When Tax Time Can Be Fun

It’s that time of year again! Woo-hoo, time for that annual paperwork party chock-full of party games like Deduction Decipher and Adjusted Gross Income Gotcha.

Okay, so maybe the only people looking forward to this shin-dig is the IRS man, but it is up to us taxpayers to make sure that we keep as much of our earnings as we can. Prosperous people are people who consistently exercise financial fitness. As a Real Estate Agent, I likewise believe that maintaining the health of property value is a direct extension of wealth maintenance acumen (and, by the way, it is always a good idea to regularly check your home’s value). Educating yourself on how to not over-donate to Uncle Sam fits into the category of “Smart Saver” very well.

Tax Time: 5 Tips to Put More Money in Your Pocket

RISMEDIA—Taxpayers receive the most important tax form of the year in January: Form W-2, Wage and Tax Statement. Your 2010 income tax and future Social Security benefits are based on it, so its accuracy is vital to your short- and long-term financial health.

The American Payroll Association offers W-2 tips to save you time, money and headaches this tax season:

1. Increase your paycheck in 2011. The average person overpays taxes by nearly $250 a month, according to the IRS. Making minor adjustments to Form W-4 can increase your paycheck. The W-4 assistant at www.nationalpayrollweek.com/W4 helps determine the withholding allowances you claim on Form W-4.

2. Don't forfeit free money. Read the back of W-2 copies B, C, and 2 to determine if you are eligible for credits. You could be missing out on thousands of dollars in tax credits.

3. Review your W-2 carefully against your final 2010 paystub. If your W-2 seems incorrect, contact your payroll department.

Important items to review:
A. Box 1 should differ from your final 2010 paystub year-to-date gross pay if you participate in a 401(k) or other employer-sponsored savings plan.
B. Box 3 total should not exceed $106,800 – the 2010 social security wage base.
C. Boxes 1, 3, and 5 should be less than your final 2010 paystub year-to-date gross pay, if you use pre-tax deductions to pay your insurance premiums or to contribute to medical or dependent care, parking, or transit flexible spending accounts.

4. Ensure your Social Security Number (SSN) matches your Social Security card. The name and SSN on your W-2 must match your Social Security card to receive your benefits. Ask the payroll department for a corrected W-2 if they do not match.

5. Make sure you get all your tax forms. You should receive a W-2 from every company that paid you in 2010 by January 31. Contact the payroll department of any company you worked for in 2010 that didn't send you a W-2. Request a 'reissued statement' to replace lost W-2s. If you earned more than $600 from a single company for any freelance or contract work, you should receive Form 1099-MISC, Miscellaneous Income, instead of a Form W-2.

The Lauri Kent Team believes that in all things, it is important to work smart as well as work hard. Our clients can attest that we truly exercise this philosophy: we do our homework on real estate. If you are looking at buying or selling a home in or around Southeast Texas, give us a call and see if The Lauri Kent Team can answer all your questions.

Will 2011 Bring End To A Long Credit Market Winter?

Since the 2008 Housing Market Crash, the beleaguered Credit Market, which is responsible for the issuance of mortgages, has struggled to regain its footing with lending practices. Real estate sales have been sluggish in large part to the current rigidity of the Credit Market, sluggish real estate sales impact the value of everyone's home, and those seeking to buy a house, even though prices homes are incredible, can only obtain the financing needed with good and improved credit ratings. So improvements in the Credit Market should be welcome new to all homeowners and would-be homeowners everywhere. And guess what? There are some who prognosticate that 2011 may bear good news on this front. Let's look at it:

Report: U.S. Credit Markets May See an Early Spring Thaw

RISMEDIA— U.S. credit appears to be on the mend, but the recovery is still in its early stages. That is the key message of a report released by TD Economics highlighting a number of positive developments in U.S. credit markets over recent months.

In October, responses to the Federal Reserve's Senior Loan Officer Survey showed that commercial banks' willingness to lend to consumers is hovering around its highest level in the last five years. The easing of credit standards has coincided with a drop in delinquency rates, signaling a general improvement in credit quality. Although delinquencies on real estate loans remain elevated, delinquencies on unsecured loans to consumers and businesses have seen a steady, downward trend since 2009.

