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Credit Scores and Mortgage Loans

In today’s economy, it’s becoming more and more difficult to get your bills paid on time. After a few late payments, you may wonder what the impact is on your credit report and your credit score. Whether you have lost a job, gone through divorce, lost a spouse, or dealt with a serious medical issue, you know that any hardship can wreak havoc on your financial responsibilities. You are not alone, and we at Pink Realty help people who have dealt with these all the time. More than 43 million people in the United States have credit issues that are severe enough to make obtaining credit with reasonable terms very difficult. If you want to repair your credit and improve your score so that you can buy a home, there are some things that you should understand.

Understanding your credit report and your credit score is very important when you want to get credit. There is different credit scoring models used today depending on what type of credit you are applying for. The important thing to understand about these scoring models is that regardless of what type of credit you are applying for, the human element to judge character and creditworthiness is removed from the transaction. Mortgage credit scores typically range between 350 – 800. If you are looking to buy a car, auto credit scores range between 250 – 900. If you are looking to purchase household furniture or other goods, a consumer credit score is between 300 – 900.

In the finance world, especially the mortgage industry, a lot of Federal regulation has been implemented that has caused the banks to severely tighten their credit standards and the regulations in 2011 are just as tight as they were last year. The economy, with its high unemployment rates and increased cost of living has made it virtually impossible for the average person to maintain perfect credit. The sum of this equation has about 40% of the people who are trying to qualify for a new home loan are being denied for a mortgage.

These days in Colorado Springs, the agents at Pink Realty see that about 2/3 of the real estate listings are either short sales or REOs and 40% of the people trying to buy a home, can’t qualify. Are you one of the 40% that wants to buy a Colorado Springs Houses but you can’t because your credit score isn’t high enough? What can you do about it? We’re going to take a look at what the credit score requirements are for the different types of home loans and then we’re going to address some important credit report facts so you can create your own credit report action items that will help you succeed in getting that mortgage for your dream home.

Most lenders today require a minimum credit score of 640 to get approved for a mortgage loan. What this means is that out of the 3 credit bureaus, your middle score must equal or exceed 640. While some lenders may deviate from this standard rule, they don’t without a cost. You may have to pay a higher interest rate, come up with a larger down payment and they may require that you have enough reserves in the bank to cover several mortgage payments. So, while banks may advertise that they lend on lower scores, beware of what it will cost you. Additionally, banks don’t want to lend credit to those with a lower score than 640 because it is harder for them to sell the loan to another bank, and they only want to make loans that are marketable.

If you are applying for a conventional mortgage, your credit is most likely in good standing. Conventional loans are typically for borrowers that have a sizeable down payment and a good credit score. While many lenders issuing conventional loans require a credit score of 660, ideally they look for scores of 720 or higher. Additionally, they look for a minimum down payment of at least 5% of the sales price. Most conventional loans are underwritten by Fannie Mae and Freddie Mac, so the higher your credit score, the more favorable credit terms you will get. In today’s market, you don’t see too many conventional loans being issued, especially without private mortgage insurance. If your credit score meets the requirements and you have a down payment of 20% of the purchase price, you can obtain a conventional loan without private mortgage insurance.

If you’ve had a few dings on your credit report and you know your score doesn’t top the chart, you can apply for an FHA insured loan. While FHA doesn’t issue loans, they insure them, and their credit requirements are not as stringent. However, the lenders who are granting FHA loans may impose their own credit standards in order to better protect themselves from losses and to be able to better sell the mortgages on the secondary market. In the fall of 2010, HUD established some new credit score requirements. Borrowers with credit scores of 580 or higher were eligible for maximum financing (96.5%). Borrowers with credit scores between 500 – 579 were eligible for 90% financing and borrowers with scores below 500 were not eligible.

The VA guarantees loans to veterans and active military personnel. Lenders that issue VA loans will provide 100% financing and look for credit scores of 620 or higher.

OK, so what do you need to do to get your credit score up so you can qualify for your dream home? The first thing to do is get a copy of your credit report. You can get a free copy of your credit report from each of the 3 credit bureaus annually, however if you want your FICO score, you generally have to pay a fee. You can also ask a lender to pull your credit as well, and they can give you your FICO scores for free, but keep in mind that that credit inquiry will have an impact on your score.

We’re going to take a look at what components makes up your score and give you some tips on how you can raise your score in the fastest amount of time.

Below is a chart that defines the 5 components that comprise your FICO scores (credit score). 35% of your total score is determined by past delinquencies, 30% by your revolving credit-to-debt ratio, 15% on the average credit age, 10% based on credit mix, and 10% on credit inquiries.

Past delinquencies weigh the most heavily on your total score, which probably makes you think you should pay off all past delinquent accounts. This is not necessarily so. Depending on the age of older past due delinquent accounts, it isn’t always best to pay them off. Bad debts can only stay on your credit report a maximum of 7 years from the date of last activity. If you pay them off, the account will show paid, but the derogatory status remains and the account will now stay on your report for a maximum of 7 years from the date you paid it off. Therefore, check the dates on older past due accounts, charge-offs or collections. If the accounts are from several years ago, they will fall off your report on their own soon enough. Remember, the maximum amount of time information can remain on your report is 7 years. It doesn’t mean they will stay on there for 7 years. If you have extra money and you want to use it to better your credit score, you can pay off some recent charge-offs or collection accounts. While the derogatory status will stay, the account will show paid. Once older past due accounts drop off your report, your score will automatically improve.

