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18

September

Understanding Your Credit Score

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As you probably know, your credit is an important factor when determining your eligibility for a home loan. It is also a factor that will help determine your interest rate for a home mortgage.

Being “in the know” about your credit is important. One of our experienced Mortgage Consultants can counsel you about your credit score. The first step is to fill out an application. When the application is complete, they can pull credit. This score will allow them to talk you through specifics regarding your loan status eligibility and potential interest rates.

If your credit score is not where it needs to be, one of the First Class Mortgage Consultants can give you steps to take to build your credit. They can also suggest a time frame of when you could potentially check back in and re-evaluate your score and eligibility.

Information to keep you “in the know”:
Your FICO credit score takes five things into account. Here is the break-down of those five areas:CREDIT PIE CHART

•  35% Payment History – payment patterns of debts
•  30% Amount Owed – If what you currently owe is reasonable for your credit profile
•  15% Length of History – The average age of all your accounts
•  10% New Credit – How much new credit you have to your name
•  10% Types of Credit Used – How many types of accounts you have (loans, credit cards, etc.)

What your score means to lenders:credit score scale updated

•  Excellent (800 or Higher): Applicants with scores in this range are at the top of the list for the best rates from lenders.
•  Very Good (740–799): Applicants with scores here are likely to receive better than average rates from lenders.
•  Good (670–739): Only 8% of applicants in this score range are likely to become seriously delinquent in the future.
•  Fair (580–669): Applicants with scores in this range are considered to be subprime borrowers.
•  Bad (579 & Below): Credit applicants may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all.

APPLY TODAY to get started on your pre-approval and credit evaluation.

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12

September

Equifax Data Breach: What should you do now?

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Last week, credit-reporting bureau, Equifax, confirmed a massive cyber security incident, which potentially compromised the personal information of about 143 million U.S. consumers.That means that the chances you are affected are pretty high.

Equifax, one of the three major credit bureaus, lost control of customer data that included Social Security numbers, home addresses, credit card numbers, drivers license numbers and birth dates.

WERE YOU AFFECTED?

Even if you don’t think you’re a customer of Equifax, there’s a strong possibility they still have your data. As a credit reporting agency, Equifax gets information from credit card companies, banks, lenders, and retailers to help it determine a person’s credit score.

To find out if your data has been compromised, use the Equifax Impact Finder. There have been reports that this tool is less than accurate, so at this point, we suggest that any person with a credit history take action as if they were affected.

WHAT SHOULD YOU DO?

  • CHECK YOUR CREDIT REPORTS: You can view your credit reports for free at AnnualCreditReport.com. You’re entitled to get a free copy of your credit report from each of the three big agencies once every 12 months. Review it closely for unauthorized accounts or any mistakes.
  • FREEZE YOUR CREDIT: One of the most reliable ways to prevent someone from opening credit cards in your name is to place what’s called a “credit freeze.” A freeze stops thieves from opening new credit cards or loans in your name, but it also prevents you from opening new accounts. So, each time you apply for a credit card, mortgage or loan, you need to lift the freeze — with the PIN you got when you froze your credit — a few days beforehand. To freeze your credit, contact each of the credit bureaus using these phone numbers:

•  Equifax: 1-800-685-1111
•  Experian: 1‑888‑397‑3742
•  TransUnion: 1-800-680-7289

  • SET A FRAUD ALERT: A fraud alert is another way to make it hard for identity thieves to open accounts in your name. When you set a fraud alert, credit card companies will be required to verify your identity before opening an account. That, combined with the credit freeze, is a great way to keep your credit secure. To set a fraud alert, contact just one of the credit card bureaus and ask for an initial fraud alert. Once the alert is in place, it will last 90 days. After that, you’ll have to renew it. Here are the appropriate phone numbers for the bureaus (remember, just call one):

•  Equifax: 1-888-766-0008
•  Experian: 1-888-397-3742
•  TransUnion: 1-800-680-7289

  • STAY UPDATED: Equifax has created resources to assist consumers. These include online information at www.equifaxsecurity2017.com and a call center at 866-447-7559.
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03

August

Should You Refinance Your FHA to a Conventional Loan?

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If you are like most first-time homeowners, your first mortgage was an FHA loan. Your FHA loan gave you the ability obtain financing, requiring only minimal down payments and fair-to-good credit scores. While this was a perfect fit for you at the time, you now may be looking to save some money. One way to do this is to refinance into a conventional loan.

One significant advantage of switching to a conventional loan is that, with the right loan-to-value ratio, it can eliminate mortgage insurance. While conventional loans have stricter credit requirements, and typically require borrowers to have at least 20% equity in their homes, any mortgage insurance provision cancels once your house reaches a 78% loan-to-value ratio.

