How Credit Scores Are Calculated

What makes a good credit score? What factors do credit reporting bureaus consider most when generating scores? Unless recent bankruptcies, collection accounts or outstanding tax payments are involved, the following criteria is generally accurate:  35% Payment History– Recent delinquencies bring scores down more than those in the past.  30% Balance– High balances over 75 percent of the available credit limit hurt credit scores. Small balances on multiple cards are more favorable than one maxed-out card.  15% Credit History– 3 to 5 lines of credit, and a loan with a long history is best.  10% Type of Credit– Furniture and appliances stores' "pay later" credit lines are less favorable and considered higher risk.  10% Number of Inquiries– These cost 5 to 15 points off your credit score per inqury. Mortgage inquiries don't count as long as they are within 14 days of each other.

USDA Eligible Properties Saved From 1st Quarter Cut Cities remain USDA Eligible until September 2013

 

There's good news for people living in areas that qualify for USDA loans. A list of 923 communities that were set to be cut from the USDA's list of Rural Development eligible areas will now remain eligible until later this year, on September 30, 2013.

What does this mean? There will be no changes to the communities that are currently eligible for the USDA Section 502 Guaranteed Program. In other words, cities that were included in the previously released "cut list" will continue to be eligible for USDA financing until the new deadline.

USDA Rural Development and its loan program were designed to help improve the economy and quality of life throughout rural America. The program continues to remain a wonderful option for qualifying homebuyers, with zero down payment required.

For a complete list of the Rural Development eligible communities and for information about qualifying loan programs, consult this link. (http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do)

If you or anyone you know is interested in a USDA Rural Development guarantee loan, I would be glad to help and am always happy to answer any questions you may have!

FHA Makes Changes to Mortgage Insurance Premiums

What Does This Mean for Home Buyers?

FHA recently increased monthly mortgage insurance premiums on the most standard FHA loans.

How will this impact home buyers?

This will only slightly increase a home buyer's monthly payment.

For example, on a $175,000 loan amount the payment will increase by about $15 per month, based on the new premiums.

Another change is the length of time the mortgage insurance will remain in effect. This is inconsequential however, since rarely do borrowers keep loans for the full life of the loan.

Even though monthly FHA payments will increase a bit, FHA still remains the most flexible and affordable loan program for buyers with less than a 5% down payment.

The good news is that home loan rates are still at historic lows right now, and it's a great time to purchase a new home. If you have any questions regarding these changes or would like to discuss how I can help you or someone you know get qualified for a mortgage, please feel free to call or email me.

Setting S.M.A.R.T. Goals

When you set goals, remember to make them S.M.A.R.T.  Specific, Measurable, Attainable, Relevant and Time bound.

First Time Home Buyer Grant

There is a terrific grant available for first time home buyers.  This grant will give a home buyer up to $5,000 to use towards down payment, closing and prepaid costs.  There is no repayment required.  Act fast as there is only $15,000,000 available.

• First time home buyer (cannot have owned a home in the past 3 years)
• No income requirements
• Purchasing a single-family/one-unit, owner occupied, primary residence.
• No lien or repayment required
• No sales price limit
• Funds can be used for closing costs, prepaids, and down payment.
• Grants for non-military homebuyers are $3,000.
• Grants for active military and veterans are $5,000.
• Neither grant can exceed 25% of the purchase price.
• These grant funds may be used with any loan type except 203K loans and may combined with MSHDA’s Down Payment Assistance.

Merry Christmas From the Family at Blue Water Home Loans

Seller Contributions

Depending on the seller’s eagerness to close the transaction, the seller of a property will often become aggressive and offer to pay some or all of the closing costs, origination points and/or pre-paid items (interest, hazard insurance, tax escrows) associated with the purchase on the buyer’s behalf. This common strategy can be very beneficial to the buyer, particularly if the buyer is short on funds to close. It can also be the vehicle that effectively drives the interest rate down and provides the buyer with a more affordable monthly payment.

Note: 

There are limitations on how much the seller is permitted to
contribute, depending on the loan-to-value ratio. The typical seller
contribution is from 3% to 9% of the purchase price, based on the size of the down payment. Seller contributions may sometimes be isolated to non-recurring closing costs and/or origination or discount points only.
The lender will not permit the seller to contribute funds back to the buyer
after the close of the transaction to accommodate repairs to the property.
Items such as roof leakage or new carpet cannot be covered by any
seller contribution clause.