The next big bang on your credit report is your revolving credit debt ratio. There are a lot of myths about credit cards and how they impact your credit score. Some people think you should only have a couple of credit cards, others think you should combine all credit cards balances into one credit card balance. Some people don’t think you should have high credit limits and some people think if you have a lot of credit cards, but don’t use them, you should cancel them. Finally, some people think if you pay off your credit card every month, you won’t establish credit. All of these are myths. The longer you have had a revolving account in good standing, the better impact it makes on your score. Remember average age of a credit file is 15% of your credit score. Keep those old accounts open! If you have one or more credit cards with high credit limits and manage them wisely, high credit limits can actually be advantageous. If you have several different types of credit cards, including department stores, keep them open.
Closing credit card accounts can actually lower your score. But be aware, lenders have started cancelling inactive accounts or lowering credit limits on inactive credit card accounts. 30% of your credit score is determined by your debt-to-credit ratio. The lower your ratio, the better! Therefore, if you have cards that have a high credit limit, but you use the cards conservatively and keep small balances, it improves your score. The rule of thumb is to keep credit card balances less than 30% of the credit limit. For example, if you have a credit card with a $1000 credit limit, you want to keep the balance on that account less than $300. The more credit cards you have with a limit and the smaller the balance you keep on those cards, the lower your debt-to-credit ratio is. If you have ‘maxed’ out your credit cards and your debt-to-credit ratio is 95 – 10%, the best way to improve your credit score is to work hard to get the balances down below 30% of the limit.

The older your credit history is the better. The longer you keep and maintain accounts in good standing, the more positively it impacts your score. If you have a credit card account that has been opened for 10 years, don’t stop using the card or the issuer might decide to close the account or stop reporting to the credit bureau. While the information might still be available, it won’t add as much weight to your score. So keep older card accounts active even if it means charging a recurring monthly bill to the account and then paying it off each of month.

While the mix of credit you have on your file only makes up 10% of your total score, it is important for lenders to see how you handle different types of credit. If you are trying to build new credit, one of the best ways is to take out an installment loan. This might be for a car or household goods. Showing that you can make regular monthly payments over time is very important.

Finally we get to inquiries, which also make up 10% of your score. There are two types of inquiries: Hard inquiries and soft inquiries. If you are requesting your own annual credit report or applying for a job and your potential employer is pulling your report, these are soft inquiries and do not impact your score, however, hard inquiries do.
If you are shopping for a new car and go to 3 or 4 different car dealerships and each one runs a report, it will impact your credit score. However, the credit bureau system detects the similarities in reports pulled and the 3 or 4 reports will count as only one inquiry. The same happens if you are shopping for a home loan. If 3 different mortgage lenders run your report, it will count as one inquiry. Where inquiries really begin to hurt your score is when you apply for various types of credit in a short period of time. If you are trying to apply for credit cards and buy a car and a house at the same time, the inquiries will not only lower your score, but raise a red flag for lenders!

In summary, we mentioned the following points that can help improve your credit score:

• If you have old past due accounts, leave them alone. Let them age and fall off your report on their own.

• If you do have past due or delinquent accounts that are current, you can pay them off. The derogatory information remains, but the status changes to paid. While this does not impact your score, it is beneficial.

• Pay down your credit cards. Lenders like to see a big gap between your balance and your credit limit. While it makes sense financially to pay down high interest cards first, if you are looking to raise your credit score, it is best to pay down the cards that are closest to their limit! Work to keep a low debt-to-credit ratio on all of your revolving credit card accounts. Keep long standing accounts active, keep high balance accounts open, but use your cards conservatively so your debt-to-credit ratio stays low. If you have high balances on your credit card accounts, you will be most rewarded by paying the balances down until they are less than 30% of the credit limit. This is where you will get the biggest bang for your buck.

There are a few other things you can do to improve your score.

• If you have accounts that are old and due to fall off your report soon, you can contact the credit bureau to dispute the account. If it is old and has a small balance, there is a good chance the collection agency won’t dispute the charge and it will be removed.

• Look for errors on your credit report. If you see accounts that are not yours, dispute them. 70% of the credit reports have errors on them. The chances of there being an error on your report are good. So review your report and if there are errors, dispute them to have them removed.

• Old, past due accounts don’t get discarded because you have new, current accounts. Sometimes time is required to raise your score. Let old bad debts just fall off when they’ve aged. To mess with them will add 7 more years of derogatory information.

• There are a few other things you can do to increase the improvement. If you have accounts that are old and due to fall off your report soon, you can contact the credit bureau to dispute the account. If it is old and has a small balance, there is a good chance the collection agency won’t want to dispute the charge and it will be removed.
Other things to consider:

Your credit score is based on the information in your credit report, so check for errors. Some of these errors can really hurt you, so review your credit report thoroughly and look for any errors in the following areas:

• Correct any late payments, charge-offs, collections or other negative items on your report that are not yours.

• Correct any credit limits that are incorrect. If your credit card company has reported a credit limit lower than what it actually is, get it fixed.
• Correct any accounts that may be listed as “settled,” “paid derogatory,” “paid charge-off” if you paid them on time and in full.

• Correct any accounts that are still listed as unpaid that were included in a bankruptcy.

• Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.

• If you’ve closed accounts and they still show open, don’t correct this. Closing accounts can actually lower your score.

• If you are trying to establish credit because you have not credit, apply for a credit card. Charge something small each month, such as a tank of gas or dinner, and pay it off each month. After establishing some credit with a credit card company, apply for an installment loan. It can be a simple personal loan that you can pay off in 12 months. You want to do this to build a mix into your credit file.

Avoid these common credit mistakes when you are trying to improve your credit scores:

• Don’t ask a credit to lower your credit limit because it reduces the gap between your balances and your available credit. The lower the gap, the more it hurts your scores.

• Avoid making late payments. While a missed or late payment will do more damage to a good credit score than it will an already low score, you definitely want to avoid missed or late payments if you are trying to improve your score.

• If you are trying to improve your scores, applying for a new account or additional credit when you already have enough credit can ding your scores, unless you are recovering from a bankruptcy. In this case, applying for an installment loan can help.

