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

News You Can Use - Tax Credit, Unemployment, Boulder Housing Market

If you read my blog you know that I will give you the straight scoop - no sales pitch or baloney here! If you dare, read on ....


As long anticipated, the House and Senate have both approved an extension to the homebuyers tax credit of 2009. The credit will now be extended to April 30, 2010. First time homebuyers will get a credit up to $8000 depending on income level, and veteran homebuyers who have been in their home for at least 5 years can receive up to $6500 depending on income level. The original tax credit was set to expire November 30th. Every realtor in the country is now going to be emailing their clients saying "now is the time!" Is it??


This IS good news for homebuyers who want to keep some cash in their pocket after their purchase. The other good news is that interest rates are still at near-record lows. I researched rates in Colorado today and for a $250-299k conventional loan with no points borrowers can get rates between 4.75-5.125% with varying fees. A jumbo in the $500-549k range will be at 4.875-6.4% with varying fees.


The bad news is that unemployment figures continue to be discouraging. At the national level CNN reports that we hit 10.2% in October 2009, the highest level reached since 1983 and indicating 22 straight months of declining employment. Worst case forecasts for the first two quarters of 2010 are in the 10.5% range. Among the hardest hit sector are teens ages 16-19 whose rate rocketed to 27.6% in October. Teens now have to compete with adults for jobs in industries like food service and retail, typically dominated by the teen demographic. Obama has signed a bill allowing the jobless to receive up to an additional 20 weeks of unemployment benefits which is sure to help out many households, even in our relatively stable and affluent Boulder area.


In Colorado we are hovering around a 7.0% unemployment rate. The state's unemployment figures for October will come out on November 20th. In our immediate area, for September 2009 Boulder County was at 5.5%, Broomfield County was at 6.6% and Weld County was at 7.5%. Some major area employers (IBM, Sun) have announced pending layoffs but it is unclear how many of them will come from our area. And of course our white knight Conoco Phillips is scheduled to bring jobs to our area but the initial build-out of 2012 is suspect, and could be pushed out by a couple years. That's a chicken we can't count until it hatches!


The term "jobless recovery" is being thrown about, but how our nation or our local economy can experience a real recovery without putting more people back to work is beyond me.


All that bad news being said, in Boulder (MLS sub-area 1) median home prices remain stable in the low-mid $500k range. Louisville (MLS sub-area 2) median home prices have jumped all over the place, ranging from $310-425k over the course of 2009 so far, coming in at $$324k in October. Longmont is steady in the low $200's. Superior is a robust market seeing median home prices range from $342k all the way up to $675k! Proximity to transportation, employment, open space, good schools, etc... continue to bolster the Louisville-Superior area's housing market.


So ... to buy or not to buy ... Speaking from purely my own opinion if you have some confidence about your employment situation and intend to stay in your house more than 2-3 years then this really IS the time to buy. And that's honestly not realtor-speak, because I am not one! The late fall-winter selling season typically gives buyers the least amount of inventory to look at, but the most negotiating power. The combination of the tax credit and crazy-low interest rates makes this a perfect storm for you (in a good way). If you have dreams of becoming a fix and flip artist though, think again. Probably too risky given that we don't know exactly where housing prices are going to go.


If you are a seller, consider putting your home, or keeping your home, on the market this winter. Yes, there are fewer buyers, but those in the market are serious. Relocation buyers (job transfers, life changes, etc...) are still out there too in addition to the local prospects. And your home will look so pretty decorated for the holidays! BUT (and there is always a "but") these buyers are going to be looking for a deal, if not a steal. If you want top dollar for your home then frankly don't list it. (And expect to wait until around 2014 to get your price! again, my opinion)



As a seller, if you have some room to negotiate and just want out, then price it fairly given it's condition, age, and location. Offer a buyer something for "free", like a view, or landscaping. How do you do this? Price it similar to a recently sold home or another currently listed home that perhaps didn't have your location backing to open space, or your soothing backyard pond. This way the buyer thinks they are getting a freebie. Let go of that "gotta get" mentality and the ego that compels you to want to get more than your neighbor did for their home. This is not time to worry about stuff like that. I have trained many of my agents on "price positioning" and we are seeing great results.


Stay tuned for more information and insights from Colorado Landmark, Realtors - your Boulder and Front Range experts.



Pam Metzger
Colorado Landmark, Realtors
pam@coloradolandmark.com
twitter = @pmcolorado

Why the Time to Buy is NOW!

