real estate colorado springs Posts

Realtor Colorado Springs – The One that Can Help You

If you are relocating to Colorado Springs, or you are selling or buying a home there, then you can always benefit from the services of a realtor Colorado Springs.  A realtor will be able to assist you in finding the home most suited to your needs.  Their familiarity with the neighborhoods and property values puts them in the ideal position to assist you in finding the perfect home.

Once you know what type of home you would like to purchase, or rent, then it is important to seek out a reputable realtor.  It is always advisable to select an experienced realtor Colorado Springs.   You want to ensure that the realtor has been in business for a number of years, and has managed to close transactions on a regular basis.  There are many real estate offices and brokerages in Colorado Springs, so you should be able to locate one easily.

Purchasing a home can be a very difficult process; because of this, it is necessary to secure the services of competent real estate professionals, who are able to navigate you through the process. Be very clear in outlining to the realtor your ‘must haves’ those are the things you are not willing to compromise on, whether in relation to the purchase or sale of a home.

A realtor Colorado Springs has intimate knowledge of the neighborhoods.  This means they can direct you to an area that has the amenities you need.  Such things as recreational spaces, shopping areas, school districts, and business opportunities, are all important factors that can impact where you buy your home.   As a result, it makes sense to choose a realtor that is very knowledgeable about the city, as well as the surrounding communities.

The realtor will be able to access the available listings in the particular part of town that you have indicated a preference.  Armed with this information, you are able to quickly identify the available properties and prices.  Because the realtor Colorado Springs often gets information on houses as soon as they become available, you may be able to view homes as soon as they go on the market.  This can be a big help, as you can get first choice in finding the home that is just right for you.

The realtor should also have the expertise to assist with the legal issues relating to the sale or purchase. They should be familiar with all the legal aspects of the sale, including the paperwork involved.  This will ensure that they are able to properly to explain the different aspects of the transaction to you.  This is very important as the sale or purchase of a home is often a very overwhelming prospect for many individuals. However, with the necessary support to guide you through such issues as inspections, mortgage negotiations, and Title Insurance, the process can be made a lot easier.

If you are looking to purchase or sell a home in Colorado Springs, then be sure to contact a realtor Colorado Springs.  With their help the entire process can be smoother, shorter, and stress free.

 

 

Know The Real estate In Colorado Springs

If you have decided to purchase real estate Colorado Springs, then congratulations, you have made a very wise choice.  Colorado Springs is a wonderful place to live.  It has pleasant weather all year round, (not too hot and not too cold), growing businesses, scenic views, modern amenities, and very good school districts.

Perhaps one of the most important decisions you can make when buying property, is to retain the services of a reputable real estate agent.  They can take all the hassle out of buying a home.  They carefully examine the features you are looking for in a home, in order to obtain a comprehensive listing of homes from the MLS Colorado Springs.  Based on this report you can get a very good idea of the types of homes that are available in your budget.

Colorado Springs has homes to suit just about every budget, so you don’t have to worry about finding your ideal home. It depends on what you are looking for.  You can get homes from as low as $100,000 and others for as much as $6 mil; it all depends on your preference.

If you only have a very small amount for the down payment on a home, then you can take advantage of some deals on foreclosures.  There are foreclosures in some nice areas like Briargate and Broadmoor.    It is possible to get some foreclosures for as little as $1,000 down. Be sure to do a thorough research of what is available, or ask your real estate agent to do it for you.

If you prefer to move into a new home, then you can find a good variety of new homes in Colorado Springs. There are growing areas such as Northgate, where you can choose from a wide selection of newer homes. Northgate includes areas such as Trail Ridge, Falcons Nest, Northgate Highlands, and Stone Crossing.  Home options include modest starter homes as well as semi-custom style homes.  The price of homes in this region ranges from $200,000 to $480,000.

Southeast Colorado Springs is home to a growing community known as Soaring Eagles.  This development was completed in 2005 and has some well-built modest homes, some of which are 3500 sq. ft. in size. There are also some smaller homes which are 1200 sq. ft.  The homes are very reasonably priced.  In fact most are priced for less than $250,000.

