Your Mortgage Matters

In a mortgage world that now seems to be rife with red tape, getting to the closing table quickly can be a daunting task.  Unfortunately, sometimes circumstances surrounding a purchase transaction does not allow for a full month or more to get the deal closed.  To address these unique situations, Ruoff Home Mortgage proudly introduces the Ruoff Express Program.

Click on this graphic link on the ruoff.com homepage and climb on board.

The Ruoff Express Program allows purchasers to get to the closing table in only 15 business days.  To take advantage of Ruoff Express, all the borrower has to do is go to the ruoff.com home page and click on the graphic image link of the Ruoff Express high speed train.  You will be instructed to fill out a very short form requesting the expedited service.  A Ruoff Home Loan Advisor will contact you to coordinate the Express service.

While almost every Ruoff Home Mortgage loan product is available, the following products are excluded from the program: VA, FHA 203(k) rehabilitation, Fannie Mae HomePath and HomePath Renovation loan products are not eligible.

To learn more about this exciting new service, go to ruoff.com today.

Tweet This Post

It seems that we can’t turn on the television these days without seeing TV ads by freecreditreport.com.  These ads feature a young male character whose life has been ruined because of credit report problems.  In one commercial, he gets married to his dream girl who failed to share with him that her credit was bad.  The result–instead of a respectable home in the suburbs, they have to live the basement of her parents home.  In another ad, he is dressed up in a pirate suit working as a server in a seafood restaurant.  All because a hacker stole his identity.  The subsequent damage now prevents him from getting a decent job because some employers now pull credit reports as part of their due diligence when hiring.

Ben Stein is now the pitchman for freescore.com featuring a squirrel, Filbert, as his side kick.  Mr. Stein informs you that “life costs you more without Free Score”.

Your credit score determines whether your loan request will be approved as well as the rate of interest you will pay

While a poor credit score may not have you living in your in laws basement, a less than stellar score will cost you more and in ways you may not realize.  Your credit score now determines the rate of interest you will be charged on your credit cards and car loans.  Even if a landlord is willing to look past your less than stellar score and lease you an apartment, you may be asked to pledge a larger security deposit.  Insurance companies now factor your credit into the premium you are charged.  If your middle credit score is less than 740, you will most likely pay more when you apply for a mortgage.  These surcharges, known as loan level price adjustments, are more severe the lower your score.  According to financeglobe.com, the best interest deals for credit cards like the Capital One Venture Rewards Visa Card, a score of 800 is necessary.

Most people understand the importance of maintaining a positive credit history.  However, not so many understand the metrics used by the credit reporting agencies when they determine your score.  Fair Issac Corporation, creator of the FICO score, provides the following insight of what goes into their formula:

1.  Your payment history – about 35% of a FICO score
Have you paid your credit accounts on time? Late payments, bankruptcies, and other negative items can hurt your credit score. But a solid record of on-time payments helps your score. 

2.  How much you owe – about 30% of a FICO score
FICO scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be. 

3.  Length of your credit history – about 15% of a FICO score
A longer credit history will increase your score. However, you can get a high score with a short credit history if the rest of your credit report shows responsible credit management. 

4.  New credit – about 10% of a FICO score
If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.  If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score.

5.  Other factors – about 10% of a FICO score
Several minor factors also can influence your score. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loans, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores.

While it is important to manage the behaviors that affect your credit score, it may also be wise to utilize the alert services offered by the reporting agencies.  This is a fairly affordable service that is a vigilant safeguard against identity theft.  Any time there is a third-party inquiry, also known as a “hard pull”, you are immediately notified.  If you are applying for credit, then the alert would be expected.  If you have not recently authorized a company or individual to access your credit file, then you have can take immediate action. 

If you know you will be in the market to purchase a car or home in the near future, it is wise to check out your credit report and score, before you make application with a lender.  You can do this for free.  If there are inaccuracies, it is better to address them prior to applying for a loan as getting these erroneous items removed can take up to 60 days.  You can request a free credit report from the Federal Trade Commission website by clicking here .   Your credit score doesn’t just affect whether or not you get a loan; it also affects how much that loan is going to cost you.  As your credit score increases, your credit risk decreases. This means your interest rate decreases.

You can learn more about how you can improve your credit score by visiting www.ruoff.com where you can get in touch with a home loan advisor.  Our staff will be glad to help you utilize helpful tools like credit score analyzers to make sure you are getting the lowest possible rate on your next home loan.

Tweet This Post

Almost every business day, the economic calendar has a scheduled releases of one of several different indices relating to unemployment, prices and overall economic growth.  Each piece of data is supposed to be a brush stoke on the economic canvas.  Collectively, they are supposed to paint a picture of our economic future.  One of the key components that receives considerable attention of late is the S&P/Case Shiller Index.