• Don’t transfer credit card balances from a high-limit card to a lower-limit one or transfer small balances to a high limit card. It’s better to have smaller balances on a few cards than a big balance on one. Remember the debt-to-credit ratio.

Having good credit and being an educated consumer can save you money. You will get better interest rates and better terms, which saves a lot of money in the long run. Additionally, you can save money on insurance. Know what is in your credit report and know what your score is. Lenders are in business to make money. If you don’t know what’s in your credit report or what your score is, a lender can charge you more. Understanding what’s in your credit report and knowing what your score is can give you bargaining power when negotiating interest rates and terms.

For more information on your credit, how to improve it, or to see what kinds of loans you qualify for, call Pink Realty today at 719-393-7465 (Pink) and ask to speak to our lender. She will gladly help you. Once you are qualified for a loan, one of our experienced agents will help you find your perfect Colorado Springs homes!

The Top 10 Myths About your Credit!

Today’s economy has caused many people financial hardship. Whether your hardship is the result of a loss of employment, illness or injury, death of a spouse, divorce, or bankruptcy, hardships can result in derogatory information ending up on your credit report. Unfortunately, derogatory information leads to further hardship as needed credit is denied, future employment is affected and interest rates and insurance premiums go up leaving you in a ‘debtor’s prison’ that seems to have an endless sentence with no right to appeal. While solving credit report and credit repair issues may seem to be a mystery, there are myths and truths you should know and this article addresses them and think before you get Colorado Springs Foreclosures

Myth # 1: I can pay off my past-due charge-offs and collection accounts and my credit report will show ‘paid’ and will no longer be a negative strike against my credit score.

While it is difficult to fully repair your credit if you have outstanding past-due accounts, paying off old accounts that will automatically be removed shortly in the future, can harm your credit for a longer period of time. Past due accounts, collections, charge-offs and judgments can stay on your credit report for a maximum of 7 years. Bankruptcies and foreclosures can stay on your credit report for a maximum of 10 years. This length of time is determined from the last date of activity posted on your account. If you have an old collection that was placed on your credit report in 2000, it would automatically be deleted in 2007. However, if you pay off the ‘bad’ debt in full in 2005, the account will show ‘paid’, however the account is still reflected as an account that was past due, or a collection and that negative mark will now remain on your credit report until 2012. Therefore, if you have funds to pay off any delinquent accounts or collections, it makes more sense to pay off the recent derogatory accounts as the old accounts will drop off on their own within 7 years of the last posted activity.

Myth # 2: If a negative item is deleted from my credit report, it will just come right back on my report.

In truth, credit bureaus will temporarily delete a negative listing if they have not heard from the creditor within 30 days of an item being disputed. If the creditor submits verification of the account, even after 30 days, the credit bureau can re-insert the negative account back onto your credit report. However, many times the creditor fails to respond and the negative item is deleted permanently. If the creditor does verify the account and it gets put back onto your credit report, it is oftentimes deleted again because the challenge process to fully verify the account is intensified and the creditor no longer pursues the account.

Myth # 3: Items such as bankruptcies, foreclosures, judgments and tax liens are impossible to remove from a credit report.

While it can sometimes be a difficult and time-consuming process to remove these types of accounts, every type of negative listing has been removed from a credit report.

Myth # 4: Disputing a credit report is easy. Any consumer can do it themselves.

While it is easy to dispute accounts on a credit report, getting results can be difficult. Credit reporting agencies are publically traded, profit seeking entities and their time spent investigating consumer disputes cuts into their profits. Therefore, they work harder to hinder your progress to repair your credit than they do to help your progress. There are companies that tell you getting disputes resolved yourself are complex, time-consuming, and frustrating and many of these companies charge high, upfront fees and make false promises about getting all your negative information removed from your credit report. Beware of these companies and their scams. You can get more information about how to repair your credit yourself and credit repair scams that you should be aware of by going to the FTC (Federal Trade Commission) website at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm or you can simply call us at Pink Realty at 719-393-7465 (Pink) and ask to speak to our lender. She will be happy to help you get your credit score up.

Myth # 5: The credit bureau allows me to submit a 100-word explanation to tell my side of the story. Creditors read my statement and take it into consideration.

While the credit bureaus do allow you to submit an on-line explanation to dispute an account, the creditor does not necessarily take it into consideration. While credit reporting agencies are supposed to forward the information to the creditor, there is a good chance the creditor will never see your explanation! To file a dispute, send a letter to the credit reporting agency with attached copies of any documentation you have to support your dispute. Be sure to send this letter by certified mail – return receipt requested, so you can document that your information was received by the agency. Additionally, send a letter to the creditor and again, sent the letter by certified mail – return receipt requested so you can document it was received by the creditor. The consumer reporting agency must investigate your dispute within 30 days. They are required to forward your information to the creditor. The creditor must respond and if the investigation proves the information reported to the credit bureau is inaccurate, the creditor must notify the credit reporting agency and they must correct your file.

Myth # 6: The credit bureaus are a government agency and therefore infallible.

Credit reporting agencies, such as Equifax, Experian and TransUnion are publicly and privately traded companies that are in business to earn a profit for their stockholders. They are not government agencies and are very heavily regulated as a result of public abuse and mistakes. The consumer protection legislation and laws allows consumers to challenge these agencies and can force the removal of inaccurate, outdated, unverified or unverifiable information.

Myth # 7: I can create a totally new credit file by getting a Federal Tax ID number or changing a few numbers on my social security number.

There are credit repair companies out there that let you believe you can obtain a completely new credit file by doing this. Beware! This is a fraudulent scheme! It is a criminal offense to lie on a credit application. If you are caught doing this, you will suffer the consequences.

Myth # 8: If I build enough good credit, it will offset my bad credit and make me creditworthy.