Older style Victorian homes are also available in the older parts of the city.  Many of these homes can be found in the Old Colorado city area.  Prices for these older style homes often range from $150,000 to $420,000.

If you are looking to buy real estate Colorado Springs you won’t be disappointed as there is so much to choose from.  However, be sure you know exactly what you are looking for, and make sure to get a real estate agent to guide you.  Whether you an existing home buyer or a new one you can benefit from their expertise.

Colorado Springs Homes

Colorado Springs has a lot going for it, great climate, wonderful scenes, growing businesses, and nice homes.  If you are considering relocating there and need to buy or rent a home, then you will be pleased at the variety of homes that there are available.  This will give you the opportunity to get the one that is most suited to your needs, in the area you desire.  Whether you want a townhome, residential home, a multi-family home, a luxury home, or a new home, you are sure to find it among the Colorado Springs homes listed.

For those persons who prefer a bit more privacy, and would like to live in an area that is semi-secluded, a home in Southwest Colorado Springs might be a good option.  The Southwest boasts some very large lots, in the midst of nice wooded areas.  There are some lovely amenities and school districts here as well.  The houses here are very diverse in terms of price.  There are larger 6 and 7 bedroom homes that sell for over 3mil, as well as smaller 2 and 3 bedroom homes that sell for under $250,000.  It really depends on what you prefer.  Some of the more notable southwest neighborhoods include Skyway, Broadmoor, Stratton Pines, and Stratmoor.

If you are looking for mountainous views and even more privacy, then you can consider a home in Ute Pass.  Ute Pass is located between El Paso and Teller counties, and offers very scenic views.  If you are attracted by the nature view, and don’t want to be in the hustle and bustle of the city, then you will love this setting. The houses in this area are moderately priced, many are under $200,000.   Having a home tucked away in the mountains is not only refreshing, but it is also a good investment.

If you prefer to be near the city center, then there are homes in downtown Colorado Springs that would appeal to you.  Of course being at the center of town you can expect great dining, recreational areas, school districts, shopping, and much more.  Colorado College is also located here.  The homes in this part of the city include small Spanish style bungalows, as well as condos, duplexes, and apartments.  These are available for purchase as well as for rent. If you are looking to buy a home in downtown Colorado Springs you will have to be a bit patient, as there are usually less homes up for sale, in comparison to those available for rental.

Despite the national downturn in the last few years, the market for Colorado Springs homes is quite resilient. Most regions report very good sales although buying a home is somewhat easier these days than selling one.  Seeking the assistance of a real estate broker is a good way to go if you are selling your home, as you want to ensure that you get top dollar.  Foreclosures are on the decline as well, so that is a good sign for the continued stability of the housing market in Colorado Springs.

Colorado Springs Foreclosures You Must Know

Colorado Springs is the most populous city in the county of El Paso, Colorado, so understandably the city initially faced a relatively high percentage of foreclosures at the outset of the mortgage crisis.  However, in 2011 the rate of foreclosures continued to decline in line with the national trend.  In the month of September 2011, one in every 447 housing units in Colorado Springs received a foreclosure filing.

If you need a deal on a home, then a foreclosed property might well be a good option.  Foreclosed homes are discounted, and therefore they are sold at a much lower price than the market value.  Some houses are discounted by as much as 50%.  Whether you are a homebuyer or an investor, a foreclosed property provides an excellent opportunity to own property in this very desirable area of Colorado.

Foreclosures are a great option for persons that have very little money for down payment on a house. Foreclosed properties usually require a much smaller down payment.  In Colorado Springs, there is an assistance program for persons with little money for a down payment.  This allows persons to make a minimum of $1000 down; in addition grants are available to assist persons who need them.

Also, persons looking to buy Colorado Springs foreclosures can benefit from the US Department of Housing and Urban Development, (HUD) $100 down program, which was recently brought back.   Under this program, individuals can buy a Colorado Springs HUD Foreclosure for only $100 down.

However, it is important to be aware before putting a bid on a foreclosed home.  You want to make sure that you are getting a good deal, so it is wise to seek representation from an experienced real estate agent.  Ensure that the agent you select has the necessary understanding of Colorado Springs foreclosures, and will therefore be able to skillfully negotiate on your behalf.