This report is released every month and is based on data gathered from two months earlier.  If you visit the Standard and Poors website, you will see that their formal name of the report is the S&P/Case Shiller U.S. National Home Price Index.  Their most recent report, released March 29th informs us that home prices have dropped 3.1% over 2010.   As a buyer or a seller in the Northern Indiana market, I’m not sure I would put too much into this data for a number of reasons.

Homes under contract last fall should not be regarded as an accurate indicator of where the market is today.

Firstly, the data is old.  This is even more so the case with the latest report.  The report examines home sales transactions that closed in January.  Normally, those would be homes under contract in December.  However, refinance loan volume was so high in the 4th quarter of 2010, underwriting queues were  significantly backed up.  Most of those January closings on a national level were transactions that went under contract all the way back in October or November.

Secondly, while the S&P/Case Shiller claims to be a U.S. National Home Price index,  they actually only evaluate 20 markets across the country.  What is the closest market to Fort Wayne?  Not Indianapolis–Indy isn’t even included.  Chicago is the closest geographically, but on several levels, is hardly emblematic of Fort Wayne or even South Bend for that matter.

Also, the Case Shiller ignores all multifamily homes, condos and new construction.  While the Chicago real estate market has been devastated by the economic slow down that began more than three years ago, Their market has a much higher saturation of condo sales that are left out of the report.  So, even the Chicago market may not be down as much as the report suggests.

What is the number one piece of data I like to rely on when trying to gauge the strenth of the real estate market in Northern Indiana?  I look at the number of loan applications coming into Ruoff.  It is “now”–real time data.  It is here in our own backyard.  I have the luxury of being able to see it with my own eyes and this is what I see.

The first 75 days of 2011, there was a dramatic drop off in mortgage applications with the total number being less than 60% as compared to the same period a year ago.  However, since the 21st of March, the pace of applications has exploded to levels similar to those realized at the height of the refinance boom in Q4 of 2011.  There is one big difference.  These are largely not applications to refinance.  They are purchase transactions.  It very well could be the tell tale sign that we are finally bouncing of the bottom of the housing price curve.  Unemployment is now well below 9%.  Not a terrific number, but at 8.8%, the consistent downward trend over the last 6 months has been encouraging.

Why is it a good time to “buy up”? For several reasons.  While home prices may be in the early phases of an upward bend, there are incredible deals to still be had.  Timing is everything and real estate is no exception.  Interest rates began creeping upward at the end of last year, but over the last three weeks, they have stabilized  and pulled back some.  They remain at historically low levels.

Lastly, in spite of the recent surge in applications, underwriting queues are still very low.  You can get under contract on a home and closed in less than 30 days at Ruoff Home Mortgage.  To get your application started or to request a rate quote, go to www.ruoff.com.  To learn more about the S&P/Case Shiller U.S. National Home Price index, go here.

Tweet This Post

Low mortgage rates continue to dominate as pending home sales increase making the cost of home-ownership more affordable for today’s home buyers.  Informal polling of Realtors all over Northern Indiana has indicated a consensus that buyer activity is on the rise.

Low 30 year fixed mortgage rates are at 4.625%, 15 year fixed mortgage rates are at 3.750% and 5/1 ARM loan rates are at 3.000%. These are the lowest mortgage rates available to well qualified borrowers with a 1% origination fee. Borrowers choose low fixed conforming mortgage rates because they offer the security of monthly mortgage payments that remain the same for the life of the loan.

Interest rates seem to have stablilized after a run up that began in Deember last year.

FHA mortgage rates continue to be low and competitive making them attractive, especially for first time home buyers.  FHA 30 year fixed mortgage interest rates are at 4.375%, FHA 15 year fixed mortgage interest rates are at 4.000% and FHA 5/1 ARM loan rates are at 3.750%. FHA mortgages offer low mortgage rates as well as low down payment requirements. On the other hand, FHA closing costs (APR) are usually higher due to the upfront mortgage insurance premium and other FHA fees.

The National Association of Realtors reported yesterday that pending home sales increased in February. In other reports, personal income increased as well as personal spending.

Current Ruoff Home Mortgage 30 year fixed mortgage interest rates are at 4.875% (5.065% APR).  Mortgage rates are priced based on several variables.  Loan to value (LTV), debt to income ratios (DTI) and of course, credit score are just some of the factors that ultimately determine the interest rate each borrower will be able to secure.  To recieve a no obligation rate quote, visit www.ruoff.com, where you can discuss interest rates with a “live” online home loan advisor.

Tweet This Post

The home-buying tax credits that were so popular last year when the real estate industry desperately needed a shot in the arm are still available to one group of prospective buyers–Active duty military members.  But the deadline for this program in approaching quickly, which means real estate professionals should jump at the opportunity to assist those still eligible in purchasing a home.