"The improvement in credit quality is important," says TD Chief Economist Craig Alexander. "It could mark the beginning of a virtuous cycle where better credit quality leads to more credit growth and improved economic growth – which in turn feeds back into greater credit quality."

Developments in the market for unsecured credit – such as credit cards and student loans – do give particular cause for optimism. Unlike mortgage credit, which is secured by the value of a person's home, unsecured consumer credit is backed only by the lender's faith in the borrower's ability to repay.

Unsecured lending seized up during the recession, falling 7.4 percent from its peak reached in 2008. However, the data suggests that unsecured lending is growing once again. Adjusted for charge-offs (a one-time hit that banks take on delinquent accounts that they deem unrecoverable), total consumer credit is up almost 3 percent from a year ago.

In general, the uptick in lending has important implications for the economic recovery.

With banks more willing to lend, there are more resources available to finance investment projects that will boost output. Also, the expansion of credit, while raising the supply of money in the economy, will help counter the threat of deflation. This is particularly important because deflation erodes the value of earnings, making outstanding debt obligations more expensive to service.

Nevertheless, Alexander cautions that the picture is not all tea and crumpets. Some lenders are still reeling from a real estate mortgage delinquency rate that peaked around 10 percent during the recession – up from less than 2 percent earlier in the decade. Although the delinquency rate has inched down in recent quarters, it remains elevated by historical standards.

"Without a resolution in housing, improvement in other sectors of the economy can only push the gas pedal so far," Alexander concludes. "At the same time, the fact that credit quality is improving outside of mortgages shows that resolving issues in housing and commercial real estate could lead to a much faster pace of economic growth."

So if you are in the market for purchasing a home in the North of Houston area communities: Spring, TX real estate, The Woodlands homes for sale, or Lake Conroe homes, but have had recent roadblocks of inflexible lenders, let Lauri Kent work with you to make sense of home buying finance issues.

Why Don't My Credit Scores Match?


By Jeff Mandel and Marlin Brandt

RISMEDIA, January 12, 2011—Perhaps your clients have truly realized that now is a great time to buy and they want to take advantage of some great home-buying opportunities before they disappear.

Interest rates are still low for people with excellent credit, so advise your clients to update their records and purchase a credit report from a reputable credit report provider.

However, while the score they saw was a 920, they score the lender pulls up is an 810—what happened?

What Happened?

First, you need to understand a little about credit scores. Your credit score is a three-digit number that helps lending institutions assess their risk associated with lending you money. Credit scores are used for home loans, auto loans, personal loans and credit cards.

However, it doesn’t end there. Your score may also be considered for non-lending purposes, such as new utility services, cell phone services, renting an apartment, a lease, auto insurance and even to assess your character as part of a new job background check.

People with lower credit scores may pay higher interest rates or may not be approved at all. Whereas, those with higher, less-risky credit scores often qualify for lower interest rates and special options. Credit scores are calculated based on computer “predictability” models. These models are designed to compare and analyze credit information and credit utilization patterns from your credit report against thousands of other consumers. The data is then evaluated using a complex mathematical algorithm that generates a credit score the moment a report is ordered.

There are literally trillions of score combinations used in the calculations. Most credit scores are calculated and provided individually by each credit bureau, including the three major ones in the U.S. , which are Experian, Equifax and TransUnion. Additionally, many lenders use third-party credit scoring systems, such as FICO, NextGen, CE Score and VantageScore. For consumers, the variations in scoring models and score ranges can create some confusion.


In 2006, the three major bureaus joined forces to create a single credit scoring system called the VantageScore. The VantageScore and FICO model lead the industry as competitive rivals in credit-scoring systems.

VantageScore provides a standardized universal mathematical formula to create a credit score from data found on reports from the three major bureaus. Your VantageScore may not be exactly the same if your lender only orders a credit report from one of the bureaus. This is because the data each bureau receives may be slightly different.

As an example, if your auto loan lender does not report your payment history to Equifax but does report it to Experian and TransUnion, it will create a difference in scores. In theory, the VantageScore should be more consistent across all three bureaus since the mathematical formula is the same.