Colorado Springs foreclosures may include Bank owned homes, HUD foreclosures, and VA repos.  The types and styles of foreclosed homes are very diverse, and are available in several neighborhoods including downtown Colorado Springs, Briargate, and Broadmoor.

You can view listings of Colorado Springs foreclosures online at dedicated sites, or on sites that show foreclosures nationwide. When you view the listings you will get a good idea of what the market for these properties is like.  Many of the sites allow you a free trial period before you have to sign up as a member. You can make the most of that free time, by viewing as much as you can, after that you may sign up if you wish.  However, it is never a good idea to dive into the foreclosure market without the help of the experts, so consult with an experienced real estate agent before making a bid.

For those facing foreclosure, it is never a good place to be.  It can prove very difficult in the future when you have to approach another lender for a mortgage.  Having a foreclosed home on your record will also lower your credit score.

Learn the Top 10 Questions that VA home buyers ask Pink Realty Agents

With Colorado Springs houses County, Colorado being home to Fort Carson, Peterson Air Force Base, Schriever Air Force Base, Cheyenne Mountain, the Colorado Springs Air Force Academy, and countless military contractors who heavily recruit retired military personnel, VA Mortgage Loans are not only a common loan type, but local market driver. Because of the demand for these types of mortgages in Colorado Springs, we at Pink Realty want to answer the Top 10 questions that military and retired military home buyers have about VA mortgages.

Question 1: What is the VA Mortgage Lending Limit?

According to our in-house lending specialist, Tammy, the VA mortgage lending limit is $417,000 in Colorado Springs. While this limit is set for most areas of the country, the VA lending limit can be as high as $1M for other parts of the country that have higher average home prices, such as Washington DC, California and Hawaii. Additionally, while the VA sets their limit, this does NOT limit the veteran to a house priced at $417K or less. For example, let’s say you want to purchase a home priced at $500K. That’s $83K higher than the VA guarantee limit of $417K. If your VA eligibility is $417K and you qualify for the higher loan amount from your lender, you can purchase the $500K home with a down payment of 25% of the $83K difference ($20,750) and your lender will lend you the other 75% of the difference or $62,250. Therefore, your loan amount would be $417K, plus $62,250 or $479,250.00. As long as you qualify for the higher loan amount and have the cash for the down payment, you can buy that $500K house.

Question 2: What is the VA Funding Fee?

The VA charges a VA Funding fee of 2.15% of the mortgage amount to first-time users who do not put pay a down payment on the home. This fee covers the cost to operate the VA loan program. After the first VA loan, the funding fee is increased to 3.3% of the mortgage amount if the veteran does not pay a down payment. This fee does not have to be paid by the veteran out of pocket. It can be financed into the loan along with other closing costs, so there is no down payment required and no out of pocket expenses to the veteran.

Question 3: Can the VA Funding Fee be waived?

Did you know if you are discharged from service with at least a 10% disabled status you can get the VA funding fee waived? That’s right! Nearly 70% of the veterans today are discharged with at least a 10% disabled status. This not only gets the veteran a tax free check every month, but also allows them to purchase a home without having to pay the standard VA funding fee!

Question 4: Is my eligibility lost if I file Bankruptcy?

Filing Bankruptcy does affect your VA eligibility, but depending on what type of Bankruptcy you file, your VA eligibility is affected differently. If the veteran files Chapter 7 Bankruptcy, which is a total liquidation of their debts, the veteran must wait 2 years before they can qualify for another VA loan. If, however, the applicant files Chapter 13, which is a re-organization of their debts, the VA will consider lending to the applicant for another home purchase in as little as 12 months into the bankruptcy if the applicant receives permission from the bankruptcy court and can show they have paid 12 months of payments on the bankruptcy in a timely manner.

Question 5: Is my eligibility lost if I lose my house in foreclosure or sell my home as a short sale?