Active members of the U.S. Armed Forces may still be eligible for a homebuyer tax credit.

Service members who served at least 90 days of active duty from January 2009 through April 2010 may be eligible for the $8,000 credit for first-time buyers or the $6,500 credit for existing homeowners. Service members have until April 30 to sign a purchase agreement and until June 30 to close on the home.

They also face the same general requirements that civilians did, including:

• The purchase price cannot exceed $800,000
• Buyers must be at least 18 years old
• Individuals can’t have an income greater than $125,000; married couples filing taxes jointly can’t have a combined income greater than $225,000
• First-time buyers cannot have owned a home in the last three years

The requirements for the $6,500 credit are the same, except that buyers must have lived in their current home for five of the last eight years.

Thousands of veterans and active duty service members serving in Iraq, Afghanistan and other destinations abroad may be eligible for these tax credits. They can be claimed no matter the loan product.

For many prospective buyers, the VA loan product may represent the most cost-effective path to homeownership. These government-backed loans come with no down payment and feature flexible credit and underwriting standards.   VA loans offer rates that are typically lower than conventional rates, and VA loans have no private mortgage insurance or prepayment penalties.

To learn more about VA loans or the entended tax credit benefits for active service millary members, visit ruoff.com.

Tweet This Post

The housing market has finally been showing signs of life the last eight weeks.  As buyers contemplate the decision to buy a home, excepting for first-time homebuyers, they are typically faced with one huge obstacle–selling their existing home.  While getting your home sold can be a significant undertaking, there are some steps you can take that will greatly enhance the process.

Step 1:  Even the most tidy sellers are in need of de-cluttering their homes.  Some common areas of focus include the following: kitchen planning desk counters should be clean and sans bills and other papers, refrigerators should be picture, report card and magnet free, bathrooms should have toiletries, electric toothbrushes and razors out of site, medicine cabinets should not have prescription meds visible, etc.

Step 2:  “Depersonalize” your home by removing family pictures and other family related keepsakes.  The net effect should leave your home look like it is suffering from an ”identity crisis”.  This is actually a good thing.  While those items are what make your house feel like a home, they also inhibit your potential buyer’s ability to imagine your house as his or her family’s home.  Hobby displays, like plate collections commonly displayed are actually better off removed as well,  They tend to distract the borrower and unfortunately have a cluttering effect.

 Step 3:  Cleanliness is next to godliness!  Your entire home should be cleaned top to bottom with the intent of passing the “white glove” standard.  Carpets and furniture upholstery should be professionally steam cleaned.  Windows and window treatments should be cleaned.  Wipe down all baseboards and trim.  Kitchen and bathroom counters, sinks, tubs, etc. should all be scrubbed.  Clean windows will also enhance your home by allowing in more natural light.  Cleaning is particularly important when you have pets.  Any odor problems should also be dealt with.

Step 4:  Rent a storage unit to help you transition from your existing home to the home to which you will be relocating.  Sometimes removing one chair in the great room, or oversized armoire from a bedroom will make that space appear less crowded and more roomy.  Removing some of your stored items from closets, will leave them looking more spacious.  You don’t have to permanently get rid of these items of value if you have a storage unit to house them in for the transition period.  

Step 5:  When selling a home, curb appeal can’t be underestimated. How many potential homebuyers drive through neighborhoods, see the outside of a home that they like, and then have their real estate agent schedule an appointment?  If it appears that you’re decorating with overgrown weeds and peeling paint, not too many people are going to drive by your house and want to take a closer look. Instead, get your house ready to sell by cleaning up the outside. Paint if needed, or at least touch up the paint on the shutters and trim. Add some potted plants to your front porch. Create a look that is inviting to potential buyers.

A Bonus Task:  The most ambitious home seller will order their own home inspection prior to listing the home.  This will make them aware of any repairs the home is in need of.  Having these items addressed prior to listing the home will make you less vulnerable after you home is under contract and being inspected by the buyer’s home inspector. 

Having a strategy employed prior to putting the sign in the yard can ensure that your home sells more quickly and for a higher price.  Consulting with a professional Realtor prior to placing your home on the market can be a valuable resource.  To get information on financing for the home you buy after your existing home has sold, go to www.ruoff.com.

Tweet This Post

There is probably no commodity that has the ability to impact inflation like oil and it has economists’ attention as prices continue to rise. But what causes oil prices to rise? Basically, prices go up when when one of three situations occur:

Expanding world economies increase the demand for oil. A decrease in supply occurs due to a disruption of drilling. The gulf oil spill was a good example, but unrest in Libya is the current culprit. When the U.S. dollar weakens in value. Globally, oil is traded with U.S. currency. When the U.S. dollar weakens, the price of oil increases.

