How Important is Your Credit Score? Crucial!

Want Better Credit? Know the Score.

By Nancy Trejos
Washington Post Staff Writer
Saturday, July 21, 2007; F01

Credit scores have become increasingly important for American consumers. A survey released this week shows that more people seem to have realized this and have figured out their scores.

Yet most Americans do not understand what those scores mean or how they affect their ability to get mortgages, according to the survey of 1,000 adult Americans commissioned by the nonprofit Consumer Federation of America and the lender Washington Mutual.

And their knowledge of credit scores has not improved since the last time the survey was conducted, two years ago.

“Even those who have obtained their scores have serious knowledge deficiencies,” said Stephen Brobeck, the federation’s executive director.

The percentage of those who know the purpose of credit scores — to show their risk of not repaying a loan — rose only from 27 percent to 29 percent since 2005.

The percentages of respondents who incorrectly believe that income, age and education influence their scores increased.

In addition, many said they believe that their state of residence and ethnicity affect their scores. They do not. Their debt-to-income ratios, payment history and credit lines do.

Perhaps most disturbing to those who commissioned the survey, only 24 percent know that the minimum score typically needed to qualify for a low-cost mortgage is 700.

“A credit score cannot be meaningful if you don’t know that information,” Brobeck said.

Fair Isaac Corp.’s FICO credit score, the nation’s most widely used formula, ranges from 300 to 850.

Borrowers with scores below 600 are typically charged high “subprime” loan rates. Those with scores exceeding 760 get the lowest rates. And each consumer has more than one score. Each of the three major credit bureaus — Equifax, TransUnion and Experian — generates a score.

The gaps in knowledge can be costly, Brobeck said. Homeowners with 30-year, fixed-rate mortgages of $300,000, for example, would pay $5,148 less in interest if they raised their credit scores from the range of 580 to 619 to the 660-to-699 range, according to Fair Isaac.

If all consumers raised their scores by 30 points, total savings would exceed $20 billion, according to a Washington Mutual analysis.

But it doesn’t take a lot to lower one’s score.

“One missed payment is a significant ding,” said Anthony Vuoto, president of Washington Mutual Card Services. In fact, it can cost you 30 or more points, he said. And the better your payment record, the bigger that ding.

“The consumer is really the master of their own destiny when it come to these scores,” he said.

Benefits – working with a Realtor

After the Purchase, The Biggest Benefits Buyers Got from Their Agents

Understanding the process (First-timers – 77%, Repeat Buyers – 47%)

Improved buyer’s knowledge of search areas (First-timers – 42%, Repeat Buyers - 43%)

Pointing out unnoticed features/faults with property (First-timers – 38%, Repeat Buyers – 41%)

Negotiated better sales contract terms (First-timers – 37%, Repeat Buyers – 29%)

Shortened buyer’s home search (First-timers – 35%, Repeat Buyers – 40%)

Proved better list of mortgage lenders (First-timers – 30%, Repeat Buyers – 27%)

source – July/August 2007 – Capital Area Realtor newsletter

Announcement – Brand New Senior Citizen Homeowner Property Tax Program

Government Assistance to
Homebuyers and Homeowners
in the District of Columbia
 

The District of Columbia Government provides the most generous set of homebuyer support and tax benefits of any location in the country.  These benefits include Down Payment Assistance, Closing Cost Credits, Real Estate Tax Abatement and a special Federal Income Tax Credit.  Most people, including many real estate professionals and mortgage lenders, don’t know about all the programs. Homebuyers should learn about these benefits and take full advantage. For further information call the organizations noted below.

1. The Home Purchase Assistance Program (HPAP) provides to low and moderate income first-time homebuyers down payment assistance of up to $70,000 and needed closing cost assistance of up to $7000. Eligibility includes income, family size, and DC residency. (For further information, call a HUD-approved counseling agency on this website’s list.)

1. The Employee Assisted Housing Program (EAHP) provides DC Government employees deferred payment second mortgages of up to $10,000 and down payment and closing cost funds of up to $1500. (Call a HUD-approved counseling agency on this website’s list.)

1. The Metropolitan Police Housing Assistance Program (MPHAP) provides $10,000 deferred payment second mortgages.  Also, eligible police officers may receive an annual income tax credit of $2000 and a partial property tax credit, each for five years. (Call a HUD-approved counseling agency on this website’s list.)

1. Property Tax Abatement has two benefits for first time homebuyers in DC on purchase prices up to $264,000. a. Payment of property tax is waived for five years and is available to those who meet income guidelines such as $71,520 for a family of four; b. Assistance for closing costs or down payment in an amount equal to 2.2% of the purchase price is also available to eligible homeowners if conditions are met.  (Call the Office of Tax and Revenue at 202 727-4829.)

1. The Individual Development Account program provides prospective borrowers with up to $3 in matching funds for every $1 saved up to a total of $4000 for use in their home purchase. (Call the Manna Homebuyer Club at 202 832-1845.)

1. The DC Housing Finance Agency home mortgage program, known as the “DC Bond Program,” periodically provides first mortgages at discounted interest rates. (Call 202 777-1600.)

1. The up to $5000 DC Home Buyer Tax Credit is provided as a federal income tax credit to first-time buyers who meet the maximum income limits.  (Call IRS at 1 800 TAX-FORM for the form to file for the credit with your federal tax return.)

1. The DC Homestead Deduction reduces, in FY 2007, a homeowner’s property tax by $552 for most owner-occupied homes. (Call Office of Tax and Revenue at 202 727-4829.)

1. The DC Senior Citizen or Disabled homeowner program cuts property taxes in half. (Call Office of Tax and Revenue at 202 727-4829.)

1. Three DC Home rehabilitation programs for senior citizens, handicapped accessibility, and code violation repairs are available in amounts up to $10,000 and above. (Call a HUD–approved counseling agency on this website’s list.)

Realtors and e-PRO statistics

People often wonder just how many realtors are licensed..so here are some statistics…including the number of realtors

in California which is one of the states with the largest number of licensed REALTOR in the United States.  As of early July 2007, there were:

 

Total REALTOR population of around 1.3 Million

California REALTOR population around 190,000

 

Total e-PROs Nationwide: 28,907

Total e-PROs in California: 4,051

Having a e-PRO certification indicates a REALTOR’s strong commitment to incorporating

technology in their business and potentially including email communication, cell phones, and

websites, digital cameras, real estate blogs, digital listing enhancements such as virtual

tours, etc. This serves the general public and their clients and customers with excellent

real estate service.