There have been a lot of foreclosures in Colorado Springs in the past couple so Pink Realty agents get this question quite a bit. Whether a veteran looses their home in a foreclosure or sells their home as a short sale, if the VA suffers a loss, they do not forgive or forget the loss. However, this does not mean the veteran loses their eligibility. The amount the VA loses on your home, whether via a foreclosure or short sale, gets subtracted from your total eligibility. What this means is if you were elegible for a VA guarantee of $200K and the VA lost $100K on your loan, your VA eligibility is reduced by the amount of the loss and is now $100K. If the deficiency is repaid to the VA, the veteran’s eligibility is fully restored.

Question 6: Can I use my VA eligibility more than once?

Yes! Veterans can use their VA eligibility as many times as they want but only on one house at a time. To use the eligibility again, the veteran must pay off the previous loan and provide proof to the VA, and your Pink Realty agent can help you with this. When a veteran has a VA loan on their home and they sell it, they must notify the VA that the home has sold and the mortgage has been paid in full. This restores the veteran’s VA eligibility so that it can be used again to buy their next home. If the veteran allows his VA mortgage to be assumed by another eligible veteran (and this is never a good idea) and the assuming veteran is not willing to substitute his own VA eligibility to the original veteran, the original veteran’s eligibility is reduced by the amount of the loan that was assumed. Once the assuming veteran pays the loan in full, the original veteran’s VA eligibility is restored.

Question 7: What kind of properties can I buy?

The VA does not lend on any property that is not intended to be used as the applicant’s primary residence. Should an applicant want to purchase a duplex, tri-plex or any 2 – 4 unit building as an investment, the VA will grant a VA mortgage loan as long as the applicant intends to occupy one of the units as their primary residence. The VA also requires that the home be in move-in and livable condition at the time the loan is made. The VA does not lend on uninhabitable properties, raw land, commercial property or any other property that will not be considered the applicants primary residence.

Question 8: Can I buy more than one property at a time?

The VA only issues mortgages on the veteran’s primary residence. This does not keep the veteran from being able to purchase other properties, though. If the veteran wants to purchase another property, such as an investment property, and they qualify for both mortgages, the veteran can secure other, non-VA financing to purchase other property. If you would like to discuss the other loan types that may be available to you, our in-house Pink Realty lender would be happy to help you. Just call our office at 719-393-7465 (Pink) and ask to speak to the lender.

Question 9: Who can apply for a VA loan?

VA loans are for military personnel and veterans. If a military applicant wants to include another person on their VA mortgage, the only acceptable co-applicants are the applicant’s spouse or another VA eligible applicant. Family members, friends, relatives and/or ‘significant others’ can’t be on a VA Loan with the applicant. If there are
credit issues with an applicant’s spouse, the applicant does not have to include the spouse on the application.
However, the debts of the spouse must be included so the VA has knowledge of the total liability at stake. Sometimes, the spouse’s total debt causes the debt to asset ratio to be too high to qualify for the loan. In this case, if the spouse works and has been at their job at least 2 years, the spouse’s income, up to the total monthly debt liability, can be included on the application to offset the spouse’s debt. This generally allows the debt to asset ratio to fall back in line for approval of the loan.

Question 10: What does my Credit Score have to be?

At time this article was written, the VA looks for scores of 620 or higher. (Please feel free to call Pink Realty at any to check to see if loan guidelines have changed. We are always here to help.) If the applicant’s score is a little lower than this, Pink Realty lender will work closely with the applicant to see what can be done to raise their score, and many times we can help a borderline applicant buy a new Colorado Springs home. The first item addressed is whether or not the credit report is accurate. More than 80% of the credit reports run today contain errors. Just removing the errors alone may raise the applicants score. Improving their credit score may also mean paying down a credit card balance so the outstanding balance is 50% less than the credit limit on the account or it may be as simple as paying a few low balance accounts off. Sometimes this is all that’s needed to bring the credit score up to the approval score limit. Remember that your credit score is very specific to you, and we would be happy to evaluate your situation for free any time. Just call our office at 719-393-7465 (Pink).

We hope this article answered some of your questions about VA mortgage loans so when you are in the market for a VA loan, you are ready. For more information on VA home loans, you can call a Pink Realty agent or lender at any time.Please stay tuned for more informative articles. Stop by the website regularly for new and updated information.