Unlike FICOs traditional 300-850 credit score range, the VantageScore ranges from 501-990. There is no true way to compare the results of the VantageScore to a FICO score especially when the formulas are constantly changing. However, to put some perspective in place, a 650 FICO score approximately compares to a low, 800-range VantageScore.

Although the exact formulas and algorithms for calculating credit scores are closely guarded secrets, FICO and Vantage do provide general key characteristics that drive their credit scoring models. The one constant for both scoring systems is that paying your debts on time will typically be the primary factor that positively impacts your credit score.


Click here for the current local housing trends:

http://www.blogger.com/goog_565786052

Lauri Kent
Keller Williams Realty
2200 N FM 3083 W
Conroe , Texas 77304
281-703-5740 cell
936-447-6000 home
936-441-8001 fax
http://www.lakeconroerealtynow.com/
need a break, check our vacation rentals at:
www.vrbo.com/134046 & www.vrbo.com/246370

BE A SMART FORECLOSURE BUYER

You may be thinking about buying some distressed property as an investment. Now more than ever, there are great deals to be had in foreclosure properties, but if you are new to buying foreclosures, equip yourself with these insights that can protect you from clostly mistakes. Then do your homework, and research the foreclosures in your area. And how to make sure that investment turns a profit requires knowing how real estate property best results in a good investment.

