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All Of This Is Because Of YOUR Help!

You’ve been so awesome, I wanted to share this. We got approved by a local bank to buy the house we want – now all we have to do is sell ours!!! All of this is because of YOUR HELP! You have been phenomenal and I am truly thankful.

– Jen H.

Thinking About a New Home? Start with a Credit Appraisal

This blog is also featured in The Huffington Post.

Dreaming of purchasing a new home in the next several months? Whether you are a first time home buyer, upgrading to a newer or bigger home, or downsizing into a smaller residence, the first thing that you should do is have your credit appraised.

Today’s real estate market is one that should only be entered into as an educated and fully prepared buyer. Demand is high in today’s market, and available home inventory is low. If you are not educated and well-prepared to make a firm offer, your offer will get less consideration from a seller than an offer from a customer who is ready to proceed to closing.

Can you imagine the anguish of finding the perfect home for you and your family, at the perfect price, only to discover that there is a credit problem that will keep you from securing a mortgage on that home? Credit issues often take time to resolve – weeks, if not months – could pass before you can successfully resolve your credit problems. Chances are, the perfect house with the perfect price is going to be sold to another buyer in today’s market.

How do you avoid that sort of disappointment? It’s simple, start with a credit appraisal! A credit appraisal is a thorough, detailed review of your credit history by an individual with expertise in reviewing credit reports, as well as detailed knowledge of mortgage underwriting standards.

An appraisal is just not about your credit score. You can have a high credit score (even in the 700s), but still have items on your credit report that will block you from being approved for a mortgage. We see these type of challenges at our credit restoration company regularly.

It is vitally important that your appraisal include credit history and a credit score from each of the three prominent credit reporting agencies (Transunion, Equifax and Experian). Mortgage providers look closely at the reports from all three of these agencies, and frequently accounts that are reported by one bureau aren’t being reported by the other two. If a derogatory item shows up on even just one of the reports, it is likely going to be an obstacle in your mortgage pursuit.

Credit history, alone, like the one you are able to obtain for free once a year is not enough. It is also essential that you have scores from all three bureaus reviewed.

It is imperative that these three scores are FICO mortgage scores. Believe it or not, there are all sorts of different credit scores out there today, and not all of them are the type of scores that are used to determine your eligibility for a mortgage. FICO (an acronym for Fair Isaac and Company, who now simply call themselves “Fair Isaac”) is a scoring model, or mathematical algorithm, that is purchased by credit bureaus and used to compute your mortgage credit score.

That score that you get for free, on your credit card statement or from online credit monitoring services? More than likely, it is not a FICO mortgage score. Other credit score models used by those companies can be as much as sixty points different from your real FICO score (we see it all the time).

Why does an accurate credit appraisal require all three scores? Mortgage companies use something called your middle score. I wrote about it in detail, here: The Shamrock and Your Credit Score, a few months ago. In short, your middle score is not an average of your three scores, and it’s not even the median of those scores. Mortgage companies and banks “throw out” your high score and your low score – sort of like how Olympic diving and ice skating are scored. They look solely at the middle of your three scores to determine whether you meet the credit score portion of their underwriting standards.

Even if your appraisal indicates that your credit score is high enough to qualify for an entry level loan (like an FHA loan) you may have the time and the opportunity to strengthen your score to a point where more favorable loan products might become available to you. Your time will be well spent building your credit score while you shop for your new home.

Once you have had your credit appraised and certified as credit qualified, you are “Real Estate Ready.” It’s time to take the next step and proceed to your bank or mortgage company for pre-approval.

Not to be confused with a pre-qualification, which is essentially a “rough” calculation of how much of a loan you might qualify for, a pre-approval is a written estimate from a lender stating how much you will likely be able to borrow based on your (now certified) credit and other financial information (like your earnings history.)

The application for a loan pre-approval often requires submitting pay stubs, bank statements, tax returns and other financial documents. Most lenders charge nothing for the application, since they are hoping to win your business, but some charge you (usually less than $100.00) to cover the cost of a credit check.

A credit appraisal will not only spare you from disappointment, it will also save you time. Why spend your valuable time with a realtor or lender, only to be told that your credit doesn’t qualify you to buy a home. With a certified credit appraisal the question, more often than not, changes from “Will I qualify for a loan?” to “How big of a loan will I qualify for?”

Get your credit appraised today. Knowing that you are “Real Estate Ready” and being certified accordingly, will provide you with significant leverage when you are ready to make an offer on a home. It provides assurance to the seller that you will be able to secure financing and makes your offer significantly more attractive than an offer that is contingent upon financing being secured.

Does a loan officer have a duty to disclose receipt of a “referral fee” from a credit repair company?

Some credit repair companies obtain their customers by paying “referral fees” to loan officers who have turned those customers down for a loan.
By necessity, a credit repair company passes those fees on to their credit repair clients. That’s how business works.
That creates a potential pitfall for a referring loan officer. They, and by extension, the company that they work for are receiving “income” for that referral. That is why the credit repair company that paid them a referral fee last year probably sent them an IRS Form 1099 for that payment this past January.
Does the Real Estate Settlement Procedures Act, (Title 24 CFR section 3500 et seq.) require that you disclose that income to your mortgage loan customer, should the credit repair company properly return them to you ready for a mortgage?