Today, computers compile a point score to determine your creditworthiness. There is no longer a human element that can determine your creditworthiness by your character or current situation. Therefore, any negative credit information can hinder your ability to get future credit. However there are things you can do to help improve your score. First and most importantly, review your credit report for accuracy and dispute any inaccuracies! You are entitled to a free credit report each year. AnnualCreditReport.com is the ONLY authorized source for the free annual credit report that’s yours by law. Based on a study done by PIRG (Public Interest Research Groups), 70% of consumer credit reports contain incorrect information, so there is a good chance you may find errors on your report that can be removed. Secondly, strive to bring recent past due accounts current. Remember from Myth 1, the old accounts will be removed automatically after a maximum of 7 years from the date of last activity. Also work to reduce the balances owed on revolving credit accounts to 50% or less of your approved credit limit. Approximately 35% of your credit score is determined by past delinquencies and 30% is determined by your revolving debt ratio (balance due / credit limit). Because past due accounts and Revolving Credit Debt Ratio equal 65% of your total credit score, these are the accounts that you should address first to make the biggest impact on raising your credit score.

Myth # 9: It is illegal for creditors to remove negative accounts on my credit report. The law requires these items stay on the credit report for at least seven (7) years and in the case of bankruptcies, 10 years.

The law states that negative information can appear on your credit report for a maximum of 7 years, 10 years in the case of bankruptcies. Creditors and credit bureaus may choose to delete negative items anytime they see fit, however they cannot let them say on longer than the maximum amount of time.

Myth # 10: Nonprofit organizations like Consumer Credit Counseling Service (CCCS) can help me restore my credit.

While these agencies may be non-profit, they still charge for their services. Oftentimes, seeking help from these agencies can prove to be a red flag for creditors and your credit can be treated similarly to a Chapter 13 bankruptcy. Again, if you seed credit help, beware of the many credit repair scams that are out there. The Credit Repair Organizations Act requires credit repair organizations to give you a copy of the “Consumer Credit File Rights under State and Federal Law” before you sign a contract. They must also give you a written contract that spells out your rights and obligations. Read these documents before you sign anything!! And before signing, know that a credit repair companies cannot do the following:

• make false claims about their services

• charge you until they have completed the promised services

• perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees.

Before you sign a contract, be sure it specifies:

• the payment terms for services, including the total cost

• a detailed description of the services the company will perform

• how long it will take to achieve the result

• any guarantees the company offer

• the company’s name and business address

Today, nearly 70% of Americans are denied credit because of their credit scores. At Pink Realty we see this all the time, so we understand the credit help that’s needed. Our Colorado Springs realtor work with many people that are trying to buy homes, but just don’t qualify because of their credit score. This is why our agents work with several reputable lenders that work with these buyers at NO charge. They help you understand your credit report and your credit score. They will work with you to help you improve your score. So, before you spend your hard earned money on what might be a fraudulent scam, call us at 719-393-7465 (Pink). We can put you in touch with a lender who will work with you to get your credit where it needs to be so you can buy that home you want to buy! You can reach Pink Realty at 719-393-7465.

Posted by z4k!_xy in Colorado Springs Realtor and tagged with colorado springs foreclosures, colorado springs homes, colorado springs houses, homes colorado springs, homes for sale colorado springs, house for sale colorado springs, mls colorado springs, real estate colorado springs, realtor colorado springs, relocation to colorado springs

What You Need To Know Before You Buy!

Everyone wants to be a homeowner and live the American Dream and today’s real estate market provides some pretty good perks for those looking to buy a home in Colorado Springs. However, before you buy, there are some things to consider. Purchasing a home is the most important decision you will make in your lifetime. Therefore, it makes sense to understand what’s important to know before you buy.

As property values have been falling, it’s a great time for home buyers to find good deals on Colorado Springs homes that are for sale whether you are looking for that perfect retail home or want to save a little more money by purchasing a short sale or REO property. While now is the time to take advantage of great pricing, you need to ask yourself if you are ready and willing to make a commitment to stay in the house for a few years. When people buy a home, they anticipate growing equity in their home over time. There was a time, not too long ago, where this happened pretty quickly, however, in today’s market, it takes longer. When you add in the transaction costs involved in buying and selling a home, you could find yourself losing money on your home if you try to sell too quickly. So, first things first – can you can make the commitment to stay in the home for a few years?

Some other questions you should answer before you and your Pink Realty agent go out to find your dream home:

• When do you want buy? Depending on the time of year you begin house hunting, the market may be slower. For instance, if you are buying in the colder seasons (i.e., through the holidays), sellers may be more willing to offer incentives or be more flexible on price.

• If you aren’t in a hurry to buy, you might want to consider buying a home that is being sold as a short sale. The short sale process does take longer than a typical retail sale, but if you have the time to work through the process, you will have the opportunity to get more house for your dollar if you buy a short sale.

• What part of town and what neighborhoods do you want to live in? Colorado Springs neighborhoods that have better schools tend to have higher values. Even if you don’t have school-aged children, it’s an important aspect to consider when it does come time to sell because resale values will be higher.
• Be sure the neighborhood you choose is one you can commit to staying in for a while, so do some research on different Colorado Springs neighborhoods to find out about property values and if houses are selling close to their asking prices. Find out about the attributes that are important to you such as schools, shopping, recreation, homeowners associations and dues, crime rates, etc. Remember that your Pink Realty agent can help you find any of this information that is of interest to you. Just call us at 719-393-7465 (Pink) to get started.

• How many houses in the neighborhood are for sale and how fast are they selling? Talk to neighbors to see how they like the neighborhood. If they are selling, ask why they are selling. Again, consider your lifestyle and make sure the neighborhood will work for you.

