As little as 2 years ago, an individual with a 640 credit score could find an acceptable mortgage rate, without much in the way of pricing add ons.  Since the bottom fell out of the mortgage credit markets, back in late 2007/early 2008, credit has gotten progressively more and more important.  In fact, “important” is actually underestimating the value.

In 2007, and earlier, there were as few as 4-5 credit score tiers, by which mortgage pricing was derived.  Currently, there are at least 8-10 tiers dividing mortgage pricing determination and they are separated by as little as 19 score points to each tier! These are considered in conjunction with the type of financing (purchase/rate term refi vs. cash out… owner occupied vs. investor) AND loan to value (LTV) and combined LTV (CLTV) of your loan.  There are instances when a borrower could have the virtual “Dagwood Sandwich” of add ons, given the current state of the market.

What does this mean?  It means that, in some cases, depending on the score tier that you “reside” in and your LTV, it might cost a borrower as much as an extra 1/2 point to 1 1/4 points (a point being 1% of the loan amount) to get the same rate as another individual with a score that might be 19 points higher!  Additionally, in the past, depending on the lender, the score used to determine your mortgage rate might have been the middle score of the main breadwinner of the household.  Now, almost inevitably, the lower of the middle scores of both (all) borrowers is used.  So two borrowers can no longer slide into a mortgage using the high credit score of only the main borrower.

There are a number of legitimate things that consumers can do to improve their score.  I will go into those things in a little more detail in future posts.  For the time being, suffice to say that consumers should be ultra conscious of what their credit score is and consciously take even small steps to be improving their score on an ongoing basis.  Sometimes something as little as not closing credit card accounts after paying them off, or strategically analyzing which accounts to pay off, rather than just paying off the highest interest rate or lowest balance, will go a long way toward score improvement in seeking a home mortgage loan.

Bottom line… consult one or more qualified professionals and determine the course that makes the most sense for your given situation.

More later…

HAPPY THANKSGIVING, from Chuck Murphy, Hiton Financial and Illinoishomemortgagerates.com!  Enjoy the time with friends and family!

The question: “When do I jump off the fence and purchase or refinance?” Mortgage rates continued to make favorable progress today and crossed below the 4.750% range for excellent credit (740+) borrowers pursuing purchases or rate and term refinances. Cash out borrowers and those with lower credit scores will pay a premium and experience a higher rate.

I continue to be amazed  at the level of rates we’re currently experiencing… especially in light of the volatility the market experienced just a few months ago.

The real question is not “How low will they go?”… the real question is “How long will they stay there, and how long will I be able to take advantage of this?”

With sub-4.750% fixed rates and $8,000 in first time homebuyer tax credit money, I would think the lines at Illinois real estate offices should rival those that you might see at Best Buy on Black Friday!!!  And existing home owners… this holiday season, give a gift to yourself… the gift of improved cash flow through lower interest rates.  It is truly the gift that keeps on giving!

Folks… I’ve been in the mortgage business in Illinois for over 25 years and NEVER have I seen rates this low! This is history in the making and people need to take advantage of it while it’s still here.

The government programs to allow certain segments of the population who’s property values have suffered, will not be around forever.  Likewise, the homebuyer tax credit for first time home buyers, and now for current home owners, will only be around until April!  Additionally, the government is currently buying mortgage backed securities at the rate of anywhere from $14 billion to $25 billion per week, and that will/can not continue for long.

Bottom line… if you currently have a rate of 5.500% or over, or currently have an ARM/interest only loan that’s going to convert and are worried about the future, NOW IS THE TIME TO LOOK INTO A NEW FIXED RATE MORTGAGE!

I’m happy to help!

A petition containing 117,000+ signatures to end HVCC (Home Value Code of Conduct), is being presented by Brian Stevens and Frank Garay from Think Big Work Small, to  Andrew Cuomo, today in New York.

According to HVCCpetition.com, the signing statistics were as follows:

• 39.6% if the petition signers were mortgage originators
• 29.8% of the petition signers were real estate professionals
• 17.4% of the petition signers indicated they worked in some other facet of the industry
• The  remainder of the petition signers were primarily home owners or potential home buyers

For those unfamiliar with HVCC… this bit of legislation stopped the ability of mortgage brokers to order appraisals from the sources that they are familiar with and put the appraisal process in the hands of the ultimate lender the loan would be placed with.  The HVCC procedure has resulted in appraisal delays and additional costs to the borrower and has all but eliminated the borrower’s ability, without incurring the cost of another appraisal, to have their loan placed at another lender, once the appraisal has been ordered.

Stay tuned for further news on this very important issue affecting the mortgage and real estate industry.

Illinois Home Buyers Take Note… Home buyer Tax Credit Extended and Enhanced!

On November 5, 2009, Congress gave final approval to legislation expanding an $8,000 tax credit for first-time home buyers, and President Obama signed the bill on November 6, 2009!

Highlights:

• The new bill extends, until April 30, the $8,000 tax credit for first-time homebuyers that would otherwise expire at the end of this month.
• The legislation will allow the credit for couples earning up to $225,000 a year and individuals earning up to $125,000. That’s up from the current $75,000 limit for individuals and $150,000 for couples.
• It also will allow home buyers who have owned their prior residence for at least five years to receive a $6,500 credit. Those who sell their new home, or no longer use it as their main residence within three years, would have to repay the credit. Homes worth more than $800,000 wouldn’t be eligible.

This is great news for both first time home buyers and existing home owners who have been thinking about buying rather than just a new mortgage!

This website is currently under development!  Please check back in a few days for updated information.

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