Even though FHA Assistant Secretary Brian D. Montgomery laid out a clear plan for evaluating folks who have little to no credit history - he also identified what the BEAR BONES MINIMUM standards are.
If you have nothing but “Group 2 References,” Then you can have no more than ONE thirty day late (1 x 30) on any payments and you can not have any collections or liens in the last 12 months.
HUD has a new initiative, and it’s being pushed along by the New Housing Bill passed by Congress this month!
If you do not have a credit history with at least three credit references over a period of 12 months, we might not be able to help you - but if you have ANY credit - we probably can help you purchase a home.
FHA wants you to have “credit” with one of these two types of references:
Group 1:
rental payements for housing, utility companies including gas, electricity and water, traditional land-line home telephone service, cable. “If the borrower is renting from a family member, request Independent documents to prove regularity of payments, such as cancelled checks.”
Group 2:
insurance coverage that’s not payroll deducted (like life insurance or renter’s insurance or car insurance), payment to child care providers that are businesses, retail stores, furtnitures or rent to own, payment of the part of medical bills not covered by insurance, CELL PHONE BILLS, automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments.
So if you are in the “Building” credit stage of your life - GOOD NEWS! You can start BUILDING CREDIT BY PURCHASING A HOME - and you could get $7500 back from Uncle Sam!
If you are considering a home purchase in Wake County, or buying a home in the Triangle, please call Steve and Eleanor Thorne, Meridian Residential 919-459-1313
Are you dreaming of a new truck? Well, you’re not alone… but be careful who you borrow from!
If you go to Beneficial, or Wells Fargo Financial (both fine companies) you will not really help your score. In fact, if you have a loan with them, like I do, you want to pay a little extra every month and get that debt paid off. Not only are the interest rates higher - they do not have as good a “rating” with the scoring engines.
Now to get the best score, you want to have some revolving credit, and some installment loan credit. So if you ONLY have credit cards - then getting an installment loan is GOOD! Just be careful where you get that loan from!
If you are considering a purchase in Raleigh or buying a home in Cary, call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313.
Did you hear about the “Big Meltdown for Bigfoot Claim?” Apparently some fella’s in Georgia said they’d seen Bigfoot, and they were paid loads of money for the pictures! These are the same boys who, according to their telephone message also look for lephrachans… IMAGINE, it’s not true???
Well, someone made a comment on one of my posts to the effect that “they’d just read a different post with the same title that had completely different information!” Good news is they thought I was right!
Just for the record… this is not the “Big Foot” site. I’m shootin’ straight with you. We are still doing refinances, and cash out refinances, but you need equity in the property (at least 7%) and you need a job, and you need decent credit.
Now - why the arbitrary 7%? Well, this is just a benchmark number. There are a TON of IF’s.
IF you are refinancing a government loan (FHA, VA, USDA) then we don’t need this much (and your score can be down around the 600 mark).
IF you are refinancing from an Adjustable Rate (Conventional or SubPrime) then we MIGHT be putting you into a FHA loan - so we might not need this much equity…
Either way - it’s going to cost you about 2% to refinance. So if it’s a Conventional loan (no money back to you) and you’re just doing what’s called “in the Biz” as a Rate/Term (meaning no money back to you - just refinancing to change the length of the loan, title, or rate or term of the loan) you need 5% equity in the home, and if you’re “rolling in” the closing costs that’s another 2%… so figure you need about 7% equity in the home.
If you are considering a refinance or a purchase in NC or Virginia, please call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313.
With the economy being what it is… I guess more people are considering divorce. I haven’t seen a “headline” 
about it, but we’re certainly getting calls! If you’re in that boat, my heart goes out to you… and I have some things you should be considering.
Normally, folks refinance their home to get a better rate, or to go from an adjustable rate mortgage to a fixed rate… or to renovate their home. If you’re considering a divorce, I guess you would fall into the “renovation” part!
As part of this “project” you have to decide if it makes more sense to sell the home and start over - or refinance and get the other person off the mortgage. It critical that you pay attention to this… quick claim deeds do NOT relieve both parties from the NOTE (the obligation) on the home. If you’re the one “leaving” the property - you do NOT want to leave this to chance (I’m not an attorney - this is just my humble opinion). We’ve talked to many people (one sweet lady this week), who have a spouse that Quick Claim’s them off of a property… that’s great… but it doesn’t mean you’ll qualify for a new home, because you are STILL OBLIGATED ON THE NOTE. What if the “schmuk” you’re leaving doesn’t make the payments? Yep, they’re going to coming looking for you and your credit report. Okay, so I’ve said enough about this.
If you’re the one in the house, and you’re trying to determine if you guys should sell or refinance, draw equity out and refinance the other person off the loan (I’m hoping that makes sense), then consider these steps…
$$ Pre-settlement analysis:
This is when you should take a hard look at your credit… is your score over 700? If not, a cash out refianance might not be feasibile. You might be able to do it - but your rate might not be the best. Call us, and we can take a peak at your score. Also - do you know what your homes worth? Get an “educated,” professional opinion, don’t rely on Zillow. (again, this is just my advice). An appraisal will cost you $350 or so, depending on how big the McMansion is.
$$ Refinance:
Okay - so assuming you have a good credit score (Hat Tip! Congrats! You’ve got that goin’ for you!) let’s look at the “finances” of removing a spouse’s responsibility from the mortgage note, and divide equity in the home during settlement.
I found a pretty cool site that’s dedicated to Divorce, maybe it will be an additional resource for you!