Another very important aspect of buying a house is financing. The average person needs to obtain a mortgage in order to purchase a home, and getting a mortgage these days isn’t as easy as it used to be! The human element of issuing credit has been removed from credit transactions, so the approval or denial of a mortgage is determined by your credit score. Your credit score is determined by the information that is in your credit report. Therefore, you need to know what’s in your credit report and what your credit score is. Knowing this information helps in several ways. If your credit score falls short of the approval requirements, you will have an idea of what you’ll need to do to raise your score. Again, if you need help with this, just call Pink Realty at 719-393-7465 (Pink) and ask to speak to our loan specialist and she will be happy to help you with any loan or credit issues or questions you may have. If you have great credit and a high score, you will have some negotiating power when it comes time to determine interest rates and points. You are entitled to free copies of your credit report annually from all three credit bureau reporting agencies (Equifax, Experian and TransUnion). Actually obtaining your credit score generally costs a fee, however, you can have a lender pull your credit report and tell you your credit score for free. Most conventional lenders ideally look for a credit score of 720 or higher. In today’s economy, there aren’t many people with scores that high. If you don’t qualify for a conventional loan, you can apply for an FHA or VA loan. While FHA has their own credit score requirement of 580 or higher, many lenders add their own requirements to FHA financing.

If you find your credit score doesn’t qualify you for a mortgage, you will need to do some homework to get your scores up. We have posted previous articles on credit reports and repairing your credit. You can review these articles to learn about how you can repair your credit or just call the Pink Realty office at 719-393-7465 (Pink) and ask to speak to our lender. She can definitely help.

If your credit is strong enough to qualify you for a mortgage, the next thing to figure out is how much of a mortgage can you realistically afford. An industry rule of thumb says you can afford a mortgage that is 2-1/2 times your annual salary, but this rule of thumb doesn’t take into consideration your monthly debt and living expenses. To better determine what you can afford, you can use an online mortgage calculator. These calculators take into consideration your income and your monthly debt payments to give you a more realistic mortgage amount for your budget.

Once you know the amount of the mortgage you can afford, the next thing to determine is how much cash you have available for a down payment. Most conventional loans require 20% of the purchase price as a down payment to avoid private mortgage insurance. If you don’t have 20%, you can put as little as 5% down if you agree to have private mortgage insurance added to your loan. If you qualify for FHA financing, you may only have to put down 3-1/2% of the purchase price. Depending on how much cash you have to put down will also determine how much of a mortgage you can afford. As you can see, it’s important to know if you can obtain a mortgage, how much of a mortgage you can afford and how much you can afford for a down payment. Knowing the answers will help you determine what price range you and your Pink Realty agent need to be looking in for your new home.

If you are confident you will qualify for a mortgage, it’s time to have contact your Pink Realty agent and start looking for your dream home. You want to pick a lender and a real estate agent who will work for you and take your interests to heart.

Once you have been approved for your mortgage, you don’t want to do anything to change your credit report or your financial situation. Therefore, avoid doing any of the following:

• Don’t apply for new credit. Inquiries affect your score and will have to be explained to your lender.

• Don’t incur more debt. This means don’t increase your credit card balances or credit lines and don’t take out any new loans. It will affect negatively affect your debt to asset ratio.

• Keep accounts current and make payments on time.

• Don’t pay off collections or charge off accounts, don’t close any credit card accounts and don’t consolidate debt into one or two credit cards.

• Don’t make any large deposits other than your standard payroll as all deposits will have to be explained.

• Don’t make any large cash purchases as it will lower the amount of verified funds in your bank accounts.

• Don’t change jobs without talking with your loan officer first.

OK, now that you know your credit is good, you know how much cash you have to put down, you are working with a Pink Realty agent and you know what neighborhoods you are interested in living in. Congratulations! You have just crossed the first big hurdle.

Now it’s time to start looking for the house that’s right for you. While you can comb the internet and newspaper ads to find houses yourself, it can easily become overwhelming with the large inventory of homes that are on the market. To save you time and miles of legwork, your Pink Realty agent will do all of this work for you. They can narrow houses down based on your interests and your budget and when it comes time to making an offer, signing contracts, disclosures, and addendums, they are there to help you understand what it all means.

Here are some tips that will make things easier as you and your Pink Realty agent look for your Colorado Springs dream home.

• Make a list of things the house must have and a list of what you would like to have. Prioritize your list and separate the ‘have-to-have’ from the ‘want-to-have’. Don’t be too restrictive on your search criteria. For instance, include a price range that is 10% above and 10% below your budget.

• Bring a notebook and camera with you to help you remember the details of each house. Take pictures and take notes about each because after you have seen several, you can easily forget details or get the details and houses mixed up!

• With each house you see, keep an open mind. Don’t reject a house just because it was short a few features on your wish list or was a bit out of your price range. Remember, the asking price is simply a starting point. You will have an opportunity to negotiate once you are ready to make an offer.

Once you have found the home you want, work with your Pink Realty agent to determine what your offer should be. Depending on the market and the area, you may have to act quickly. Your agent should have a good idea about what homes in that neighborhood are selling for and to know how close your original offer should be to the asking price. Additionally, you should discuss what terms you would like in the contract such as how quickly you want to close, what stays with the house, how much earnest money you have to put down, and so on.

When you have settled on a home and are in the process of negotiating a final price, you will have the contract contingent up the results of a home inspection. Have a licensed inspector inspect the home to see if there are any major repair surprises. Home inspects can check the heating, plumbing, electric, roof, etc. to see if there might be some foreseeable issues in the future. You may want to ask for a home warranty as well. There are all things your Pink Realty can help you will.

Buying a beautiful Colorado Springs homes is no easy task, but it is a very rewarding experience when you know what to expect and you are working with the professionals at Pink Realty who have your best interests at heart. We have experienced buyer’s agents who will work with you to find the home of your dreams. You can also use our professional in-house lender that will get you an affordable mortgage and help you with credit repair if you need help with that. Whether it’s a retail property or a short sale, they are professionals, knowledgeable and experienced. Additionally, we have an outstanding short sale team that not only has a very high success rate but also takes great pride in getting the deals closed in a timely manner. We are the ones to call!

