News Alert  2/20/2008

What is a Credit Score, How is it calculated, and How can you Boost it?

Your Credit score is made up of:

       1.  35% Record of Payment History 

       2.  30% Current Debt Level

       3.  15%  How Long you've had credit (seasoned credit)

       4.  10% How often you apply for your credit

       5.  10% Credit Mix (secured credit - car or house / mixed with credit cards)

        Boost Your Score:     

      1. Payment History  - Pay it 3 days before it’s due (7 days if by snail mail)

       2.  How Much Debt you have;  (Reduce it.)

       3.  If you have a seasoned account, don’t close it off…physically.  You want to keep your oldest cards open (with small balance and always paid on time).

 1/29/2008  
 
With all the Craziness going on in the Mortgage world...  Palm Pacific Mortgage wants to assure you that we are still
here to serve your mortgage financing needs.
 
Many companies have closed, and many mortgage broker companies (Many that I never thought I'd see close - Very big and reputable companies) have closed, with their loan officers left to scramble for jobs in the Banks, or trying their hand at opening their own broker companies.
 
The rates are dropping ...  If you have been paying attention to the news, it seems that every day you hear that the FED is cutting rates. This is good news for those that have equity in their property (at least 80%  equity for rate and term refinances / 70% - 75% Equity for cash out refinances).  Good for those buyers that have a 20% down payment.  And good for those that have Good credit, and can do Full Documentation loans.
 
Mortgage Qualifications have tightened . . .  Because of the soft Real Estate Market Nationwide, lenders are going back to asking for Full Documentation.  This means that if you (your clients) have regular paychecks, and have their tax returns filed up to date, then they will have an easier time to qualify than someone who is self employed, or has a "unique" income situation.  The Lenders have also raised the bar on FICO score requirements.  700 and higher seems to be today's norm (it could change tomorrow, so don't hold me to this quote).  Debt ratio is also going back to 41% back end;   debt  (proposed mortgage payment, plus car loan[s] and credit cards) divided by your gross income equals your debt to income ratio.
 
Other factors...  as I mentioned, the day to day of what the guidelines are, seem to be just that "Day to Day."  Leasehold is being scrutinized, and you can bet that the lenders will want to Review the Appraisal,  and in most cases will come back with a lower value, due to the current declining market.
 
In general...
If you currently have a 30 year fixed Rate loan (which most of my clients have), and are in the 5% to 6% rate range, you have a good mortgage.  If your rate is higher than 6.5% you may want to consider refinancing to lower payments, and a lower rate. *Assuming you are able to meet the tigher mortgage qualifications.