4 Tricks and Traps Foreclosure Buyers Need to Know

By Tara-Nicholle Nelson

Interest in buying a foreclosed home is on the rise, but so are concerns about the risk involved in the process. In a December survey, Trulia found that 49 percent of Americans were at least somewhat likely to consider buying a foreclosure, up from 45 percent in May 2010.  But the number of US adults who believed there are disadvantages to buying foreclosures had also increased, from 78 percent to 81 percent over the same time frame.  Among those folks who had qualms about purchasing a foreclosure, the top concerns were:
that buying a foreclosure might involve hidden costs, that the buying process itself is risky, and
that the home might continue to lose value, after escrow closes. While there certainly are risks that run with buying a foreclosed home, the most risky way to do it is also the least common method: at the foreclosure auction itself. Auction buyers often don't have the opportunity to fully vet the foreclosure to ensure that they are receiving clear title and/or to make sure they're not getting a lemon. With that said, most foreclosures are resold not at the foreclosure auction, but as an REO (short for Real Estate Owned - by the bank), listed by a real estate broker on the Multiple Listing Service and on Trulia!
When you buy an REO in this way, you have lots of opportunities to use some tricks of the trade, so to speak, to avoid some of the traps you may fear. Here are my Top 4 Tricks and Traps for Foreclosure Buyers:
1.  As-is means as-is, period.  (Most of the time.) Banks have very little interest, inclination or even the logistically necessary resources to execute repairs on your home. Many of these homes are managed by an asset management company in another state, and may not even have a local person besides the agent who can handle large repairs. Generally speaking, bank-owned homes are sold on a very strict "as-is, where-is" basis, which just means that you should expect to take possession of it, if you buy it, in exactly the position and location it is, no matter how defective.  Do not walk into a viewing of a foreclosed home, notice how the plumbing is all ripped out of the wall, and make an offer for it, assuming you'll be able to get the bank to "fix" the issue later.  Usually, if the bank is willing to do any repairs to a foreclosed home, they do so, on the advice of the listing agent, prior to the home being listed.
Out of hundreds of foreclosure transactions I have personally been involved in, I have seen exactly four where the bank did agree to do some level of repairs at a buyer's request.  Every one of those times, the repair was to fix a health-and-safety endangering property defect, like a gas-leak or an electrical fritz. And every one of those times, the property defect was highly non-obvious - not something even a diligent buyer could have detected visually prior to making an offer.  Maybe another few times I've seen a bank agree to a small price reduction due to surprising condition problems.  And dozens of times, I've seen transactions fall apart or buyers take on the property’s repair costs, when they request repair credits, price reductions or actual repairs from the ban seller.
If a foreclosure you're considering has obvious property damage, have your contractor stop by with you or gather whatever information you need to get as comfortable as possible with your offer price, assuming that the bank will not be chipping anything in for repairs, before you make the offer.
2.  The bank speaks no evil.  When it comes to real estate disclosures, the fact is, the bank speaks not much of anything!  Many states exempt banks and other types of corporate homeowners from making substantive disclosures about the condition of the property.  Even in jurisdictions where the bank is not legally exempt, most banks will simply write across the required disclosures something to the effect that the bank has no knowledge of the property's condition.  (Before you protest with a "that's not fair!!" keep in mind that the bank never lived in the property, so most often truly does have no idea of any important facts or details about its condition or location, the things an average home seller would be required to disclose.)
Even in a normal transaction, it behooves a buyer to be thorough in having the property inspected and meticulous about reviewing the resulting inspection reports.  But buying a foreclosure ups even that ante, as you have no seller disclosures to highlight particular problems you should have looked at, and none of the usual legal recourse you would have if a “regular” seller made incomplete disclosures.  Get a property inspection.  A pest inspection.  A roof inspection.  A sewer line inspection. A pool inspection, if you have a pool and care about its condition.
Yes - all these inspections cost money, but the drama and thousands each of them can save you is well worth it. And read your state’s buyer inspection advisory or similar document (ask your agent), just to make sure you’re aware of all the inspections that are available to you, and work with your agent to determine which ones make sense, and which are not appropriate.
Some insider tips:
Vacant foreclosures often have their utilities disconnected.  Work with your agent to make sure the utilities get turned on - even for a single day - so that your property inspector can run the water taps, test the stove and dishwasher, see if the water heater and electrical outlets work, and so forth.
If appliances are there, the bank will probably leave them there, even though they may not have technical “legal” ownership of them, so they may not be included in the contract, like in a "normal" home sale.
However, the bank will not give you any sort of warranty on appliances, so try to obtain any warranty coverage you want or need elsewhere - from a home warranty company or, potentially, the original manufacturer/retailer.
3.  The contract terms, they are a changin'. One thing squarely in the wheelhouses of local real estate pros are local market standard practices.  From negotiating practices to which party pays which closing costs, every market is different, and experienced local agents are experts on this information.  If you’re buying a foreclosure, though, the bank will often require you to use it’s own purchase contract, rather than the more commonly used state forms.  Many times, this is done to advise the buyer of the bank’s refusal to make substantive disclosures (see above) and to change some of the normal practices for your area to the bank’s standard practices. 
For instance, if you are buying a home in a contingency state, where you would usually have to sign a document proactively releasing contingencies, the bank’s contract will probably change that, so that your transaction operates on an objection period. In "objection" based transactions, you  have a certain period of time in which you must either speak up about your concerns with the property and/or cancel the deal, or you will automatically be presumed to be moving forward with the deal and your deposit money will be forfeited if you change your mind after that date. 
If you’ve been making offers on non-foreclosures on the standard contract form, or you’ve bought homes before and think you know the drill, please - I implore you - READ every word of the contract you sign when you buy a home from the bank, and ask your broker, agent or attorney to explain anything that doesn’t make sense.
4.  Expect the unexpected.  When you buy a foreclosure, you might end up working with the bank’s escrow company, instead of a company you or your agent selects.  And the bank's escrow provider might be slow or disorganized.  C’est la vie. The bank might rush you for your deposit money, but take their own sweet time coming up with the necessary signatures on their end to close the deal.  Par for the course.  You might expect that the bank would be desperate for buyers, and instead find out that there are 20 offers on the same REO.  Or, you might be the only offer and still get your aggressively low (but still reasonable) offer rejected, only to have the bank reduce the list price of the home to the same price of your offer!  (They often want to see if exposing it to other buyers at the new, lower list price might generate more interest and higher offers.) 
When you’re buying a foreclosure, expect glitches, expect your calendar to be derailed, expect the bank to be inflexible and possibly even unreasonable.  It’s not overkill to ask your broker or agent to brief you on the common complications they see in REO transactions.  Having realistic expectations may keep you from pulling your hair out.  And if the transaction turns out to run smooth as silk?  You’ll be pleasantly surprised.