Additionally, refinancing to a conventional mortgage may allow you to take out a larger home loan.

Refinancing does come with costs, such as closing fees, and may require you to present many of the same documents during the application process as you did with your original home purchase. Plus, you may also need to pay for an appraisal of your home.

Checklist: When Is a Good time to Refinance from an FHA to a Conventional Mortgage?

If you’re still not sure whether you should refinance from an FHA loan into a conventional mortgage? Take a couple of minutes to answer the following questions. They can help you decide if a refinance is right for you.

1. What are my goals?

2. Does refinancing make financial sense?

3. What is the current value of my home?

4. What is my existing home equity?

5. Can I afford the refinancing closing costs and fees?

6. Can I provide all of the necessary documentation?

Considering a Refi? Let us help!
Our expert mortgage consultants can help you evaluate your current loan situation and help you identify if a refinance is right for you. Give us a call today!

Source: PennyMac, Link

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21

July

6 Ways to Save on Paint Projects

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paintDon’t let the high cost of paint discolor your renovation plans! Paying more for paint doesn’t necessarily guarantee you’ll get better quality, better colors or better coverage. Plus, you have a whole slate of opportunities to save.

Calculate the coverage. To prevent buying too much paint, retailer and manufacturer websites offer online calculators. Determine how many gallons will be required for the linear footage you want to paint and the number of coats you plan to put up.

Take it online. Follow manufacturer and home improvement retailer social media accounts and websites for coupons, rebates, and news about sales.

Make it monochromatic. Using a single color throughout your home can save lots of money. A five-gallon container of paint is usually significantly less than five single gallons. Keep one color from getting boring by using pops of color in your decor.

Optimize the oops. “Oops” or “mis-tints” are containers of paint that have been returned by other customers and are often heavily discounted. If you find a great color but only a gallon is available, buy a second at regular price and mix them at home to achieve consistent color.

Wait and save. The week before a three-day holiday weekend is often a good time to buy paint on sale as retailers anticipate holiday home improvements.

Can the primer. While some contractors like to use a primer, many self-priming paints have improved enough to skip the priming process.

Homeowners starting summer renovation projects that require a do-it-yourself paint job will want to keep these money-saving tips handy.

Sources: Consumer Reports, The Spruce

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10

July

Q&A: Mortgage Insurance

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couple celebrating new home handing keys and moving boxes

Question: What is mortgage insurance and how does it work?

Answer: Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get.

Typically, borrowers making a down payment of less than 20 percent of the purchase price of the home will need to pay for mortgage insurance. Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get. But, it increases the cost of your loan. If you are required to pay mortgage insurance, it will be included in your total monthly payment that you make to your lender, your costs at closing, or both.

There are several different kinds of loans available to borrowers with low down payments. Depending on what kind of loan you get, you’ll pay for mortgage insurance in different ways:

If you get a conventional loan, your lender will arrange for mortgage insurance with a private company. Private mortgage insurance rates vary by down payment amount and credit score but are generally cheaper than FHA rates for borrowers with good credit. Most private mortgage insurance is paid monthly, with little or no initial payment required at closing.

If you get a Federal Housing Administration (FHA) loan, your mortgage insurance premiums are paid to the Federal Housing Administration (FHA). FHA mortgage insurance is required for all FHA loans.  It costs the same no matter your credit score, with only a slight increase in price for down payments less than five percent. FHA mortgage insurance includes both an upfront cost, paid as part of your closing costs, and a monthly cost, included in your monthly payment.

If you don’t have enough cash on hand to pay the upfront fee, you are allowed to roll the fee into your mortgage instead of paying it out of pocket.  If you do this, your loan amount and the overall cost of your loan will increase.

If you get a US Department of Agriculture (USDA) loan, the program is similar to the Federal Housing Administration but typically cheaper. You’ll pay for the insurance both at closing and as part of your monthly payment.  Like with FHA loans, you can roll the upfront portion of the insurance premium into your mortgage instead of paying it out of pocket, but doing so increases both your loan amount and your overall costs.

If you get a Department of Veterans’ Affairs (VA) loan,  the VA guarantee replaces mortgage insurance and functions similarly.  With VA loans, there is no monthly mortgage insurance premium. However, you will pay an upfront “funding fee.” The amount of that fee varies based on:

• Your type of military service
• Your down payment amount
• Your disability status
• Whether you’re buying a home or refinancing
• Whether this is your first VA loan, or you’ve had a VA loan before

Like with FHA and USDA loans, you can roll the upfront fee into your mortgage instead of paying it out of pocket, but doing so increases both your loan amount and your overall costs.

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