Posted by z4k!_xy in Colorado Springs homes and tagged with colorado springs foreclosures, colorado springs homes, colorado springs houses, homes colorado springs, homes for sale colorado springs, house for sale colorado springs, mls colorado springs, real estate colorado springs, realtor colorado springs, relocation to colorado springs

Colorado Springs Foreclosures

When it comes to purchasing homes, buying a foreclosure is one of the best ways to create equity. Many times, you will find foreclosed houses for sale listed as half of what they are actually worth. After purchasing one of these homes, you can rent them out to generate positive cash flow, or flip and sell to generate an immediate profit. Yes, foreclosures can be a great way to create equity (or just get a create deal on a home), but many of us do not know a lot about foreclosures. Let’s take a look at what foreclosures are and how you can go about finding a great deals of Colorado Springs Foreclosures.

Before we talk about how you can find a foreclosed house, let’s first discuss what a foreclosure actually is. A foreclosure occurs when an owner cannot make payments on their home. If payments become severely overdue, the property is seized and sold. Many times, when foreclosures are resold, they are resold much below their actual value, making them the perfect find for home buyers.

Typically, there are four stages to a foreclosure. If a home owner goes 60 days without making a loan payment, they will enter into the first stage of foreclosure known as the ‘notice to accelerate’. During this stage, the owner will receive a notice from their lender letting them know that their payments are past due and must be brought up to date. If the owner fails to respond to this notice they will enter into the second stage of foreclosure – the ‘demand letter’. This letter will be delivered to the owner by a lawyer, letting the owner know that the foreclosure process will begin if they do not soon bring their payments up to date.

If the owner still does not respond, the lender will receive a notice of default, letting them know that the lender has filed for a formal foreclosure from the court. Once again, the owner is given an additional 20 to 30 days respond. If there is still no response after the given time, a final notice of sale will be delivered, letting the owner know when they must move out and when the house will be auctioned off.

If you are looking for a great deal in the Colorado Springs area, you may want to consider looking at these foreclosed houses. Begin by asking your real estate agent about foreclosures in the area. If there are any available, your agent will take you around to look at each. It is generally recommended that, before you look at homes, you ensure that you have a secure financial backing. Foreclosed houses are hot sellers, so if you are interested in a home, there is no time to waste.

Once you find a home you are interested in, you can submit your bid. Generally, the lender who repossessed the home will create a starting bid of which you cannot bid lower. Once you have made your bid, it will be considered against other bidders. You will be noticed once a decision has been made.

If you win the bid for your home in Colorado Springs, your next move is to perform an inspection. Do not skip this step. While some foreclosed homes are in excellent condition, many need repairs. And when it comes to buying a home, it is best to know what to expect beforehand!

If you are looking for homes for sale in Colorado springs area, you may want to start by looking at foreclosures. Foreclosures can get you a great deal on your home and can also be a great way to earn equity. Speak to your realtor about foreclosed houses and see what homes are available in the Colorado Springs area.

Posted by z4k!_xy in Colorado Springs foreclosures and tagged with colorado springs foreclosures, colorado springs homes, colorado springs houses, homes colorado springs, homes for sale colorado springs, house for sale colorado springs, mls colorado springs, real estate colorado springs, realtor colorado springs, relocation to colorado springs

Relocation to Colorado Springs

Are you looking to relocate to Colorado Springs? Sometimes, relocation to a new city can be scary. New neighbors, new streets, and new surroundings can be a little intimidating if you don’t know the area. Let’s take a brief look at what you can expect when you relocate to Colorado Springs so that you can more easily adapt to your move.

When you move to Colorado Springs, the one thing you can count on is beautiful surroundings. Colorado Springs is located right at the base of Pikes Peak, the highest peak of the Rocky Mountains. Each year, this city attracts millions of visitors looking to experience a small part of the beauty that it has to offer. Within the Colorado Springs area, you will find a variety of parks for nature lovers including the Garden of the Gods, the Native American tribal grounds, and Seven Falls. Wherever you go in this city you will be surrounded by sky high mountains, unique rock formations, and natural beauty.

If the gorgeous scenery is not enough to help you adapt to your relocation in Colorado Springs, perhaps the weather will be. Because Colorado Springs is surrounded by the Rocky Mountains, the climate here is quite mild and dry. In the summer, average temperatures range between 70 and 80 degrees, making it the perfect weather to catch a tan. In the winter, temperatures are mild reaching an average of around 28 degrees.

When it comes to relocating to Colorado Springs you will find that most of the economy is based around military installations, aerospace, and tourism. To give you an idea of how strong the military influence is, one fifth of all people in the city of Colorado Springs are employed by the military! Aside from the military, however, Colorado Springs also places a great deal of emphasis on space research. The Combined Services Space Center and the Consolidated Space Operations Center are both located in Colorado Springs, making it the perfect location for those interested in aerospace. As for tourism, Colorado Springs is booming. On average, the city drives over one billion dollars each year in tourism alone, one of the main attractions being Pikes Peak.

If you are looking to raise a family in Colorado Springs, you have plenty of educational opportunities to choose from. Colorado Springs offers access to over 39 different elementary schools, 9 middle schools, 9 high schools, and 6 alternative learning schools. Colorado Springs also has a lot to offer in terms of post-secondary education. With over 20 different colleges and universities in the surrounding area, Colorado Springs is home to Colorado College, the University of Colorado, and the United States Air Force Academy.

Relocation to a new city can be scary, but be assured that relocation to Colorado Springs, you will adapt quickly. Surrounded by beautiful scenery, a booming economy, and excellent educational opportunities, it does not take one long to adapt to life in Colorado Springs!