Many buyers are dipping a toe into the market, but not ready to take the plunge. They are concerned that the real estate market hasn’t hit bottom, and therefore they are playing the waiting game. But it’s important to realize that interest rates are at record lows – in fact, the average rates we are seeing now haven’t been seen since the early 1970s. And many people don’t understand that interest rates can make a huge impact on your overall costs – sometimes even more than the actual purchase price of the property.

For example, if you purchased a house priced at the appropriate current market value of $250,000 with today’s rates (30-year fixed are around 4.875%), your payment would be around $1323.00. If, on the other hand, you wait for the price of the house to drop, thinking your market hasn’t bottomed yet, and the price does go down 10% - to $225,000 but rates have risen 1%, you could be looking at the same monthly payment. AND during the time you wasted you were paying rent towards someone else’s mortgage (your landlord!). AND if you are a first time buyer you only have until December 31st to take advantage of the $8,000 tax credit.

Additionally, if you wait too long and “miss the boat”, there could be less inventory when you eventually decide you ARE ready – resulting in fewer options and a more expensive mortgage.

Your realtor should be able to refer you to a lender who can put together this type of break-even-analysis for your specific situation and help you determine if it is the right time for YOU. At Colorado Landmark, Realtors we work with a variety of excellent reputable local mortgage lenders - let us know how we can help!


Jennifer Fly
Broker Associate, Colorado Landmark, Realtors
jenniferfly@coloradolandmark.com
Twitter = @JenFlyColorado

Good News times Three – Finally!

I am in sunny Scottsdale, Arizona getting ready to attend the 2009 Leading Real Estate Companies of the World annual conference this week. This year the theme of the conference is The Power of the Bold, which is entirely appropriate for what I wanted to write about today.

I was inspired to blog today after reading my hotel copy of USA Today. I usually catch my news in small doses these days as the gluttony of bad economic news and discouraging headlines has been too much to take. Today however I was riveted to the newspaper because of three headlines.

“Areas of Economy Swelling with Jobs” was the first one that caught my eye on the front page. Hallelujah! How exciting to hear that there are sectors of our economy and geographic areas that are seeing growth. The areas cited in the article were health care, government, education, energy and mining. I guess this doesn’t come as a surprise given that these are areas of focus for the new administration in Washington. Many people that have recently lost their jobs will be turning to these industries, hoping that their skills will transition, or that they can attain new skills without too much downtime.

“Stocks Score Huge Rally on Hopes that Worst if Over” was the second attention grabber. This news has many people thinking that stocks might finally be on the mend. Monday’s rally was significant in that on some levels it doesn’t appear to be a blip. The rally had breadth in that all 30 stocks in the Dow saw increases, and as did all but 4 of the S & P 500. The rally seems to have some sticking power too – the best 2-week rally since the bear market took hold. And all 10 industrial sectors of the S & P 500 saw gains, indicating that industries are healing. This is all great news for people who have been seeing their retirement, college or down-payment funds take a beating. Hopefully this means there is public confidence in the government’s latest plan to “ungum the pipes”.

And finally, “Home Sales Rose a Sweet 5.1% in Feb.” This is the best news for homeowners trying to sell, as well as buyers who are dipping their toes back in the market after waiting out the bottom. Overall sales volume rose, meaning buyers are getting off the fence to the cheers of anxious home sellers. And prices fell sharply in many major markets, to the delight of buyers hoping to snap up a deal and enter the market in what will surely prove to be the best time to buy a home decades. Downward pressure on prices combined with the lowest interest rates I have ever seen in my own adult life – average interest rates for 30-year fixed conventional loans are at 4.89% - make home buying now a “no brainer” investment decision.

So again I ask the question – why are you still on the fence when you should be in your new yard? Is it because you have a house to sell that isn’t moving? I’ll write again shortly about the most important things a homeowner can do to position their home to sell. If you don’t have a home to sell then it is just downright ridiculous to think that these aren’t the first signs of stabilizing home prices. And even if we haven’t hit bottom yet, we are surely getting close. If you think you will hold on to the property for 2 years or more, then this is the time to be powerful, be BOLD! Go forth and buy!

If you appreciate this information and would like more, please let me know by contacting me at pam@coloradolandmark.com. I am the Relocation Director here at Colorado Landmark. I am NOT a licensed real estate professional and I won't try to sell you anything. As the Relocation Director it is my job to assist people moving in and out of the Boulder/Longmont/Broomfield area in any way that I can. I stay abreast of the current trends and statistics and can help you dig up information, analyze your current situation, and make decisions about where you want to go.

Pam Metzger

Director of Relocation

pam@coloradolandmark.com