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Jon Klein, P.A., GRI's Blog

By Jon Klein, P.A., GRI | Agent in Parkland, FL
  • 3 Tips To Get The Best Results On Your Mortgage Application

    Posted Under: Home Buying in Parkland, Financing in Parkland, Credit Score in Parkland  |  March 8, 2013 7:19 AM  |  220 views  |  No comments
    Home Loan Approval TipsAlthough the financial markets have tightened lending guidelines and financing requirements over the last few years, the right advice when applying for your loan can make a big difference.

    Not all loans are approved. And even when they aren’t approved immediately, it doesn’t have to be the end of your real estate dreams.

    There are many reasons why a mortgage loan for the purchase of your real estate could be declined.

    Here are a few things to understand and prepare for when applying for a mortgage:

    Loan-to-Value Ratio

    The loan-to-value ratio (LTV) is the percentage of the appraised value of the real estate that you are trying to finance.

    For example, if you are trying to finance a home that costs $100,000, and want to borrow $75,000, your LTV is 75%.

    Lenders generally don’t like a high LTV ratio. The higher the ratio, the harder it normally is to qualify for a mortgage.

    You can positively affect the LTV by saving for a larger down payment.

    Credit-to-Debt Ratio

    Your credit score can be affected negatively, which in turn affects your mortgage loan if you have a high credit-to-debt ratio.

    The ratio is figured by dividing the amount of credit available to you on a credit card or auto loan, and dividing it by how much you currently owe.

    High debt loads make a borrower less attractive to many lenders.

    Try to keep your debt to under 50% of what is available to you. Lenders will appreciate it, and you will be more likely to get approved for a mortgage.

    No Credit or Bad Credit

    Few things can derail your mortgage loan approval like negative credit issues.

    Having no credit record can sometimes present as much difficulty with your loan approval as having negative credit.

    With no record of timely loan payments in your credit history, a lender is unable to determine your likelihood to repay the new mortgage.

    Some lenders and loan programs may consider other records of payment, like utility bills and rent reports from your landlord.

    Talk to your loan officer to determine which of these issues might apply to you, and take the steps to correct them.

    Then, you can finance the home of your dreams.

    Click here to Search Parkland Homes

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  • 3 Common Myths About Real Estate Short Sales

    Posted Under: General Area in Parkland, Home Selling in Parkland, Credit Score in Parkland  |  February 21, 2013 8:24 AM  |  155 views  |  1 comment
    3 Common Short Sale MythsThere is a lot of misleading and incorrect information about Parkland & Coral Springs real estate short sales.

    Many people don’t have a clear understanding of the purpose of short sales or how they actually work.

    Essentially, a short sale is when one sells their home for less than the balance remaining on the mortgage attached to the property.

    The proceeds from the sale are used to repay a pre-negotiated portion of the balance to settle the debt.

    A short sale can be a solution for homeowners who really need to sell their home but owe more on the mortgage than the home is worth.

    Understanding the short sale process can help make the most out of a real estate sale.

    Here are some common myths and why they are false:

    A short sale damages one’s credit record as much as foreclosure

    In many cases a short sale is less damaging to your credit record than a foreclosure. Some lenders may think that the short seller acted in a more responsible manner than simply walking away from the property.

    Although the amount paid may have been less than the mortgage balance outstanding, the loan was settled with the lender. Opting for foreclosure is often seen as a lack of responsibility.

    To qualify for a short sale one must be behind on payments

    This might have been true in the past, but it’s not anymore.

    You just need to be able to prove that you are in financial hardship, which could be due to death in the family, divorce, job loss, mortgage rate hike or even loss of property value.

    After a short sale you can’t buy again for five to seven years

    This may be true in some cases, but not all. In certain situations the waiting period can be reduced as low as two or three years before you are allowed to purchase another home.

    It would be wise to speak with a licensed real estate professional or home financing specialist to get the most current options in your marketplace.

    Pass it on

    These are just a few examples of commonly believed short sale myths. A clear understanding of the short sale and the benefits it  can provide is important for financially strapped homeowners.

    Feel free to pass this important information on to someone that you feel would benefit from it.



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  • Improve Your Credit Score To Get Better Mortgage Rates

    Posted Under: General Area in Parkland, Home Buying in Parkland, Credit Score in Parkland  |  January 23, 2013 3:05 AM  |  130 views  |  No comments
    Credit score FICO improvementFor home buyers in Parkland and nationwide, credit scores can change low mortgage rates and alter home loan approvals.