So remember that, like anything else, becoming a highly profitable foreclosure investor requires some experience and know-how. The market is ripe with opportunity, however, so if you desire to take advantage to current opportunities, then have the confidence in knowing that a seasoned real estate agent can help you navigate these foreclosure waters. If you have any questions about foreclosures anywhere around the Houston and Southeast Texas region, contact Lauri Kent.  Also visit the website for more information about Lauri Kent and her team of real estate professionals.

"...a great bellwether for the economic situation of the country."

It may be old news that Detroit is declining since the American auto industry took a tumble. And, simply based on who you see moving to your neighborhood, it may be no surprise to you that Texas is a state to which people are flocking right now, especially from New York, New Jersey, and Ohio. Migration trends tell us much about the state of affairs across the country, and from that we can extrapolate some good and practical insight into the condition our state is in, and more to the point, the condition of your real estate value.

Where is America Moving?
Top Migration Trends Seen in 2010 

According to the 2010 Atlas Van Lines Migration Patterns study, more Americans are on the move. In 2010, Atlas saw increases in the number of household moves, a possible sign that the economy is improving. Atlas' annual study has tracked the nation's moves since 1993.

For some states, outbound moves were high. Due to high unemployment, especially with declining manufacturing and automotive jobs, residents of the Rust Belt continue to relocate elsewhere. States adjacent to the Rust Belt saw a great increase in the number of inbound moves.

For the first time in two years, Kentucky joined its surrounding Mideast states—North Carolina, Maryland, and Washington, D.C.—as inbound states. For the fifth year in a row, Washington, D.C. had the highest percentage of inbound moves, while Ohio came out the clear leader in the highest percentage of outbound moves.

Regardless of economic highs and lows, several states have remained constant in status for 10 or more years. California, Kansas and South Carolina have been balanced, Indiana has been outbound, and Alaska and North Carolina have remained inbound.

As the year progressed, Atlas saw increases in the monthly totals of household moves. Summer months continued to see the highest number of moves per season. Overall, the total for 2010 was 74,541.

"Every year we look forward to sharing the results of the Atlas migration study; it is a great bellwether for the economic situation of the country," said Jack Griffin, president and COO of Atlas World Group. "The results are especially promising this year, as the number of moves has increased, with monthly numbers higher than last year's."

Here's a closer look at relocation patterns in 2010 as identified in the Atlas study:

Westward-Ho!
Much of the West continues in a balanced state. For the first time in three years, Idaho moves from an outbound state to a balanced state, joining California, Oregon, Washington, Nevada, Montana, Colorado, Utah and Arizona.

Déjà Vu
For several states, economic ups and downs have had little influence on the number of residents moving in or out of that state. For ten or more years, six states - California, Alaska, North Carolina, Kansas, South Carolina and Indiana - have remained constant in their inbound, outbound or balanced status in Atlas' annual study.

Silver Lining
Despite high foreclosure rates and poor housing sales, a large pocket of southeastern states - including Florida, Alabama, Georgia and South Carolina - saw no drastic increase in the number of outbound moves; in fact, they remained balanced in their number of outbound and inbound moves. A reason for the balance could be these states' popularity as a retirement destination.

For full results of the migration study and to view a map and annual histories for each state, visit www.atlasvanlines.com/migration-patterns/.




AfterWord
The Southeast Texas region may be a bit healthier, economically speaking, than the rest of the country, but we, too, have our share of economic and real estate challenges. Distressed real estate and foreclosures are an issue here, too, but one man's distressed real estate can be another man's real estate opportunity. IF you are in the market for investing in foreclosure property in the North Houston area that includes Spring, The Woodlands, Conroe/Lake Conroe, Montgomery, Magnolia or Willis, please check out MLS Houston Area foreclosure listings on our website.

New Year, New Financial Fitness Good Habits

It's a new year, and a new opportunity to resolve to build your wealth and make better decisions that will effect your long-term goals.  No matter where you find yourself at the present moment - whether in the comfort of a secure job or if you are presently unemployed - taking control of your situation will benefit you greatly. Here are some great tips that can help you no mateer where you find yourself on the financial spectrum. When the time comes that you need to make a large purchase, like the purchase of a home, the efforts you make now will make all the difference then. Home buying Financial Fitness is of course our special concern.