Posted by z4k!_xy in relocation to colorado springs and tagged with colorado springs foreclosures, colorado springs homes, colorado springs houses, homes colorado springs, homes for sale colorado springs, house for sale colorado springs, mls colorado springs, real estate colorado springs, realtor colorado springs, relocation to colorado springs

Realtor Colorado Springs

So you have decided that you want to purchase a home for sale in Colorado Springs? The next step is to hire a realtor! A Colorado Springs real estate agent can help you through the process of finding and purchasing a home. Let’s take a look at how a real estate agent can help you in your quest to find a new home.

When you first speak to a real estate agent in the Colorado Springs area, one of the first things that you will do is discuss your wants and your needs. Once the real estate agent knows what you are looking for, they can begin searching through the Colorado Springs MLS listings, finding homes that match your needs. Real estate agents can help to limit your house search based on housing type, housing price, location, and a number of different amenities such as number of bedrooms and bathrooms. A real estate agent can help you to pick through the long list of homes for sale, showing you only the houses that match your exact needs. Need a pool? Your real estate agent will find you houses with pools. Need air conditioning? Your real estate agent can find that too!

Not only can a Colorado Springs real estate agent help you to find your perfect home, but they can also help to choose the perfect location for you and your family. One of the things that make Colorado real estate agents so good at what they do is the fact that they are very familiar with the different neighborhoods. They can tell you any information that you need to know about schools in the area, crime statistics, demographic statistics, or anything else you wish to know. If you are new to the Colorado Springs area, this knowledge can be very beneficial to your decision!

One of the most important jobs that a Colorado Springs real estate agent has does not come while you are searching for a house, but rather while you are purchasing a house. Real estate agents are responsible for any communication between the buyer and the seller. The best part? Real estate agents have excellent negotiation skills, helping you to negotiate a price that works for both you and the seller.

Once you have reached your agreement with the seller, a real estate agent will handle all of the paperwork for you. When it comes to purchasing a home, there can be a great deal of paperwork that needs to be read and signed. Most of these papers, however, are written in a real estate code that is difficult for the average person to understand. A real estate agent can help guide you through the paperwork process, explaining any contracts that you may sign and answering any questions that you may have.

If you are looking to purchase a home for sale in Colorado Springs area, your first step is to hire a real estate agent. Colorado realtors can help you find the perfect home and then guide you through the process of purchasing it!

Posted by z4k!_xy in Homes for Sale in Colorado Springs and tagged with colorado springs foreclosures, colorado springs homes, colorado springs houses, homes colorado springs, homes for sale colorado springs, house for sale colorado springs, mls colorado springs, real estate colorado springs, realtor colorado springs, relocation to colorado springs

Colorado Springs Foreclosures Make a Great Investment

Homeowners whose homes have been put up for foreclosure are unfortunate but investors are somewhat lucky to find these deals on the market. Even with a “run-down” property, an investor can flip it and make a decent amount of money on its resale. The process of colorado springs foreclosures is somewhat simpler than other areas of the country as there is no need for a court appearance by neither the lender nor the borrower.

How does a foreclosure work?

When a borrower has defaulted on a loan, the lending institution issues a notice to the borrower and trustee. The lender requires a 3-moth reinstatement period to give the borrower the chance to pay the debt. When this time period elapses, a trustee’s sale is publicized, typically in the form of an auction. All costs related to the foreclosure and the principal amount is deducted from the winning bid. The balance is then given to the borrower.

Why foreclosures are good news for investors

A foreclosure is a good opportunity for an investor to snag real estate. This is especially true about Colorado Springs foreclosures. Though the market has experienced a dip in prices, the housing values in Colorado Springs are at a steady rise ranging from 2% to 6%. In addition, defaulted banks are willing to sell foreclosures at lower than normal prices in order to recoup what they have lost. They aren’t interested in real estate, they are more interested with lending money to new buyers.

There is actually an even better situation for investors as it relates to foreclosures. There is the instance when a property is sold in pre-foreclosure which means less cost and time. The buyer has more power to negotiate as the seller is willing to forego equity on the property to evade the tarnish to their credit report.

What are the steps that a buyer should take?

As a buyer, you should do a lot of research to find the right property. If you are planning on using the property as a primary residence, then factors such as the school district, the crime rate, local amenities, long-term plans for the area and comparable properties in the area should all be considered. When a property is decided upon, the next step is to approach a bank to get pre-qualified for a loan.

During this time, it’s recommended that you avoid making huge purchases. Lenders use your debt-to-income ration to establish what you can afford. It will include monthly housing costs, car payments, credit cards, student loans, etc. Additional debt will negatively impact the amount the lender will finance.

The next step is to either contact the seller or go to the auction to submit an offer. The ideal price will take into account the fact that banks hardly want less than 90% of the loan balance. Also, you should get the property professionally inspected. It makes no sense getting a “money pit” that has a lot of shortcomings which will end up costing a lot of money to fix. Keep this in mind when negotiating a price.

Things to Know When Considering Relocation to Colorado Springs

Colorado Springs is an amazing place to live so if you’ve decided to live there then congratulations. However, that doesn’t make the moving process any easier. Here then are some tips to help make your relocation to Colorado Springs a lot smoother and the transition process faster.

Use the Internet

The internet is an amazing tool that you can use to make your life a lot simpler. You can conduct searches online whether you plan on renting or purchasing a home. There are a lot of real estate websites where you can do MLS searches. You can even do virtual tours to really get the idea of where you’ll be moving to. No longer are the days when you would have to drive around in search of the ideal place to live as you can do a complete search online or at least narrow down the search.

Altitude

Colorado Springs has an altitude of 6035 feet. Sure the air is purer but for some it’s hard to breathe. For this reason, I would suggest hiring a moving company to help you unpack. Altitude sickness is a problem for some people who aren’t used to this kind of altitude. Add to that the stress of moving and you may end up gasping for air. Drink lots of water and take it easy and you should be fine. In addition, keep an eye on your pets as this change in altitude could affect them as well. Altitude even has an affect on the cooking process. So, you will have to make water boil longer and keep things in the oven longer too.