The rising price for crude could be negatively affecting mortgage rates.The Federal Reserve began incubating inflation almost two years ago to combat their biggest fear–the possiblity of deflation. They did this with their asset purchase plan of mortgage backed securities and then U.S. treasuries. These programs are now known as QE1 and QE2. Their sole intent was to boost asset prices and the stock market.

The rising price for crude could be negatively affecting mortgage rates.

While it takes only one of the three situations to occur, the last few weeks have seen all three occur to some degree. The world economy is awakening and is increasing demand. Unrest in the middle east is disrupting or potentially disrupting supply and the U.S. dollar is going down in value–the perfect storm.

Why is oil such an impactful commodity with respect to prices. Rising oil prices increase the “cost of doing business”. It creeps into everything from heating a manufacturing facility, the transportation costs associtated with bringing goods to market and everything in between. Additionally, it puts pressure on household budgets as they buy gasoline and heat their homes. As their budgets get stretched they need higher wages. Cost pressures on households and business converge. Businesses raise prices to cover increased costs. Household’s demand higher wages to deal with goods and services they need to buy and a spiralling effect occurs.

As inflation occurs, the dollar slides lower in value and it impacts everything including the required yeild of mortgage backed securites. Mortgage backed securities establish the cost of home loans (interest rates). Rates have increased dramatically and are up over 1% just since November. Still, they remain low from a historical perspective. If you have procrastinated the last year or so, this may be the last chance to lock-in and take advantage of low, low rates. If you would like a no obligation rate quote today, go to www.ruoff.com where you can get in touch with a Ruoff Home Loan Advisor.

Tweet This Post

You’re Back To Work Finally, But Your Credit is Still in the ICU?

With the economic meltdown that occurred at the end of 2008, unemployment skyrocketed to double-digit levels.  As companies adapted to lower revenue, the need for cutbacks in staffing resulted in huge cutbacks commonly referred to as corporate downsizing.  Unlike most since the 1950′s, this recession did not discriminate.  It rocked anyone in its path, regardless of economic status, race or gender. 

Now that the dust has settled and signs of a slowly improving economy are becoming ever apparent, you find yourself back in the workplace.  While that is a big step in turning your life around, the collateral damage associated with job loss–your credit history–is now a lingering problem. 

What options do you have to mend a blemished credit record once you have achieved some stability in your income?  You see advertisements in the newspapers and the internet.  You hear them on the radio.  You get direct mail offers and phone calls from credit repair companies all making the same claims.  They promote the ability to permanently expunge  bankruptcies, foreclosures, judgments and repossesions from your credit record.  Some even offer the opportunity to get an entirely new credit identity–legally!

The simple fact is that none of these offers are legitimate and the number of ruthless companies praying on desperate consumers has escalated dramatically the last couple years.  Federal Trade Commission warns that any company making these claims is almost certain a scam. 

Healing your damaged credit rating is possible.   You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.  Unfortunately, there is no fast food “drive up window” for the restoration process but the time can be shortened if you employ a strategy.

Recognizing a Credit Repair Scam 

The Federal Trade Commission offers the following tips on how to sniff out a would be “scammer”:

Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company recommends that you do not contact any of the three major national credit reporting companies directly.
• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
• The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

There also may legal risks.  If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

Your Rights Regarding Your Credit

No one can legally expunge information from your credit report if it is accurate. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

• You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
• Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click on annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:
  

  Annual Credit Report Request Service
  P.O. Box 105281
  Atlanta, GA 30348-5281

• It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider.

Additionally, legitimate credit repair companies and mortgage lenders have “what if predictors” that can be helpful as you strategize and prioritize what actions are most likely to have the greatest impact on achieving your ultimate goal–raising your FICO score.  Ruoff Home Mortgage offers this service to clients that are interested in accomplishing that goal.  Sometimes, your score is high enough to secure loan approval, but the approval comes with what Fannie Mae refers to as “loan level price adjustments” which simply means a higher interest rate.  Sometimes, something as simple as paying a credit card balance down can be the difference in a 680 score increasing to 724.  Consulting with a true expert who utilizes predictor tools, can end up saving you thousands of dollars in interest if you end up with a lower interest rate. 

I strongly recommend that everyone, even those individuals with pristine credit, to annually request your free report to make sure no erroneous information has been reported against you.  Getting inaccurate information can often take more than 30 days to correct.  This would be very irritating if you just purchased a home and are now under contract to close in 30 days.  Get your credit in shape first, then begin your home search.

To learn more about how you can improve or protect your credit rating with sound advice on effective strategies, visit www.ruoff.com .  There,  you can connect with a home loan advisor.

Tweet This Post