Joel Dameral's South Lake Tahoe Real Estate Blog (530-545-8827)

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Here are some tips to help improve your credit score. 

1. Review your current credit report for accuracy. Everyone is entitled to one free credit report per year from each of the three credit bureaus—Experian, Equifax, and TransUnion. Get a copy of your credit report and look at it for accuracy. First, make sure that the information in your file is about you and only you, not someone who has a similar name or a similar Social Security number. It is very common for your credit reports to have mistakes or incorrect information. At a minimum, make sure that the information you are being evaluated on is current and correct.

2. Repair credit report mistakes. If you find something on your credit report that is incorrect or missing, you should dispute the mistake by contacting the credit bureaus directly. All credit bureaus have their dispute procedures on their website. They are also required by law to investigate any disputed items and these investigations will usually be done within 30 days of your request.

3. Pay your bills on time. Sounds like a no-brainer, right? Payment history accounts for roughly 35% of your credit score. Paying bills on time is the most important thing to do. If you’re struggling to catch up, contact your creditors to work out a payment schedule.

4. Increase the length of your credit history. This accounts for about 15% of your score. Don’t cancel your old card or get a lot of new ones in a short time span because this can hurt your score.

5. Keep credit card balances low. It’s a good idea to keep the balances below 25% of your available credit. Even if you pay off your credit cards every month, a high average balance will impact your score. This accounts for about 30% of your credit score.

6. Keep new credit requests to a minimum. This accounts for 10% of your score. Every time a lender runs your credit, an inquiry is recorded. If you are trying to get a loan, don’t apply for new credit cards first.

7. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

8. Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.

9. Beware credit-repair scams. By all means, don’t pay someone to wipe away the negative items in your file. If they don’t follow through, the damaging items will reappear in two or three months.

You may also consider talking to your lender also for other options when your credit score is not were you would like it to be.

Buying a home can be a dauniting task that has both risks and rewards.  The following is a shortened version of an article that first appeared in October on RISMedia.  I think that is offers some usefull information for those people who have their sights set on the “foreclosure”.

Buying a foreclosure often is appealing to buyers trying to stretch their dollars. It’s finding a good one can that can be a challenge.  Finding the bad one is easy.

The vast majority of the banks don’t want us to advertise them as ‘bank-owned’ because it comes with a negative connotation.   This means no sign on the front lawn indicating the home is anything other than a traditional sale. A buyer probably won’t find a property advertised as a foreclosure on marketing materials.

Plus, in some markets, including Las Vegas, foreclosure inventory is actually down compared with last year as government programs attempt to keep owners in their homes and banks aren’t putting as many homes on the market.   This is making it harder for buyers to purchace a foreclosure, and those paying with cash often win a bid over someone who needs financing.

If you’re considering the purchase of a home that is now owned by a bank, it’s also important to know at the outset just how much work you’re in for — and how much it is going to cost you. Many foreclosures are in various states of disrepair; some of the fixes are cosmetic, but some can be extensive.

Those looking for the best deal probably shouldn’t rule out non-foreclosure properties.

On Wednesday the Senate voted, 98-0, to extend and expand the current first time home-buyer tax credit that is scheduled to expire at the end of November.  The house voted today 403-12 in favor. 

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6500.  Anyone who has not owned a home in the last 3 years (including first time home-buyers) would still get up to $8000.   This tax credit is only good for primary residences costing less than $800,000.  There is a phase out for individuals with incomes of greater than $125,000 and $225,000 for joint filers. 

To qualify one must sign a purchase agreement by April 20, 2010 and close by June 30, 2010.  As always, consult your tax professional before making any tax related decisions.

The following is an interesting article a friend sent me from the Chicago Tribune dated 10/11/09.  I thought it might be helpful for anyone looking to buy or refinance a home.

With low mortgage rates and a federal incentive for first-time homebuyers, you might be enticed to buy a place or refinance the one you’re in.

But new regulations on brokers, appraisers and mortgage lenders have changed the rules for getting or refinancing a mortgage. Some rules went into effect this month, and others will kick in soon.

“Over the past year, getting a mortgage as a buyer or when refinancing has become more arduous and more expensive,” said Dale Robyn Siegel, author of “The New Rules for Mortgages.”

Here are a few tips, some accounting for fallout from the credit crisis.

Don’t use a mortgage broker unless you need hand holding. In the past, brokers typically shopped your loan to multiple lenders, which was a big help. But new regulations have hamstrung their ability to efficiently shop for the best deal. Among them is a rule that lenders can’t accept home appraisals commissioned by brokers. So, you’ll have to pay for new appraisals with each lender, which costs time and money.

In the end, you’re probably better off shopping for a mortgage by yourself, said Siegel, who owns a mortgage brokerage in White Plains, N.Y.

However, if you’re very busy or need hand holding, it could be worth using a broker, she said. Just realize you’ll pay a slightly higher interest rate because that’s how the broker gets paid.

Shape up your credit. You barely needed to fog a mirror to get a mortgage or refi a few years ago. Today, it’s different.

“Qualifying for a mortgage is the most difficult it has been in decades,” said Dale Vermillion, author of “Navigating the Mortgage Maze.”

Starting Nov. 1 or Dec. 12, depending on the type of loan, anybody with a credit score of less than 620 will have a very difficult time getting a mortgage. That’s because government-backed mortgage financier Fannie Mae is tightening lending standards to the 620 benchmark, even for loans backed by a federal agency such as the Federal Housing Administration or Veterans Affairs.

To get the best rates — and save money on monthly payments — you’ll need a score of about 720 and have a verifiable, steady income, Vermillion said.

So, take steps to raise your credit score. The scoring formula is complicated, and specifics are secret. But the best ways to raise your score are: pay bills on time and pay off debt. Less known are to never close an old credit card account and try to use a very small percentage of your available credit, regardless of whether you pay off your card balance every month. And check reports at Annualcreditreport.com.

Get a fixed-rate mortgage. The vast majority of buyers and refinancers are better off with a rate that won’t change, Siegel and Vermillion agree.

“Why are you taking out an adjustable-rate mortgage that’s going to change in five years when you can take out a 30-year fixed and never think about it again?” Siegel said.

With a primary residence, it’s usually best to think long term, and that means a fixed-rate mortgage.

Gregory Karp is a personal finance writer for The Morning Call, Allentown, Pa., and author of “Living Rich by Spending Smart.”