Investors Trending to Snag the Keepers

While the economy has created a ‘buyers’ real estate market with home values plummeting and Colorado Springs foreclosures soaring, who’s buying up the properties that are for sale? While first time home buyers are on the decline and previous buyers are being turned down because of tight credit conditions, Pink Realty agents are seeing that those with cash are the ones bringing the deals to the table. And today, it’s typically the investors that have the cash! Per Lawrence Yun, Chief Economist for the National Associate of Realtors (NAR), “Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes.”

On February 23, 2011, Jon Prior of the NAR summarized the housing sales for January 2011. All-cash sales increased to 32% of all sales in January, which was up from 29% in December 2010. Additionally, it was investors that grabbed more of the market share by accounting for 23% of all buyers in January, up from 20% in December 2010 and up 17% from one year ago.

While many investor home purchases will result in a traditional fix and flip sale, the current rental market and trends are also providing a great profit opportunity for investors. The demand for rentals in Colorado Springs is on the rise because more people are being turned down for home loans and more people are being displaced because of foreclosure or selling their home on a short sale. Colorado Springs has become a hot rental area because of the number of military personnel in the city, but also because the economy and housing market has caused so many homeowners to lose their homes to foreclosure or because they had to sell their home as a short sale. All these people are in need of housing and looking for rentals. This demand has resulted in less than 1% vacancy in Colorado Springs. Traditionally in Colorado Springs, the 3 bedroom home was always the highest in demand and considered the ‘sweet spot’ in the rental market. The 3 bedroom homes were always rented, never vacant and there were never enough of them to meet the demand for them. The larger homes that were for rent were not in demand and stayed vacant.
However, today the demand for 4 and 5 bedrooms homes is increasing. As more and more middle class families are displaced, the need for the larger rentals increases. These larger rentals also bring a nice price point to the balance sheet. The current rental rate for a 3 bedroom single family home is $1140 per month and the 4 and 5 bedrooms are $1374 and $1789 respectively.

Call Pink Realty today at 719-393-7465 (Pink) to talk to an agent and see what great deal is out there waiting for you!

There is no doubt the opportunity for investors to ‘snag the keepers’ is now.

While wholesaling and fix and flips bring fast and big profits, more investors are adding the right ‘keepers’ to their portfolio mix as rentals for additional long-term passive income. With the market trend shifting toward larger rentals, investors should also note that the larger homes with higher mortgages tend to get discounted more by the lenders when working a short sale. Many of these higher end homes are simply in need of paint and carpet. We have seen nice homes in the Stetson Hills area that needed as little as paint, carpet and linoleum flooring, but the homeowners couldn’t sell to a retail buyer because the buyers wanted a completely fixed home. Investors can buy homes for sale Colorado Springs for around $125K and get them turned into great rentals for about $10K. Cash flow on these short sales or bank owned properties would be very high.

If you call a Pink Realty agent, we would be happy to scour the market for you and find you a great property that will meet your needs.

Are you an investor who wants the upside of an investment property and today’s really cheap prices and huge cash flows but don’t want to at it alone?

The owners of Pink Realty are active, experienced investors and are always looking for partners on deals. Just give is a call at 719-393-7465 (Pink) and ask to talk to Russ or Monica about partnering on deals. We would be happy to talk to you. Just tell us what you want to bring to the table and we will see how we can work together.

• Do you qualify for the loan to buy the house? A common strategy investors are using now is to buy houses with cash, remodel the houses and then refinance the property with zero money out of pocket. We have investor friendly lenders ready to do these types of loans.

• Maybe you have a small amount of cash available and we can short a 2nd loan and bring the 1st mortgage current on a good property.

• Maybe you have a larger amount of cash available making 1% at the bank or in an IRA and you want to do something more productive with it but don’t know exactly how. We can find a really cheap house that we can buy, fix up, and rent.

10 Homebuyer Advantages for Buying a Short Sale Property

A short sale is when a lender agrees to allow a mortgaged property to be sold for less than what is owed on the mortgage. While lenders don’t like their mortgages ‘shorted’, they do understand the benefits. Lenders know the loss incurred from a short sale is far less than the loss they will incur if they allow the property to go into foreclosure. Foreclosure is very expensive process for lenders as it not only incurs expensive legal fees, but also adds the expenses of maintenance, advertising and selling, insuring the home and paying property taxes. Lenders are not in the real estate business, they are in the business of making loans, so they know that selling a property as a short sale definitely has its financial advantages.