    Borrowers with high credit scores get access to lower mortgage rates, for example, and can find the mortgage approval process to be smoother than borrowers with low credit scores.

    If your credit score is low, here are some basic ways to help improve it.

    Get The Reports
    Download an updated version of your credit report from each of the three major reporting bureaus — Equifax, Experian and TransUnion. The reports may mirror each other, but credit accounts — especially derogatory ones — sometimes don’t appear on all three. Ordering reports from all three bureaus is a safety step. Note that the credit bureaus each use different scoring models so your credit scores will vary.

    Check For Errors
    Yes, credit reports can have errors in them. Should you find any items on any of the three credit reports which, in your opinion, do not belong or are erroneous, contact the credit bureau regarding removal. Errors on a credit report must be addressed with each bureau individually.

    Pay Up 
    Or, rather, pay down. Be diligent about paying down your credit card balances in order to lower the percentage of your credit line(s) in use. In general, aim for a 30% ratio or less. An added benefit of paying down debt is that it can lower your total monthly debt load, which can increase your maximum home purchase price.

    For items which are harming your score, such as a 30-day or 60-day mortgage late payments, medical collection items, and/or judgments, consider writing a brief letter which explains the circumstance of the derogatory credit event. Such a letter won’t help your score to improve, but it can help your lender to make better credit decisions, which can aid in “exceptions”, if required.

    Making even minor changes to an overall credit profile can yield measurable long-term results. It can also result in lower mortgage rates.

    Click here to Search Parkland Homes

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  • How To Improve Your FICO Score

    Posted Under: Home Buying in Parkland, Financing in Parkland, Credit Score in Parkland  |  October 19, 2012 10:25 AM  |  213 views  |  No comments
    The U.S. housing market recovery is underway. New home sales are at a multi-year high, housing starts are at pre-recession levels, and home builders plan for a strong 2013.

    Since late-2011, falling mortgage rates have boosted buyer purchasing power. Now, today, in many U.S. markets, the number of active home buyers outnumbers the number of active home sellers. It’s among the reasons why home supplies remain scarce and why home prices are rising.

    Roughly 20 percent of today’s home buyers purchase homes with cash. For everyone else, the ability to gain mortgage approval depends on income, assets, and, most importantly, credit scores. Your credit score is a predictor of your future payment performance and lenders pay close attention.

    If you plan to buy a home in Parkland or anywhere else in the next 12 months, spend some time with this The Today Show interview. It’s five minutes of practical credit scoring advice, including separation of credit score myth from credit score fact.

    Among the credit scoring tips shared :

    • How to get your credit checked without harming your credit score
    • The value of using automatic payments with credit cards
    • How to use “old” credit cards to boost your credit score

    You’ll also learn about utility companies and why you should never be late with a payment.

    As compared to August 2011, last month’s average, mortgage-financing home buyer’s FICO score improved 9 points to 750. The average “denied” mortgage applicant’s FICO score was 704. Clearly, standards are high. However, credit scoring is a system, and with time you can improve your rating.

    Watch the interview and find ways to make your credit score better. With better credit comes better mortgage rates.

    Click here to Search Parkland Homes

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  • Simple Tips To Keep Your FICO High

    Posted Under: General Area in Parkland, Home Buying in Parkland, Credit Score in Parkland  |  September 11, 2012 2:48 PM  |  186 views  |  No comments
    FICO recipeFor today’s home buyers and refinancing households, the value of “good credit” has never been higher.

    Mortgage approvals hinge on your FICO score, as does your final mortgage pricing.

    If you’re shopping for a home in Parkland or Coral Springs Florida , therefore, or contemplating a refinance, be aware of how everyday credit behaviors can affect your FICO. Even small events can make a big impact.

    Here are some common-sense steps to help improve your credit score.

    First, keep a “cushion” on your credit cards.

    30 percent of your credit score is linked to “Amount Owed” and a big part of Amount Owed is a raw calculation of (1) What you owe in dollar terms, against (2) How much credit you have at your disposal. The credit bureaus want to see at least 70% of your credit “available”.

    If you can keep your cards at least 70% available, your credit scores should improve.

    For example, if all of your credit cards give you access to a combined $50,000 and you are using $10,000 of that available credit, you have 80% of your credit available to you and this is “good”.

    Raise your balances to $30,000 and this is “bad”.

