How To Improve Your Credit Score

How can you improve your credit score?

It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't do so "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

• Unsolicited credit card solicitations in the mail didn't used to count against your credit report, but they might now. Learn how you may be able to opt-out of these.
• The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.
• Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.
• Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.
• It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score!

Remember, it is vital that you have a decent credit score if you hope to purchase a home. If you have any credit or mortgage-related questions, including how to apply for a home loan, feel free to give Crosscountry Mortgage a call at 877-828-8851!  We will answer your questions and help you in any way that we can.

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FHFA's 2013 Conservatorship Scorecard for the GSEs

Edward J. Demarco, the Acting Director of the Federal Housing Finance Agency (FHFA), has recently released the 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac.  This "Scorecard" is literally rating their performances on things like "the quality, thoroughness, creativity, effectiveness, and timeliness of their work products." They are also graded on how well they cooperate and collaborate with FHFA, each other, and the industry.

The three keywords that they must focus on are "Build, Contract, and Maintain." These were brought up in 2012 as the three goals of the FHFA's Strategic Plan for the GSEs.

"Build" refers to their goal to "build a new securitization infrastructure platform for the secondary mortgage market."

They must also "Contract the Enterprises dominant presence in the marketplace while simplifying and shrinking certain operations by lines of business."

And finally, they must "Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages."

"Despite some signs of normalization in the housing market, our nation finds itself in the uncomfortable position of having over 90 percent of new mortgage originations supported by the federal government," said DeMarco. "That support is provided directly through government loan programs like the Federal Housing Administration (FHA), and through the financial support that the Treasury Department provides to maintain the solvency of Fannie Mae and Freddie Mac."

In the works is a new "joint company" headed up by the FHFA to focus on securitizing home loans. This is hoped to lead to decreased government involvement in the mortgage market. It would also mean that the FHFA is forcing Fannie Mae and Freddie Mac to abandon their current separate systems and construct a single infrastructure to support the mortgage market. This new entity will be the previously mentioned "joint company". It will be more structured and it will be owned by Fannie Mae and Freddie Mac.

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Rate Update: Near Record Lows

According to Freddie Mac's latest Primary Mortgage Market Survey (PMMS), the mortgage rates remain "little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation," said Frank Nothaft, vice president of Freddie Mac.

The 30-year fixed-rate mortgage averaged at 3.34% for the week ending December 6, 2012. Because the mortgage rates have remained steady, the economy is getting a chance to recover.  There has been growth in fixed residential investment, residential construction, and pending home sales. "The housing market is aiding in this recovery," said Nothaft.

If you are interested in buying a house or refinancing your home, the near record-low mortgage rates are still attractive! Home affordability is high and it is a good time to buy! Call Quest Loans to get started with your new loan or refinancing! We also specialize in FHA loans and HARP loans. 888-883-5252.

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4.5% Drop in Mortgage Applications

According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending August 10, 2012, the number of mortgage applications has dropped by 4.5% just since the week before. Many lenders have been left puzzled over the sudden drop. According to the Market Composite Index which measures mortgage loan application volume, this decrease was based on seasonally adjusted figures. Had it been unadjusted, the decrease would have actually been closer to 4.7%. In this slowly re-stabilizing economy, we cannot afford to see statistical drops like this. Hopefully the number of loan applications submitted will rise again soon, which would indicate an improvement for the U.S. housing market.

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Prudential Real Estate Outlook Survey

According to the newly released Prudential Real Estate Outlook Survey for the past quarter, Americans have shown an increase in confidence in homeownership. Residential real estate is recovering which leads to people being more optimistic about buying a home. Many are taking advantage of the record low mortgage rates and the record high housing affordability. The survey shows that 69% of respondents believe that real estate is still a good investment despite what the last new years have brought. 64% have a favorable perception of the U.S. housing market, and 72% believe that the market will continue to recover. Since 78% of people said that owning a home is very important to them, normalcy is starting to return to the market. These people are indeed buying homes, usually for more traditional reasons such as to raise a family and build a future. It seems that the emotional side of owning a home is outweighing the financial reasons. However, 65% of respondents feel as though financing or getting a mortgage is more challenging now than it was before the market crisis. We at Quest Loans do not want you to feel that way. Please call us at 888-883-5252 today so we can help you, on a personal level, qualify for the home loan that you need to begin your homeownership journey. After all, 74% of respondents think it is more important than ever to work with a good agent and lender in order to successfully buy a home. We will be waiting for your call.

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FHFA's 2012 Foreclosure Prevention Report

Since 2008, Fannie Mae and Freddie Mac have completed more than 2.3 million foreclosure prevention actions. This includes 1.1 million permanent loan modifications. All of their activities have been detailed in the FHFA's first quarter 2012 Foreclosure Prevention Report. It is known as the Federal Property Manager's Report and we'd like to share that with you. The report shows information about states with the biggest 5-year decline in house prices, as well as the states with the highest number of delinquent loans. Take a look at it for even more statistics and information.

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Homes are More Affordable than Ever!

The affordability of the Nation's houses has hit a record high. 77.5% of all homes that were sold in the first quarter this year were considered affordable to the families who purchased them. These families earned the national median income of $65,000 per year. However, lenders are continuing to tighten their procedures and policies, making homebuying a greater obstacle than in the past. The good news is that if you can qualify for the loan, the homes are at the most affordable prices than they have been in the past 20 years. Unfortunately, many are unable to take advantage of these prices because of new strict lending practices. We at Quest Loans want to help everyone find the right loan for them and get into the house of their dreams. We work hard to match potential homebuyers up with the right lender to get the job done! Contact us for more information on how to get started. 1-888-883-5252

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Rates Are Still Falling

Freddie Mac reports that the average rate on a 30-year fixed rate conventional mortgage fell to another record low of 3.83% and the 15-year fixed rate conventional mortgage fell to 3.05% in the latest week and can be obtained when paying a 0.7 point.

