us know that too. However, if you are an eternal pessimist, a habitual complainer, one who is looking for a place to whine or play the blame game…this is not the blog for you.

We want a community of like minded people who are moving forward, seeking answers and believing that the best is yet to come, no matter what it looks like right now.

Future posts will not generally be this long, but we wanted to say HELLO and Welcome…Talk to you again soon -

Darrell & Lizette