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.

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

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.)

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.

Orange Report

Activity for May 2007 by Local Jurisdiction

Report Date:  June 15, 2007

Condominium Sales and All Property Contracts:  May 2007 v. May 2006

*All property types.

Source: City Influence

Wasn’t there a moment when you drove by an intriguing house,

and you’ve wondered what the interior looked like? Now picture

the same house with a rusty mailbox, overgrown hedges, and

sea of dandelions waving above two weeks of lawn growth?

Does your mind wonder now to what lies inside — could the same

house have a kitchen or bathrooms that needs updating? What if the

same house, perhaps your house, was for sale?

Don’t let the lack of curb appeal be a reason for buyers to dismiss

going inside! Remember the time you drove up to a house with

your own Realtor, only to decide to skip entering the property because

of its exterior “condition”?

If you are selling, here are seven areas to spruce up:

1) Landscaping -  Take a look at the house from all directions. Buyers can visualize

children playing in the yard or themselves sipping cool lemonade drinks

on the patio. They don’t want to ”see” mowing instead. Absolute necessities: remove

dead plants, weeds, and add new mulch. Trim scrubs to reveal windows. If need be,

for a short time, hire a gardener while your house is on the market and fertilize

and water the lawn. Edge the lawn, sidewalks, gardens and driveways.

2) At night, turn on the lights. Neighbors driving home from work might call

their friends and acquaintances to share the news of your home on the market. Plus

a warm glow from the house looks inviting.

3) Remove clutter - Banish unnecessary tools, toys, extra bags of mulch or bikes

or mismatched patio furniture.

4) Exterior Painting –  Remove peeling paint and repaint affected areas. Wash the

windows inside and out to make them sparkle.

5) Front Door – Paint the door a complimentary color to the exterior. Add a new welcome mat

and place flower pots with freshly planted annuals on either side of the door to welcome

your guests inside. A brand new doorknocker will brighten buyers’ faces.

6) Concrete – Use a power washer with water to lighten and remove good ole grime on sidewalks and

driveways.

7) Fix it projects - Replace missing fence posts, add lightbulbs to front porch lights, restain decks, etc.

A couple of weekends of effort and a few hundred dollars later will bring potentially tens of thousands of dollars

of value to your home. Remember, this critical point, if you can’t get them to cross the front door

threshold, you can’t sell the house. Attending to these details, could be difference between having your home

a short time on the market and maximize potential for a top sales price or lagging on the market begging

for a price reduction from potential buyers. In the end, they want a house that was previously loved and well

cared for to possibly become their new home!

Written by your neighborhood Realtor, Kathleen Ryan, e-PRO, www.kathleenryanhomes.com, 240-418-3127 (mobile)

Home sales in the first quarter were down 6.6 percent from a year ago nationally, but sales of existing homes in the District jumped 9.3 percent, the second biggest increase in the country.

A quarterly report from the National Association of Realtors also says Washington-area home prices rose a modest 1.2 percent from year-ago levels, while nationally, median home prices fell 1.8 percent to a two-year low. Prices fell in almost half the U.S. cities listed in the NAR report.       
       
The median price of an existing home in the Washington area was $427,800 last quarter, compared with $422,800 a year ago.

The biggest gain in year-over-year median prices was in Cumberland, Md., up 17.1 percent, to $100,000. Sales in the District were outpaced only by a 20 percent gain in Wyoming, but sales were down 5.7 percent from a year ago in Virginia and down 10 percent in Maryland.

While the numbers look better locally than they do nationally, the National Association of Realtors said the report shows a broad stabilization in the housing market.

“It appears the worst of the price correction is behind us,” said NAR President Pat Combs. “More stable home prices and declining mortgage interest rates are increasing buying power, which should encourage potential buyers who’ve been on the sidelines.”

The most expensive market in the nation last quarter was San Jose, Calif., with a median home price of $788,000. The cheapest market was Elmira, N.Y., at $75,300.

Source: Washington Business Journal – 12:27 PM EDT Tuesday, May 15, 2007, Jeff Clabaugh, Staff Reporter

Buying your first home is expensive and tough. It is scary. It is also usually more expensive than renting. Why do it then?

In our country it is almost impossible to save your way to wealth. Most people do not earn enough so that they can sock away $100,000 a year into their savings account and be ready to retire young. Most people cannot even save $5,000 a year!

The way that people in this country create wealth is by investing and by leveraging their money. The single best place to invest and to gain the most leverege (return on a small investment) with one’s money is by owning the home that they live in. 

Although in the first few years it seems like it is so expensive, what happens is that as the years pass, the payment stays relatively the same. Your income goes up with inflation and the payment gets easier and easier to pay every year. The average annual increase in a person’s income is 3% to 5%.  Compare that to the average annual increase in the cost of a home at 6.9%! Ask anyone who bought a home ten years ago or twenty years ago if they don’t have a small house payment compared to what they would be renting for today…or especially compared to what they would be paying if they bought the same house today.   Think about it…could you live on what you were earning ten years ago? Imagine having the low housing expenses of ten years ago. Owning your home is a way to stabilize your housing costs so that when you are a senior citizen you are not still paying market rate rent. Poverty for our seniors is a very real thing. Living on a fixed social security income while paying market rent is almost impossible.  It guarantees that you will have to work the rest of your life well past when you might have wanted to retire.  It often means that you will have to work forever!

Year after year the value of the property goes up.  The average increase in value over the past 30 years here is 6.9% per year.  Some years it is more, some years it is less.  The average increase in value of rental property to you is ZERO!  When you are renting you are just paying someone else’s mortgage.  The landlord thought owning your rental home was a good idea for some reason…so you could pay for it!

This average 6.9% appreciation is a fact given by the Center for Economic Research at George Mason University.  They are not in the real estate business.  The important part about it is that the 6.9% is the increase in value on the entire value of your home.  You only put down a small downpayment to buy your home but you get the return on the entire thing!

One example would be if you bought a  $300,000 home.  After one year, the increase in value at the average rate would be $20,700 Can you save $20,700 a year while you pay your rent?  This appreciation is FREE money to you!! You don’t even have to earn it and save it!  Most people get an annual raise that equals somewhere in the range of three to five percent.  That is three to five percent of your income, not of your home’s value.  See how you cannot save from your paycheck as fast as a house will grow your savings?

On top of all of this, you can deduct the interest payments on your mortgage and reduce your income taxes significantly.  Between the money saved on your income taxes and the appreciation earned even in a low appreciation year, you are almost living there for free.  That’s why so many people own where they live despite the fact that it seems more expensive in the beginning.  

Save your self from a future of struggle and take the leap that will secure your financial stability. Homeownership can do this for you.  Every year that passes puts you farther behind. It only takes guts, some money and some OK credit.  You can do it!

 Adapted from a speech by Holly Worthington

When you buy any Long & Foster listing and secure a traditional 30-year fixed rate mortgage through Prosperity Mortgage, a L & F Company, we will reduce the rate on your mortgage by 1/2% for the entire first year!

For example, on May 1, the rate on a 30-year fixed rate mortgage was  6 1/4%, so your rate though L & F and P M in that case would be 5 3/4% (6.244% APR) for the first year. P M loan officers work in every one of the L & F ‘s 259 sales offices, so please call a hardworking, highly-professional L & F agent today and ask them to team up with P M loan officer to help you buy a home! Call soon this program won’t last long. Contact Kathleen Ryan at 1-240-418-3127 to learn more.