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Mortgage Rates Rise Above 4%

According to Freddie Mac, the 30-year fixed-rate mortgage has risen above 4% for the first time since October. Last year, the rate was averaging 4.81%; right now it is at 4.08%. The rates are thought to be rising as a sign of economic growth. It was the Federal Reserve that helped to push the rates down to record-low levels in the recent past.

U.S. Treasury bond yields have been increasing lately. However, consumers have been able to reduce their debt burdens quite a bit overall. The economy is finally beginning to stabilize.

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Getting Familiar with the 203(k) Loan

The FHA has a loan program that does a really great thing for homebuyers. It allows them to actually purchase the home that they want. Many homes on the market right now are not selling well because they drastically need repairs and updates. People who are house shopping want to find something affordable, but with great new features rather than old dated, worn down features. Nobody wants to find the seemingly-perfect-on-the-outside house, and then walk into a kitchen straight out of the 70s.

To help with this, the FHA's 203(k) loan program allows homeowners to choose the house, choose the neighborhood, and choose their own upgrades. They are given the ability to pick out the new carpet, paint, cabinets and appliances that would go into the house. This helps to make the properties much more marketable and it helps to make sales happen faster. Usually, a homebuyer cannot afford to remodel or make improvements to the home right away, which often turns them away from buying it altogether. But thanks to this loan program, it is possible to buy the home of your dreams.

The 203(k) loan program is basically a renovation loan. It was designed specifically to help borrowers purchase, repair, remodel and renovate the home at the same time with a single loan. It offers favorable loan terms, higher loan limits and flexible downpayment options to make it more affordable for more people.

The popular 203(k) Streamlined Loan allows for the purchase or refinancing of a home, and it also covers the remodeling costs up to $35,000. Once the purchase is made and the transaction is closed, the renovation funds are held in escrow. They are then releasted through a draw process to pay for the remodeling, but all work has to be pre-determined for the loan, and completed by approved contractors.

The FHA hopes that this loan program will help to stimulate the economy and get properties moving. If you are interested in working with this program, give us a call and we would love to help you find and update that perfect home! 1-888-883-5252.

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REO Initiative to Rent Out Foreclosed Properties

The FHFA has announced the first step of an REO initiative that will aim to help the cities that got hit the hardest nationwide. Investors can pre-qualify to establish eligibility so they can bid on transactions during this initial phase. Qualified investors will be allowed to purchase foreclosed properties but they are required to rent these out for a specified number of years. The hope is that this rental period will provide relief for depressed housing markets that are overwhelmed by foreclosed properties, and will also provide more rental options. This should put the country one step closer to stabilizing communities and maximizing the value of homes.

This REO Initiative is partnered with the U.S. Department of the Treasury, the HUD, the FDIC, the Federal Reserve, Fannie Mae and Freddie Mac. They worked together to find options for selling single-family REO properties that are currently held by Fannie Mae, Freddie Mac and the FHA. During this first phase, Fannie Mae will offer pools of rental properties, vacant properties and non-performing loans focusing on the areas that were hit the hardest.

Those that have pre-qualified to receive more information about these properties must meet the following criteria: (a) financial wherewithal to acquire the assets; (b) sufficient experience and knowledge in financial and business matters to analyze and bear the risks of the investment opportunity; and (c) agreement to keep certain information about the REO and related matters confidential.

Investors can register at the FHFA's REO Initiative page.

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Congressional Push for Fannie/Freddie Principal Reduction

Congressional Democrats are currently pushing for a Fannie Mae and Freddie Mac Principal Reduction. If a settlement with banks isn't helpful enough for homeowners, they want a federal housing regulator to write down mortgage principal for these government-backed loans.

The federal government is actually very close to coming to an agreement with mortgage servicers that could help nearly a million homeowners. The deal would require the nation's five largest banks -JP Morgan Chase, Wells Fargo, Bank of American, Citigroup and Ally Financial- to spend more than $25 billion to help borrowers who had signed off on foreclosure paperwork without reviewing the documents properly.

It is not yet clear who would be eligible for this settlement that would offer 1 million borrowers an average of $20,000 in principal reduction.

If this settlement doesn't help those who are with Fannie Mae and Freddie Mac, more than likely the Democratic lawmakers will continue to push the Federal Housing Finance Agency (FHFA) to provide homeowners with these principal reductions. They especially want to help those who owe more than their houses are worth.

This settlement is expected to be the largest principal reduction of the housing crisis and will hopefully boost the economy and housing market. However, this deal could take several more weeks to complete. The White House was hoping for a resolution by Christmas, but they are now hoping it will be resolved by Tuesday's State of the Union address. They want to have all 50 states sign on to a final deal but they may not meet that goal.

For more information about this, view our source.

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Bank of America Suspends Cash-out Refinancing

For the second time in four months, Bank of America Home Loans have decided to suspend cash-out refinancing. The first time was in October when they suspended cash-out transactions insured by the Federal Housing Administration and the Veteran Administration.

According to the U.S. Mortgage Market Index report for the week ended January 13th, inquiries for refinance loans have climbed 107 percent since the end of 2011. BofA's recent decision has come about because of this elevated volume of refinance activity. They say that cash-outs will continue to be on hold until this elevated activity recedes and until it is clear that overall processing for non cash-out transactions will not be negatively impacted from the resumption of cash-out lending. Cash-out transactions that are already in process will not be impacted by this recent decision.

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