Pets

Moving is not only stressful on you but your pets too. They may get discombobulated for a couple of days as they are in a new environment. It is your responsibility to watch them carefully and make sure they are kept inside or find a way to keep them from running away. They are most likely to do this as they are getting used to the new situation. Not to mention that the wild life in Colorado Springs such as foxes, mountain lions, large birds and bears would love to spot your pet alone. On the lighter side of things, Colorado Springs is not only a top rated place to live for humans but for pets as well. It was rated the number 1 Pet Friendly City in the country. You’ll find there are many parks and trails for your pet’s exercise needs and lots of vets as well for their health needs.

There Are Others Like You

A lot of people living in Colorado Springs are “newbies”. Whether it’s because they moved there because of the positive ratings or they are expatriates working for some of the large companies situated there or because they have been assigned at one of the military posts there, a lot of them aren’t natives. This is a great way to meet people and acquire friends. And yes, relocation to Colorado Springs is full of “friendlies”.

Putting Confidence Back in Colorado Springs Homes

Many Colorado Springs house hunters have lost confidence in the housing market due to some news released in the media. Here are some of the misconceptions out there which after this, hopefully will be dismissed.

Misconception number 1: Home loans are impossible to get right now

Traditional loans are available from as low as 5% and less. Another option is an FHA loan and they only require a 3.5% deposit. If you have not owned a home for 3 years, you even qualify for a first time home buyer loan. El Paso County has a 14 million dollar bond for you that you can get with a 3.9% fixed rate and down payment aid that you won’t have to repay. Colorado Housing and Finance Authority (CHAFA) also has funds that carry a small interest rate and down payment. There are other ways to receive assistance to purchase a house both on the local and national level.

The misunderstanding comes from the fact that the way in which persons qualify for loans has changed. For example, currently, you have to be able to prove appropriate income and a good credit score to get a mortgage loan. All that means is that the days with little or no documentation for loan approval are over. This is a good thing as this is one factor that led to the amount of foreclosures now being experienced. In addition, if you have a real estate broker that’s a good negotiator, you may be able to include your closing costs in the final agreement further reducing your home-buying expenses.

Misconception number 2: Rates aren’t increasing now so there’s no rush

Let’s look at an example. The typical 30 year fixed mortgage rate for the year 2003-2007 was 5.75%. Therefore, if you had a $200,000 mortgage, the monthly payments would work out to $1,167. Today, the same 30 year mortgage is between 4% to 4.25%. That same $200,000 mortgage at 4.25% would work out to $983. Imagine if you sold the $222,000 house and purchased a $300,000 house. The payments would move from the 5.75% rate to the recent 4.25% rate so that equates to a difference of $144 per month in payments for $80,000 more of house.

Misconception number 3: You’re better off waiting until there’s an improvement in the market

History always repeats itself. It’s not the first time that prices have fell. Markets are cyclical and knowing this we know that once again, prices will go up. If you do not currently own a Colorado Springs house, or are considering an upgrade to what you currently have, then this is the perfect opportunity for you to buy. If you are even only thinking about investing, it makes sense to buy when prices are low as well as interest rates and there is a lot of inventory.

Prices are beginning to stabilize and the economy is in the process of improvement. As a result, prices may increase soon in order to keep inflation steady so it is the best time to buy. Not to mention that banks want to get rid of their foreclosures and are reducing prices.

Renting Homes in Colorado Springs – Advice for Renters

Colorado Springs is one of the best places to live in the country for a variety of reasons. So, it’s no wonder you have decided to be one of the many people who move there each year. If you have decided against purchasing one of the beautiful Colorado Springs homes for fear of the real estate market then you are not alone. Even though Colorado Springs has done much better than some other areas of the country, it still leaves a lot to be worried about. Especially if you may not end up living there long enough to reap the rewards of future appreciation in home values. In that case, renting is an option that offers the freedom of not being tied down to a mortgage.

Colorado Springs has homes to suit a range of tastes. There are apartments, single family homes, condominiums, town houses and even farms. In any case, you should know what to expect from a legal stand point when going through a rental agreement.

A Colorado home rental agreement is pretty much standard. However, as the tenant, you have to ensure that there are particular areas adequately covered in the rental agreement. Issues such as term of lease, rental amount as well as the mode and schedule of payment, responsibilities as it relates to the payments of utility, repair responsibilities and maintenance costs, pets, contractual responsibilities of tenant and landlord and the subtenant policy.

Keen attention should be made to the section of the agreement detailing the security deposit. Colorado state law does not specify a lower or upper limit so keep this in mind in order not to get scammed. Additionally, the deposit can be used by the landlord specifically for cleaning and repairs resulting from damages made by the inhabitants, separate and apart from regular wear and tear. The law stipulates that the landlord has to return a portion or the whole deposit within a thirty day period following the end of the lease agreement. If you have any questions relating to any areas of the contract, do not hesitate to seek advice from a local real estate lawyer.

One area of the Colorado rental law that is very specific is the matter regarding peaceful property enjoyment. It states that the landlord is prohibited from entering the property without given permission from the tenant while the lease is still in effect. The two exceptions are if the landlord has emergency repairs to be made or if the landlord is put in the position where he/she has to demand rent.

Another key area to note is the eviction law. Eviction is only possible for three reasons including termination of the lease agreement, nonpayment of rent and breach of contract on the part of the tenant. The landlord is obligated to get a court order for eviction without which, he is not able to coerce the tenant to leave. The landlord is also legally required to give the tenant written notice advising them about the filing of the eviction case. The notice enables both parties the opportunity to resolve any issues or for the tenant to make preparations for leaving.

Understanding Colorado Springs homes rental law is crucial if you want to avoid scams and make the most out of your tenancy. It’s in your best interest to do some research before and after signing a lease.

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