    Second, don’t make major purchases on credit prior to making a mortgage application. This includes opening a store charge card to save 10 percent or more on a washer/dryer set, for example; or for any other appliance or furniture piece.

    The reasons why are two-fold. One, store charge cards are often opened with a limit matching your initial charge, rendering them 100% utilized. This is bad for a FICO, as discussed above. And, two, opening a new charge card has a negative FICO impact anyway.

    Charge cards are associated with high default rates.

    Third, make all of your monthly payments on time — even the ones in dispute. You may not want to pay that $80 wireless phone bill, for example; the one that you think you owe, but remember that Payment History accounts for 35% of your credit score. Even one late payment — or payment in collection — and your credit score can drop.

    It’s often less expensive to pay a bill in dispute than to be relegated to a higher mortgage rate. The payment in dispute can be remedied today. The payment on that mortgage rate lasts for 30 years.

    Click here to Search Parkland Homes

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  • Mortgage Guidelines Resume Tightening Nationwide

    Posted Under: Home Buying in Parkland, Financing in Parkland, Credit Score in Parkland  |  May 1, 2012 6:46 AM  |  252 views  |  1 comment
    Senior Loan Officer SurveyDespite an improving U.S. economy, the nation’s banks remain cautious about what they will lend, and to whom.

    Last quarter, by a margin of 3-to-2, more banks tightened residential mortgage lending standards for “prime borrowers” than did loosen them.

    A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio. The insight comes from the Federal Reserve’s quarterly survey of its member banks.

    Last quarter, of the 54 responding banks :

    • 0 banks tightened mortgage guidelines considerably
    • 3 banks tightened mortgage guidelines somewhat
    • 49 banks left guidelines basically unchanged
    • 2 banks eased mortgage guidelines somewhat
    • 0 banks eased mortgage guidelines considerably

    By contrast, in the quarter prior, not a single surveyed bank reported tighter residential mortgage guidelines. The period from January-March was a step backwards, therefore, for the fledgling U.S. housing market.

    Overall, getting approved for a mortgage is tougher than it used to be. Banks enforce higher minimum credit score standards; ask for larger downpayment/equity positions; and require higher monthly income relative to monthly debt obligations.

    It’s one reason why the homeownership rate is at its lowest point since 1997.

    Another reason why homeownership rates may be down is that prospective home buyers believe the hurdles of today’s mortgage approval process may be impassably high. That’s untrue.

    There are many U.S. homeowners and renters — even here in Parkland — who were approved for a home loan last quarter — prime borrowers or otherwise. Some had excellent credit, some had modest credit. Some had high income, some had moderate income. Many, however, took advantage of low downpayment mortgage options such as the FHA’s 3.5% down payment program, and the VA’s 100% mortgage program for military veterans.

    Despite a general tightening in mortgage standards, loans are still available and banks remain eager to lend.

    It is harder to get approved today as compared to 5 years ago, but for those that try and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout Florida continue to push home affordability to all-time highs.

    If you’re in the market to buy a new a home or refinance one, your timing is excellent.

    Click here to Search Parkland Homes

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    View my listings at http://www.jonklein.com

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  • Are You Wasting $471 Per Month On Your Mortgage?

    Posted Under: Home Buying in Parkland, Financing in Parkland, Credit Score in Parkland  |  March 7, 2012 8:34 AM  |  196 views  |  No comments
    According to Freddie Mac’s weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.

    These are the lowest mortgage rates in history and now — with a bevy of loan programs for the nation’s 11 million “underwater homeowners” including HARP, the FHA Streamline Refinance, and the VA IRRRL — millions of U.S. homeowners can exploit the current mortgage rate environment.

    In this 4-minute clip from NBC’s The Today Show, you’ll learn about today’s mortgage market and your refinancing opportunities in South Florida.

    The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in “wasted savings” on the table each month which adds up to more than $5,600 annually.

    That’s a big number.

    Some of the video’s other key points include :

    • Refinancing is “worth the hassle” when mortgage rates are as low as they are today
    • The best rates are reserved for homeowners with the highest credit scores
    • Comparison shop — your current mortgage lender may not offer you the best rates

    Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.

    It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.

    Mortgage rates are low but can’t stay low forever. If you haven’t participated in the Refi Boom, talk with a loan officer and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs.

    Click here to Search Parkland Homes

    Click here to Search Coral Springs Homes

    Click here to Find Out What your Home is Worth

    View my listings at http://www.jonklein.com

    Click here to search all Parkland Homes for sale

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