Use New Year to Build New Financial Foundation 

By Pamela Yip

RISMEDIA—This is your chance to start fresh with your finances, another opportunity to achieve the goals you didn't hit in 2010.

"The new year gives us all an opportunity to make decisions and take action," said Thomas Murphy, partner and certified financial planner at TEMAA Financial in Dallas. "I suggest 2011 be the year you take control of your finances."

MAKE YOUR GOALS CONCRETE: What are your financial goals? How will you achieve them? Without this blueprint, you'll be chasing your tail, worrying about which stock or mutual fund to invest in. Having no real plan could result in higher risk than you need, scattered and duplicate investments, and high fees.

Be specific about your goals. Don't just say, "I need to pay down my credit card." Instead, say you want to put a specific amount toward your credit card bill next year and you will achieve that by paying a specific amount each month.

Clearly defining a goal enables you to develop a concrete plan for achieving it.

"Come up with a plan on how to become debt-free, either on your own or with debt counseling," said Todd Mark, vice president of education at Consumer Credit Counseling Service of Greater Dallas. "What matters is taking those steps."

Becoming debt-free also means changing your mindset toward debt.

"Like most people who are used to carrying the extra weight around the middle, people get used to carrying debt and saying, 'That's where I am right now,' " Mark said. "We want to change that. We don't want them to accept it, and we don't want them to be comfortable with it."

SPEND STRATEGICALLY: "Make the decision that you will not spend one dime unless it is to help you achieve your goals," Murphy said. "No more spending money on things you no longer care about or to impress the neighbors or for any other reason, except it is part of your path to achieve financial success, however you define it."

TRACK YOUR SPENDING: "Record every penny you earn and every penny you spend for at least 90 days," Murphy said. "If you have no real idea how much money you make or where it all goes, you are not in control."

SAVE MORE MONEY: Always pay yourself first each month. It doesn't have to be a large amount of money. It just has to be consistent and left alone as much as possible. The compounding effect over time will take care of the rest.

"Set up a program to save the difference between what you earn and what you spend," Murphy said. "Save first, spend after. Stretch to save at least 10 percent of your income. Put the savings in an emergency fund and commit that you will only touch it for real emergencies — unforeseen and unforeseeable events. Set a goal of accumulating six months of living expenses in this emergency fund."

Take advantage of all opportunities offered by your employer to save money, such as through a 401(k).

"Those savings which come automatically out of your pay are best,"
Murphy said.

PAY OFF OR PAY DOWN DEBT: Debt is one of the biggest obstacles to achieving your financial goals. It will divert your money and cause your financial journey to come to a screeching halt.

"The more you owe, the less control you have over your life," said Calvin Helin, a demographic economic trend analyst and author of the upcoming book, "The Economic Dependency Trap: Breaking Free to Self-Reliance."

"Debt puts you in a position of seeking to pay off your debt rather than pursuing other areas of life that might be more rewarding. It is one of the biggest sources of family stress."

If you racked up credit card debt for the holidays, aim to pay it off in three months.

"If you haven't paid off your holiday debt by the time you've gotten your tax refund, there's a good chance you're going to continue to be paying on that during the holidays in 2011," Mark said.

Commit to paying credit cards off every month, Murphy said.

"If you find you cannot resist the temptation to buy, cut up all but one card and leave that card at home," he said. "Use it only for important purchases after careful thought and a plan for how and when you will pay it off."

Getting rid of the anxiety of high-interest rate debt is a far better gift than almost anything you could buy.

"Those who understand interest earn it; they do not pay it," Murphy said.

MAKE YOUR GOALS REALISTIC: "Don't say, 'I'm going to be debt-free and a millionaire by the end of 2011,'" Mark said. "Maybe you can say, 'I have a goal of paying down $10,000 in debt in 2011, and I want to be debt-free in four years.' "

PROTECT YOUR INCOME AND ASSETS: "Find out if your employer offers disability insurance and life insurance," Murphy said. "If so, buy it.
To determine how much you need, conduct a financial fire drill and imagine you are permanently disabled. How much money would need to come in the door to allow you and your family to maintain your standard of living?"

