The “R” Word

January 4, 2007 by 2 Comments

Resolutions.  I was not going to post New Years resolutions since they are everywhere.J0309664_1..however, I can’t pass up this opportunity.  Beyond the perennial lose 10 pounds, start excising, or stop smoking; here are a few goals to consider for your financial health.   I plan on revisiting these goals more indepth on future blogs…so I’ll try to be brief for now.

  1. Have an emergency fund established with at least 3 months of living expenses in an accessible account.   You can also use a HELOC for an emergency fund account IF you have the discipline to leave it alone.   A HELOC can be an excellent tool and should be applied for before you have an emergency situation (loss of employment, medical, or a tree landing on your house from sweet Mother Nature) and may not be able to obtain one.   In the event of an emergency, do you have your finances organized?   A recent article I read from the Financial Planning Association recommends having copies of all your pertinent financial documents in a binder that you can find quickly in the event you need to evacuate your home.

  1. Know your score, or at least what is being reported on your credit history currently.  Credit scores are not only used for determining what mortgage programs and rates you qualify for.   They also impact insurance, credit card rates and auto loans to name a few.  In addition, reviewing your credit will help determine if you credit is being used without your knowledge (identity theft).   You can visit www.annualcreditreport.com for a free credit report.   This is provided by the “big 3 bureaus” and it may not provide your score without paying an additional fee.  As you are allowed one report from each bureau annually, I would recommend that you pull your report from one bureau every four months to keep a constant monitor on your credit activity.  There may be simple ways to improve your credit score that you can determine once you have the information available.

  1. Create or review your Will.  I had a pretty cheesy will until I married last year.   My husband and I spent quite a bit of time with an attorney to make sure we have everything set up as we wish it to be instead of letting the government have it.   You would be surprised how easy, with home values, a retirement account, etc. that your net worth can grow.  Whether you have children or not, a will is a must.   After you have a will, it’s a good idea to have your information organized for your loved ones.   A great website to check out is www.readyornot.biz.

  1. Get a mortgage check-up.   If your mortgage has an adjustable rate (ARM), if you are paying private mortgage insurance (PMI) or if you have two mortgages on your home, this could be a great time to review your current scenario to see if you can reduce your monthly payments.   There is no sense in paying more than you need to, unless you plan on selling the home soon.   An Annual Mortgage Review is more in-depth than checking out your mortgage to current rates and products.

  1. Eliminate credit card debts.  It is too easy to fall into credit card debt.  Banks do not want you to ever pay them off with all the interest they earn.   Start with paying additional towards your smaller debts and then work toward the next one.  This is a slow process, but worth it.  It is boggling how much the interest can mount up on these types of loans with no tax benefit to you.  Improving  monthly cash flow reduces stress and allows you to eventually save for more important life items such as retirement and college.

I know this is a few days past New Years…however, it’s always relevant.   I wish you and yours a very happy, healthy and prosperous New Year.   Cheers!

Filed Under: Credit Scores and Reporting, Debt Restructuring, Financial Planning, Identity Theft, Interest Rates, Mortgage

2 Out of 3 is Bad…2 Major Credit Bureaus are increasing their costs to consumers.

December 13, 2006 by Leave a Comment

Effective January 2007, Equifax and Experian will increase the cost of obtaining consumer credit reports to lenders.  Currently, when you apply for a mortgage loan, the loan originator pulls a tri-merge credit report and, depending on the type of mortgage company the L.O. is employed by, may "shop" for lenders to find the best product and rate.   If a borrower has good to excellent credit, often times, looking for rates and products can be done verbally without having to provide a copy of the credit report until the loan is ready to be underwritten.   

For borrowers with challenging credit or situations that need mortgage help, loan originators will often times shop different sub-prime lenders for their clients.  This may involve running the loan scenario with that sub-prime lender and uploading the client’s credit report.   Currently, the original credit report that was pulled by the loan officer is "reissued" to the sub-prime lender for use in underwriting the loan at no additional expense to the consumer.  If the loan is especially tricky, it’s very possible to have to repeat this procedure with different sub-prime lenders to try to find a desirable loan approval.   Equifax and Experian are now going to charge a fee every time the credit report is submitted to a new lender (sub-prime or not).   

This will not only impact "sub-prime" borrowers.  I offer to re-lock my clients with another lender should interest rates improve significantly.  In this case, there will be additional fees, that do exist now, for reissuing of the credit reports.

Once again, the credit bureaus…well, at least two of them, are playing dirty pool.  There is no benefit to lenders or to consumers for the increase in the credit reporting fees.  It only generates significant additional revenue for Equifax and Experian and will hurt consumers who can afford the increased cost the least.

Any consumer can obtain a free copy of their credit report by visiting www.annualcreditreport.com.  This tool is for the consumers information only, it is not suitable for underwriting mortgage loans.

This is offered by the three major credit bureaus and you are allowed to obtain one report from each bureau per year.  I recommend that you pull one report from one bureau every four months until you have cycled through each credit bureau and then start over with the process.    There are many copy cat "free credit report" sites, this is the official one.    If you receive my Newsletter, which happens to be mailed 3 times per year, you could use the reminder I have featured in it.  If you would like to be added to my mailing list, including my Homes & Money Newsletter, please contact me with your mailing address.

Filed Under: Credit Scores and Reporting

Important Privacy Warning

November 30, 2006 by Leave a Comment

We recently became aware of a disturbing trend involving clients who have applied for a new mortgage.  The three major credit bureaus are selling your personal   information to hundreds of mortgage companies throughout the country as soon as your credit report is pulled from your mortgage lender. 

Your personal information is being sold without your consent or knowledge.  These mortgage companies are generally “fly by night” companies that operate several states away and are solely interested in offering you a “bait and switch” mortgage offer.  These lenders will call you repeatedly and mail you solicitation after solicitation in hopes of deceiving you.  They often offer terms that are too good to be true and misleading.   Not only is this practice deceitful, it opens the possibility to identity theft.  WAMB is currently working to get this dreadful situation remedied, in the meantime, consumers should take steps to protect themselves.    Here are a few suggestions on easy steps you can take.

Opt Out of Prescreened Credit Offers

This will stop creditors from viewing your personal credit information     without your written consent.  In addition, it will cut down on the junk mail (unwanted credit card solicitations).  This alone lowers your chances of    becoming a victim of identity theft.  You can opt out by visiting www.optoutprescreen.com or by calling 888-567-8688.  Try do this one week before having your credit ran by any lender, if possible. 

Add your phone number to the Do Not Call List

This can be done online by visiting www.donotcall.gov or by calling         888-382-1222.  Remember to make sure to add both your home and mobile cell phone numbers.  This takes 30 days to be in effect. 

At Mortgage Master, we work diligently to protect your privacy and personal information.  By following the steps above, you will protect yourself and lower your odds of becoming a victim of identity theft.  Please feel free to call us with any questions or concerns.  Our team is always here to help.

We take your trust seriously and will never be less than truthful in our dealings with you.  You can count on honest, straight forward mortgage recommendations from our team.  After all, the best compliment to our team is the referral of friends and family to our mortgage   practice.  This can only be achieved by servicing our clients with great care and respect. 

For a free report on additional tips on preventing identity theft, please send me an email.

Filed Under: Credit Scores and Reporting, Identity Theft
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