Today, everyone knows the real estate market is depressed. The majority of Colorado Springs homes are distressed properties that are either advertised as a short sale or a foreclosed home. Property values across the country have fallen and lenders have tightened their credit requirements. The market has increased the competition between selling a home as a short sale and selling a home at a retail price. While this market causes distress for sellers, it creates prime opportunities for Pink Realty agents home buyers to find great discounted deals on properties for their clients.

The current Colorado Springs real estate market also allows home buyers to seriously scrutinize the price of retail homes. They aren’t willing to pay retail price for a home unless it is in perfect condition as there may be several other similar homes in the same neighborhood selling at a steeply discounted price. This increases the competition between the short sale and retail properties for sale, however many buyers want to shy away from short sale properties because of some negative stories they may have heard. We won’t sugarcoat the short sale process for you. It can take time and be frustrating, however, if you work with a Pink Realty agent who is experienced and knows and understands the short sale process, it helps. A real estate agent who has a good success record for getting deals done (and the Pink Realty team has closed hundreds of short sales) can make the short sale process appear seamless.

With that said, there are many advantages for buying a home as a short sale. If you are aware that the process can take longer than a retail sale, you can be prepared and plan ahead. Below are the 10 top advantages for purchasing a home as a short sale:

1. With so many distressed properties on the market, you have a huge inventory of homes in a wide variety of neighborhoods to choose from.

2. Unlike foreclosed or REO homes, you have the opportunity to talk to the seller of seller’s agent about short sale homes and to find out more information about the home. This allows you to determine what, if any, repairs may be required. In many cases, the repairs needed for a short sale property are far less than those needed for an REO property.

3. You can obtain a home for a substantial discount which saves you thousands of dollars and offers you great future equity.

4. Since the seller is trying to avoid foreclosure, they are cooperative and play an active role in the short sale process, which moves the process along faster.

5. Because the homeowners are involved, they generally see the process through to the end. As a result, they tend to keep the properties in better condition than a home that has been foreclosed on.

6. When you work with a Pink Realty agent that understands short sales and works with an experienced short sale negotiation team, the short sale process is streamlined and takes less time. Oftentimes, homebuyers work with a real estate agent that is experienced in the retail market, not the short sale market. If a homebuyer wants to put an offer on a short sale property, but is working with a real estate agent that is not familiar with short sales and the process, it can end up being a nightmare for the buyer.

7. Another way to minimize the time a short sale takes is to search for short sale properties secured by a FHA loan. The FHA pre-foreclosure sale program requires that the lender provide the minimum sales price and the minimum net they will allow. Therefore, you know what offer must be made and it shortens the short sale process tremendously as the ‘price haggling’ part of the process is eliminated.

8. Additionally, if you purchase the home as a qualifying FHA buyer, meaning you are receiving a FHA loan to buy the property, the short sale lender agrees to pay 1% of your closing costs saving you additional money.

9. If you are pre-qualified for a home loan from your lender or intend to purchase the property as a ‘cash’ deal, the short sale process also moves along faster.

10. Buying a short sale property also helps stabilize the market and improve the condition of the neighborhood you are buying in because it keeps one more property from being foreclosed. Foreclosed properties lower the value of neighboring homes more because they are vacant, less maintained and increase the risk of crime and vandalism to the vacant homes.

Pink Realty is known for its talented and experienced short sale agents. Our real estate agents know the Colorado Springs foreclosures and they know and understand the short sale process. Additionally, we work directly with an experienced short sale staff that has a known tract record for successfully negotiating short sale deals. If you are a home buyer in the market to purchase a home, contact Pink Realty at 719-393-7465 (Pink). Our agents will help you find the home you are looking for.

 

What You Need To Know Before Getting A Mortgage

Getting a mortgage is one of the most complicated steps in buying a homes for sale Colorado Springs or anywhere. Will I qualify for a home loan? What do I need to get pre-approved? What type of mortgage can I qualify for – FHA, VA, conventional, an ARM, fixed rate, …? What is the best type of mortgage to get for my situation? Should I go to my bank or find a Mortgage Broker? Learning more about what you should know is important. Preparing yourself and doing your homework will take some of the stress away and speed up the closing process for you once you’ve made an offer on a house.