FOR THE LONG-TERM UNEMPLOYED: Your aim is to stabilize your finances as much as possible.

Besides the obvious priority of landing a job, you should analyze what financial resources you still have to sustain you.

"If you've been unemployed for awhile, try to get a part-time job at night and on weekends to help reduce the cash-flow drain and provide you with a sense of belonging," said Lynn Lawrance, certified financial planner at Financial Network Investment Corp. in Dallas.

If you've been unemployed for more than six months, watching your spending is all the more critical.

"Tracking every penny is a necessity, not a luxury," Murphy said. "Making conscious decisions about every spending decision is vital. Forcing yourself to reduce your standard of living temporarily may be the only way to allow you the peace of mind necessary to interview well."

When you do spend, make the money count.

"Squeeze every penny you spend to minimize the damage to your net worth," Lawrance said. "Spend only on absolute essentials and items that will boost your networking and interviewing success."

(c) 2010, The Dallas Morning News.
Distributed by McClatchy-Tribune Information Services.

Are You A Home Buyer In Need Of Help With Credit Fitness?

Nowdays, since the mortgage crisis, lenders are so very careful to make sure the loans they give out are good and solid. The extra scrutiny they put on you, as you shop for a good lender, means that any blip you may have on your record can determine whether or not you can get one dime out of any institution. Equip yourself with credit fitness. Here is a great article that tackles this important homebuyer concern:

By Chris Kaucnik
Many home buyers now and into the foreseeable future will face tight lending standards and will need to improve their credit score to get prequalified or preapproved for mortgages. Be aware of the following steps your prospects can take for some speedy credit repair to gain lender approval and the best possible rates, especially if they are months away from a purchase:

Credit Card Wisdom

• Paying revolving credit cards down is generally more beneficial than, for example, paying down student loans, mortgage or auto loans.
• Always leave a 30% or higher gap between what you owe on the card and the card’s limit. Lenders look for this minimum gap.
• Use cards with care even if you pay off balances each month because depending upon statement dates, the lender may see big balances.
• Pay down the cards closest to their limits first for speedier credit repair. The lending bank will then see the “gap” it wants to see.
• Do not ask a creditor to lower credit limits. Generally, carrying smaller balances on several cards is better than one large balance on one card.
• Check your credit card limits to make sure the report is correct. Limits may not be reported on all cards.
• Never make a late payment on credit cards or any loan.

Protesting Items

• Protest any unjust negatives, such as late payments, collections that are not yours, and any items not reported as “paid as agreed,” if you paid on time and in full.
• Protest items listed as unpaid that were included in a bankruptcy, and items older than seven years (10 for bankruptcy).
• Focus first on the larger, newer negatives listed on the report.

It is important not to worry about smaller items like incorrect address information or an old employer listed as current. This is, of course, unless there is the possibility of identity theft or the file is mixed with someone else’s.

This is certainly not an all-inclusive list of the steps that can be taken to improve a credit score, but it is a great start for clients needing to focus on their scores before attempting to get preapproved and purchase a home through you.

Chris Kaucnik is marketing director for Home Warranty of America, Inc.

Also see more financial fitness wisdom on Lauri Kent's Financial Page.

Learn about scams targeted at homeowners facing foreclosure

Public broadcasting stations across Texas will air a 30-minute special this month on scams surrounding foreclosure prevention and loan modification. Scam artists are preying on homeowners who are facing foreclosure, promising to modify loans and guaranteeing to save a home from foreclosure. They charge fees up front and then disappear. Many victims lose money and their homes.

Find out how you can help homeowners recognize a scam and what to do if they are approached. See when the special is airing in your market. You can also find foreclosure-prevention resources for homeowners at KeepMyTexasHome.org.

The special was produced in cooperation with Neighborworks America and the Texas Foreclosure Prevention Task Force, of which the Texas Association of REALTORS® is a member. A link to the pdf with schedule for the special, as it airs across Texas, is found at www.LakeConroeRealtyNow.com under Special Notice.