America’s largest home builder DR Horton has choosen National Credit Federation as it’s go to credit repair company!

I have been in Houston, TX the last few days with one of our Regional Directors Dan Fries, who laid the ground work for this relationship, along with several other NCF consultants.

You see DR Horton having partnered with Bank of America as it’s go to mortgage lender knew that many people could not buy their dream home or for that matter their first home due to their credit scores.  As Alfredo Rodriquez, the Director of “My New Home” a pilot program of DR Horton designed to put more people into a home of their own, explained to me… they needed the best credit repair company they could find and their search ended with an agreement to have National Credit Federation as it’s sole source for those with credit challenges.  His biggest reason was…

We are living in crazy times!

There appears to be an over abundance of homeowners on the horizon that are looking to “buy and bail”. Talking with many mortgage brokers the trend seems be be on the rise as they are experiencing more calls from prospective homeowners looking to finance a new home so they can dump their current property to buy a new one that in many cases is more home for less dollars.

This is the one of the newest trends that mortgage lenders are being watchful of as the trend continues even though Fannie Mae and Freddie Mac have pulled out all stops trying to tighten down the noose on many would be homeowners according to Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency.

The Reality…

According to a new survey released by Freddie Mac announced the lowest 30 year mortgage rate at 4.57%. These mortgage rates are linked to the yields on Treasuries and also the yields on mortgage-backed securities.

In an article for Reuters written by Julie Haviv:

While low rates and high affordability have helped the housing market gain ground, it has struggled in recent months given stubbornly high unemployment and mounting foreclosures. Home loan refinancing, however, puts more cash into consumers’ hands to funnel into the U.S. economy and could help many homeowners avoid foreclosure.

Really, the better question should be “How MUCH does bad credit cost you?  In a word…TONS!

Your FICO scores are determined by a number of things but most importantly how timely your credit is paid and the overall amount of credit used as compared to your credit lines available.  Of course other factors come into play but these two play the most significant in determining your credit score.

Your credit score for many lenders is the biggest factor if your loan will be approved at all and at what interest rate. To give you an example I was speaking to one of our members and he was telling me he had a credit score of 552 and over the last few months had increased his scores to 632.  At first you might say not to shabby, an 80 point increase.  I agree,  an 80 point credit score increase is nothing to sneeze at and certainly looks like some solid credit repair has been under way!

A discussion on a well guarded secret to keep your credit scores suppressed…

One of our consultants popped in yesterday afternoon to drop off a deal (a good thing).  He was telling me of a situation he ran into and wanted to know what kind of an effect it could have on his prospects credit score.

Well the situation was a $110k line of credit which had a balance of 96k.  This particular credit line was rated R-1 paid as agreed.  A perfect rating, right?  or was it?

Unfortunately we see this kind of thing all the time…

Today, I’d like to tell you what mortgage lenders look for in when deciding on granting your request for a new mortgage loan. Now this is not meant to be an underwriting class but a basic understanding of the process and what  you’ll want to consider as you begin thinking about buying a new home.

When you’re looking for a new mortgage many lenders evaluate your credit based on the “Three C’s.”

Credit
Is it likely that you will repay the loan? Are your payments on time and up-to-date? Are you financially stable and reliable?  What are your credit scores?  Today’s marketplace, most conventional lenders require your scores to be in the 700+ range and most FHA loans a 620 score or higher.

Capacity
Are you able to pay the loan? What kind of outstanding personal debt do you have? Do you have enough earning power and net worth to repay a mortgage or home equity line of credit?

Many people are concerned how their mortgage loan is affected if forced into a bankruptcy and when someone experiences financial crisis like job loss, medical crisis or business failure, it can become quite difficult for them to repay  all of their existing loans or debts. Filing bankruptcy may seem to be a viable option in order to get rid of these debts, but you should know it may become difficult to qualify for a new mortgage.  At least right away.  You should also know that your existing mortgage gets affected when you file bankruptcy.

What happens to your existing mortgage after bankruptcy filing?

When you need to declare bankruptcy, you usually will want to file either chapter 7 or chapter 13.  However, the consequences of filing chapter 7 are different from that of chapter 13.  The effects on your existing mortgage after filing bankruptcy are discussed below.