In other Pink Realty blogs and articles we gave you a lot of information about credit score requirements and how you can best raise your credit score to meet the minimum requirements for conventional, FHA and VA loans. Referring back to some of this information or even calling Pink Realty at 719-393-7465 (Pink) and asking to speak to our in-house lender will let you know what to expect with your credit and what work you might have to do to qualify. If you think your credit may need some improvement, our lender will help you and will work with you for however long it takes and at no cost to you to build your score and get you qualified.

Lenders can either pre-qualify or pre-approve you. What’s the difference? Getting pre-approved or pre-qualified helps you know how much of a mortgage you can afford, but there is a big difference between being pre-qualified and being pre-approved. While these terms are used pretty loosely in the industry, generally when a lender pre-qualifies you, they run a credit check and base their determination on information you provide them about your work history , income, and available down payment either verbally or maybe with documentation but possibly not complete documentation for their underwriting. The bottom line is that a pre-qualification is largely based on what you tell them. It is possible that the pre-qualification results can mislead you on how much of a mortgage you can really afford.

When you get pre-approved, lenders check your credit report and verify all documentation similar to if they were submitting the application to their underwriting department. This essentially makes the only unknown in the transaction the property.

When you are ready to get pre-approved for a mortgage, be sure to call Pink Realty at 719-396-7465 (Pink) and as to speak to our lender. She would be happy to give you a good faith estimate of what she can do for you and earn your business.

If you are getting pre-approved before you begin house shopping, consider locking in your rate for a period of time, especially if the rates have been increasing. Once you have your pre-approval letter, it shows real estate agents and sellers that you are serious about buying a house and you know what price range you can afford. This not only helps your Pink Realty agent narrow their search for a home into your price range, it also can motivate sellers.

Additionally, once you are pre-approved, don’t do anything that will affect your credit score. Don’t incur new debt (this includes incurring more debt on credit cards), don’t pay off debt, cancel any accounts, transfer any credit card balances and don’t change jobs! Your lender will pull your credit again before you close and you don’t want you credit to have changed or you could lose your approval!

Once you have chosen a lender and are ready to begin the mortgage process there is a lot of paperwork that needs to be processed. You will be required to provide copies of specific financial information. So when you are ready to begin looking for a house and a mortgage, you can start preparing by rounding up the items you will need. The following is a list of the information and documents you will have to provide your mortgage lender if you want to get approved for a mortgage loan:

Information about your employment and your income:

1. Where do you work, how long have you been at your job, and what is your income?

2. Are you a 1099 contract paid worker, paid on commission only, or do you receive a steady hourly wage or regular salary?

3. You will have to show proof of your income. This will include providing tax returns, 1099 statements, paystubs, etc.

4. If you receive disability pay or social security income, you will have to provide statements.

5. Depending on how you receive your income, a steady salary with paystubs or irregular income as a 1099 contractor, your interest rate could be higher. A steady paycheck is generally deemed less risky than pay on commission only or as a contractor.

What are your outstanding debts?

1. You will have to provide information about your recurring debts whether they are for a car loan, a student loan, or credit cards. When the lender runs your credit report these accounts will show on your record, so be honest!

2. The total amount of your recurring debt will be analyzed against your monthly pre-taxed income and a debt-to-income ratio will be calculated.

How much do you have in cash reserves?

1. How much is your down payment and do you have enough cash to make this down payment and cover the required closing costs?

2. Is the money you are using to make the down payment your own money or is it borrowed funds or a gift?

3. You will have to provide the lender with copies of bank statements to show you have enough money to cover these costs. If you are receiving a gift for your down payment from a family member, a friend or a non-profit agency, you will have to provide a gift letter to the lender.

4. Lenders need to know if your cash reserves will be completely depleted after you pay your down payment and closing costs because they want to know you will have enough money left in the bank to cover a couple of mortgage payments in case something happens!

What works in your favor?