If there’s anything we can do to help you with a refinance or purchase anywhere in NC or Virginia, please call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313.
And one more thing… keep your chin up… as my friend told me recently, “If He brought you TO IT, He’ll bring you THROUGH IT!” 8o)
The answer is maybe. If you are looking for a “rate term” meaning no cash out - and you haven’t missed any mortgage payments in the last 12 months and you think you have at least a 600 credit score - call me. We can possibly figure this out.
If you are getting a divorce - and you have never worked, and you need to use the alimoney your spouse is SUPPOSE to start paying you in September to qualify for a home… well, call me… because we need to talk about how this is going to work and what documentation we are going to need.
Every situation is different… don’t GIVE UP before you ASK US what we can do. Just be realistic, and know that in most cases, cash out - unless you have really good credit scores, documentation and equity in your home, is a difficult loan to close right now. That doesn’t mean we are not doing them - it just means you might as well load up the suitcase with documentation, cause we’re gonna to need it!
If you are considering a refinance, please contact Steve and Eleanor Thorne, Meridian Residential, 919-459-1313
Freddie Mac and Fannie Mae (now commonly written as F/F) are making the bar a little higher if you’ve had a Foreclosure. This is obviously driven by the number of folks who have filed bankruptcy - and the changes go into effect August 11, 2008 for Conventional Loans.
“We are updating these requirements as well as establishing new requirements for bankruptcy and pre- foreclosure sales. We are updating the requirements regarding the time period that must elapse before borrowers can demonstrate that they have re-established their credit history following an occurrence of a bankruptcy or foreclosure.”
Additional requirements for those who have had Forclosures now apply after 5 years up to 7 years following foreclosure completion date:
· The purchase of a principal residence is permitted with a minimum 10% downpayment and a minimum credit score of 680
· Purchase of a second home or investment property is NOT permitted.
· Limited cash-out refinances are permitted for all occupancy types.
· Cash-out refinances are not permitted for any occupancy type.
If you can prove extenuating circumstances involving the foreclosure, these rules apply:
Additional requirements now apply after 3 years up to 5 years following foreclosure completion date:
· The purchase of a principal residence is permitted with a minimum 10% downpayment.
· Limited cash-out refinances are permitted for all occupancy types.
· Cash-out refinances are not permitted for any occupancy type.
The question from the above guideline is… what’s the difference between a “limited” cash out refinance and a “straight-up” (?) cash out? As you can see, these guidelines are difficult to read across the board. Bottom line is that if you have a foreclosure on your credit report - it will be a minimum of 5 years before you can purchase another home… and that’s calculated from the date of the sale.
These guidelines are CONSTANTLY changing though, and it is VERY possible that 2 years from now, they will change again… so our advice is that you pick yourself up, dust off your credit, pay your bills on time and SAVE MONEY. Eventually, Uncle Sam is going to want you to buy a home again, and this time, you want to be ready!
If you are considering a purchase in Cary, or buying a home in Raleigh, please call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313
What’s a trade line??? It’s a line of credit that is (preferrably)reported to all three credit bureaus.
Credit cards, Car Loans, Personal Loans from finance companies are all tradelines. Some are better than others - for instance, personal loans from Beneficial will not help you get the highest score. A loan with Best Buy is easier to get than one at Bank of America. This means that if you have poor credit - apply for cards at chains like Best Buy and Jewelry stores. If you have GREAT credit - these are the ones that you want to pay off and stop using!
If you do not have credit - you want to apply for an FHA loan and use your cell phone company and insurance as “non-traditional trade lines.”
Considering a home purchase - please call Steve and Eleanor Thorne with Meridian Residential 919.459.1313
This not the picture you want of your door. If you are in the midst of a seperation or divorce, and money worries are among the top reasons marriages fail - the last thing you want to see on your door is this.
Because this is what foreclosure looks like.
There are somethings you can do, as you argue your way towards selling the house:
The problem is when folks do NOT talk to the mortgage company… and this could be difficult if you are in a divorce… because you might, or might NOT be on the note! If you are going through a seperation or divorce, make certain you have the account number and contact information for the mortgage lender. Contact them and be certain that taxes and insurance are up todate and current. Don’t let your good credit be destroyed because someone else is not willing to pick up the phone and face the problem.
A foreclosure will drop your credit score by 200 to 300 points. So if you have a 620 score, and that property goes into foreclosure, you are looking at a 320 score.
Once a Notice of Default is filed - your options are pretty much gone. Do not sit on an overpriced house and let it go into foreclosure. It is much better to get no cash in the sale of a property than to face foreclosure and 320 credit score!
Are you thinking about fixing your credit all by yourself?
That’s cool. If you are considering a mortgage, then we’ll be glad to help - but if you want to do it yourself, you might want to check these free sites out!
The Federal Trade Commission has an aritlce Credit Repair: Self Help May Be Best. It’s a nice form letter - but I don’t think it really “hits” on all of the unique situations I’ve seen.
The first thing I suggest is making a copy of your social security card and your driver’s license - include those copies with your letters to the credit bureaus. If you want to view some other letters, try these two FREE places:
and this is free info… however… it’s not like our blog site. Our site is free, we are not selling anything, or making money off of ads for other products. Our goal is to be educational and to encourage you to call us if you are considering a home purchase in the Triangle. These other guys really want to sell you credit “protection” service.
If you need some help with this DIY project, let us know, we’ll do anything we can!