Think about it…

If a loan officer is sending someone to a specific credit repair firm, and:

1. Telling them that they “need” to have a higher credit score in order to qualify for a mortgage loan, and
2. The cost of that credit repair service is higher for them because of the fact that the loan officer and or his company were paid a “referral” fee
-Is that cost fully and accurately disclosed to the customer in the loan settlement documents?

In effect, isn’t the customer paying more to obtain a loan than they would have had the loan officer not received a referral fee?

In the interest of “full disclosure”, should that referral fee  be reflected on the Settlement Statement ( HUD-1)?

 

 

I Couldn’t Be More Pleased

Phoenix Credit Consultants did everything they say they can do and more. I needed to repair years of bad credit, so after researching a few different companies and getting a very good referral from a friend about PCC, I went ahead with the process. It’s been about six months and I’ve gone from a credit score in the high-500s to over 700. I couldn’t be more pleased. I recommend them to everyone I know with credit issues.

John K.

 

PCC-Mall-Advertisement-black-314-restore (1)

What a week!

This week ended on such a high note!

Beyond the daily successes, we have two really great stories to share!

1. We successfully raised a client’s credit score by 89 POINTS in under FIVE WEEKS!

2. One of our clients obtained mortgage approval after just 35 days in our program!

We’re so proud of the work we’re doing and nothing makes us happier than results like these. Phoenix Credit Consultants is a GOAL-ORIENTED credit repair company. We want our clients to reach their financial goals in the least amount of time possible. Our staff of credit experts is fully committed to helping each and every client meet achieve their success at their own pace and their own comfort level.

 

 

How To Start The Home Buying Process As A First Time Homebuyer

FIRST TIME HOMEBUYER? WHERE DO YOU START THE PROCESS?

SQUARE ONE-CLEAN UP YOUR CREDIT- Unless you are holding a winning Powerball ticket, are sitting on a substantial nest egg or are being financed by a wealthy relative, you will need a loan to afford your first house. Mortgage Companies and Banks use credit scores, also known as FICO scores, to evaluate the potential risk of lending to individuals. The higher the number, which runs from 300 points to 850 points, the better your credit score.

Knowing your score well in advance will give you time to clean up any mistakes, like tax liens that were paid off many years ago or parking tickets that you paid but that are still showing up on your credit report.

Sometimes it takes months to clear your credit up, and by then the seller has sold your dream home to another buyer and you are back to square one.

Knowing your score will also give you time to boost your number if need be. The three major credit-reporting bureaus generate their own FICO scores based on the data they collect.

To find out where you stand, contact a reputable credit firm like Phoenix Credit Consultants, (314) 429-2040 or www.123PCC.com. Even if your credit score is high enough to qualify for an entry level loan (like an FHA loan) you may have time and the opportunity to strengthen your score to a point where more favorable loan products might become available to you. A company like Phoenix can help you raise your score as quickly and as effectively as possible.

SQUARE TWO-GET PREAPPROVED- Not to be confused with a prequalification, which is essentially a “rough” calculation of how much of a loan you might qualify for, a preapproval is a written estimate from the lender stating how much you will likely be able to borrow based on an initial review of your credit and financial information. The application often requires submitting pay stubs, bank statements, tax returns and other financial documents. Most lenders charge nothing for the application, since they are hoping to win your business, but some charge you (usually less than $100.00) to cover the cost of a credit check.

Why not wait until you’ve actually found a place to get a preapproval letter for a mortgage? 

  1.  Because it will help you determine how much you can afford.
  2. It will provide you with significant leverage when you are ready to make an offer on a home. It provides assurance to the seller that you will be able to secure financing and makes your offer significantly more attractive to an offer that is contingent upon financing being obtained.

Preapproval letters typically expire between 90 and 120 days, but can be quickly updated with a phone call to the lender.

SQUARE THREE-ASSEMBLE YOUR TEAM- In addition to a credit consultant and loan officer, you will need to add a real estate agent to your team.

Look for a real estate agent that has an established track record working with buyers in your situation, and who will get back to you promptly.

Look for an agent that is experienced, one who frequently works with entry-level buyers. You want to feel like you’re working with someone who has done this time and time again, not someone who is learning the process as you do.

You want an agent who can help you come up with a sound offer based on market analysis and who will put together a well-rounded application package on your behalf. 

Your agent’s commission, typically 5 or 6 percent split with the seller’s agent, will ultimately come out of the sale proceeds. 

SQUARE FOUR-HIT THE STREETS!- With your credit restored, your preapproval letter in hand and your realtor by your side, it’s time to hit the streets!

Looking to hop in your car and drive from prospective dream home to prospective dream home this spring or summer?

Then now is the time to get started at square one. Contact the credit experts at Phoenix Credit Consultants today (314) 954-7429 or www.123PCC.com. We can help you obtain your credit report and a reliable mortgage (FICO) credit score.

Ask the experts at Phoenix about their unique, “Goal Oriented” credit restoration process. (GOPHOENIX!) That process is designed to get your credit score where you want it to be as quickly as possible and gives you control over how long that process takes.