The following is a list of things that will definitely benefit you when you are applying for a mortgage:

1. Being employed by the same employer for two or at least being employed in the same line of work for that period of time or longer.

2. Having minimal debt and no recent large purchases, such as an automobile. If your debt-to-income ratio is 36% or less, you are in pretty good shape! You can call Pink Realty, and our lender can help you evaluate your debt ratios. Call 719-393-7465 (Pink).

3. If you can afford to put at least 5% of the sales price down with your own funds. If you qualify for an FHA loan, you may only have to put as little as 3.5% down, or if you are a VA buyer, you may not have to put down anything, but the more you can put down, the better. If you are trying to qualify for a conventional loan, you can qualify for as little as 5% down, but you will have to pay private mortgage insurance which can be expensive and is added to your monthly payment.

4. Having enough cash reserves left in the bank to cover two mortgage payments after you have paid your down payment and closing costs.

Things that can make it more difficult to obtain a home loan?

1. If you are self employed, a contract worker, work on commission only, or have irregular income. You may be considered a higher risk if your income isn’t steady, based only on commissions or if you are paid as a 1099 contract worker. If you are self-employed and have tax returns that solidly substantiate your income your risk can be reduced, but in addition to tax returns, you will also have to show profit and loss statements for your business.

2. If you have a lot of recurring debt or a high amount of debt and your debt-to-income ratio is higher than 36%, you may run into issues or be charged a higher interest rate.

3. If the cash reserves you have will be completely depleted after you have made your down payment and paid for closing costs, the lender can consider you a higher risk because if you lose your job or get injured and can’t work for a period of time, there is a risk you may not be able to make your mortgage payment.

4. If you are receiving gift funds for your down payment because you have no funds of your own to purchase the home, you can also be considered a higher risk and may be charged a higher interest rate.

Before Getting a Mortgage, consider the following:

1. Know what your budget is so you know what size mortgage you can really afford. You can be given a pre-qualifying mortgage amount by a lender based on your income, but you also have to take your monthly recurring debts into consideration, along with unexpected expenses such as medical bills..

2. Depending on your cash situation, you need to know if it is more important to offset a higher rate with lower closing costs or a lower rate with higher closing costs. When you are shopping for mortgage quotes, don’t just look for the lowest interest rate. You also want to compare the terms and conditions. There is a lot of competition out there today, so be sure to ask your lender for any special incentives. Lenders may be willing to waive some fees to attract your business!

When shopping for a mortgage quote, be sure to ask the following questions?

1. What will my monthly payments be?

2. Are there any pre-payment penalties?

3. Are the terms fixed or variable? If the interest rate is variable, what is the interest rate cap? In other words, what’s the highest my interest rate can go and what will the payments be at this rate?

4. Do I have to pay any loan origination fees?

5. Do I have to pay any discount fees for this interest rate?

6. Are there any lender incentives? In other words, will the lender pay any of the closing costs or waive any fees?

7. Will I have to pay private mortgage insurance?

What not to do after you have been approved!

After you have been approved for a mortgage and have received your pre-approval letter from your lender, do not do any of the following or you can jeopardize your approval:

1. Don’t apply for new credit as the inquiries will change your credit score.

2. Make sure you pay all your recurring debt payments on time.

3. Don’t pay off collections or charge off accounts unless specifically told to do so by your lender.

4. Don’t charge more on your credit cards and don’t close any credit card accounts or transfer any credit card balances.
5. Don’t make any large cash purchases as this may decrease your verifiable bank balances.

6. Don’t quite your job.

7. Don’t change your job without first consulting your loan officer.

8. Don’t bounce any checks.

Do your homework and become an educated consumer! Knowledge is power and knowing what’s required to get a mortgage, how to determine the amount of mortgage you can safely afford, and how to shop and negotiate for the best mortgage for your situation will benefit you tremendously. If you have any questions or want help, Pink Realty is here to help you. Give us a call at 719-393-7465 (Pink). Our loan officer will be happy to help you with a loan, and then a Pink Realty can help you find your dream Colorado Springs house! We want to help you through the whole process and feel all the rewards of homeownership! Give us a call today. We are here to help you!

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.