Credit Information EVERYONE Needs to Know

If you are thinking about buying a or re-financing now, or anytime in the future, one of the main factors determining your ability to qualify for a loan is your credit score. Understanding what credit scores mean, how they are calculated, and how to improve your score can make the difference in your ability to qualify for a loan and get the best possible terms and interest rates.

Credit scores range from 300-850. Here is how those scores are broken down:

780 and Above: Outstanding

740-780: Excellent

690-740: Good

620-690: Fair

62o and Below: Poor

Typically, the higher your credit score, the better loan terms you will be offered. People with scores below 620 will generally not be able to qualify for a loan.

Credit scores are determined by a number of factors including:

• Amounts owed
• Payment history
• Types of credit in use
• New Credit
• Length of Credit History

There are three major credit reporting agencies: Equifax, Experian, and TransUnion. These agencies may all have slightly different information, and they each use a different method to calculate credit scores, so your score will be slightly different from each one. Most lenders will pull credit reports from all three agencies when processing a loan. It is important that everyone checks their credit report at least once a year to ensure that the information is accurate and up-to-date. You can pull a free copy of your credit report once a year through the website http://www.annualcreditreport.com/. This website also offers credit scores, for a fee.

If your credit score has seen better days, there are things you can start doing right away to improve your score:

• Pay all your bills on time
• Work to get credit card balances below 25% of their limits
• Open new accounts only if absolutely necessary
• Lengthen your credit history
• Seek credit counseling through the National Foundation for Credit Counseling http://www.nfcc.org/
• Opt-out to stop receiving new credit card offers through http://www.optoutprescreen.com/ or call 1-888-567-8688

In Boulder County, we have a fantastic resource for anyone who is thinking about buying a home and has questions about credit or related items. The Boulder County Housing Counseling Program offers free housing counseling and classes http://www.bouldercounty.org/hhs/housingcounseling.htm. These services are available to residents of Boulder, Broomfield, and western Weld Counties.

Brought to you by:

Jennifer Fly

Broker Associate

Colorado Landmark, Realtors

(303) 443-3377

jenniferfly@coloradolandmark.com

Twitter: jenflycolorado

HARP Help for Homeowners

It has come to my attention that there is a little known element of the TARP/HARP money that may help our clients. As we all know the “Stated Income’ loan is a thing of the past and it has been difficult for self employed people to obtain financing, either purchase money or refinancing. I have recently learned with the help of one of my favorite lenders, Sarah Bozich of Chase (http://homeloan.chase.com/sarah.s.bozich), that in certain circumstances self employed people or people that once would have used a “Stated Income” scenario may be eligible for funds under provisions of the HARP.

Homeowners should be able to do a streamline refinance (for Fannie it is called: Refi Plus, for Freddie it is called Relief Refi). This is all part of the HARP....the new government Home Affordable Refinance Program. It involves a completed loan application, whatever application fee they collect up front, and self employed borrowers will need the first two pages of their tax return. This is the required proof that the Business/Income source exists. They will do a verbal VOE (Verification of Employment) on any cosigner. They may or may not do an appraisal. Even though they collect the first two pages of your tax return, there is no income reasonable risk evaluation.

Fannie and Freddie have different pricing methods so, depending on your credit score, that may or may not impact your rate .....even at that, now is a great time to purchase or refinance and this is a very easy way to go.....stated income, stated assets! Just like the good old days! You can go to Fannie's or Freddie's web sites to find out which one owns your loan – http://www.fanniemae.com/ or http://www.freddiemac.com/. Just an FYI, there is no number of financed property restrictions on these programs.

HARP or TARP … it is about time these funds start flowing to Main Street and help all of us win our way out of this recession. Good Luck and if Colorado Landmark can assist you in any way let us know – we want you to be successful!

Joel Ripmaster

Owner / Managing Broker

Colorado Landmark, Realtors

joelripmaster@coloradolandmark.com

303-641-3377