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How do you qualify for a 3% down payment conventional loans?

Did you know that Fannie Mae® and Freddie Mac both have 3% down payment programs!

Here is a short video which explains the differences and along with the highlights.

Remember, conventional loan 3% down payment programs can be a great alternative to FHA financing, because as of 6/3/13 FHA monthly mortgage insurance is now for the life of the loan in cases of less than 10% down payment.

Real Estate Marketing Tips: Should You Join A Social Group?

Should you join a social group?

There has always been some debate over whether or not social media is really a viable way to generate awareness of brands or services. In fact, one of the most common statements I have heard goes something like this:

 

“Social media doesn’t generate leads; I’ve never once gotten a deal from posting on Facebook or LinkedIn.”

 

On a superficial level, that may seem true. More often than not, individuals who like, follow, or re-tweet you do not reach out directly on Facebook or other platforms to conduct business. However, maintaining a solid social media presence is often one of the first ways a potential customer may come in contact with your brand.

In fact, it could very well be the start of your sales funnel (a.k.a customer acquisition model). If a person has been exposed to you via social media, at the very least they have an awareness of you and what you offer, and if they have liked your page, or are following you, they may very be considering using services like yours in the future.

 

The question then is, “How do you get these prospective customers to not only be aware of you, but to be interested in you and choose your business over another?

 

You guessed it, by joining social media groups.

 

On average, individuals in the United States are exposed to over 500 advertisements a day. I think it’s safe to assume nobody really wants to be sold to at this point.

 

Social media groups offer you the opportunity to meet potential customers on their terms and give you the ability to connect with them on a personal level. By doing this, you can learn all about their interests and how you can cater your business towards their needs.

 

 

Now, you may be thinking, okay, that’s great…but how do I know which groups to join?

 

To figure that out, I would like to direct you to Facebook’s “Graph Search” tool.

*Please note: In order to use this tool, you can NOT be logged into a Facebook Business Page*

 

The Facebook Graph Search in an excellent way too not only find trending interests, but to specifically target those who have liked your Facebook page (people who are in the awareness stage of the sales funnel). By typing into the search bar, “Groups of people who like your facebook page” you’ll be taken to a page that shows every group that is associated with people who have liked your business page.

Now that you can see the groups that these potential leads are in, you can begin to personalize your postings and join in on the group conversation. Be sure that you take this opportunity to really present yourself as an expert and offer helpful advice, even if it isn’t always about your services.

 

By building this kind of repertoire, not only are you furthering your prospect’s awareness of your services, but you’re also giving them a reason to be intrigued and maybe even attached to you and your services, moving them to the next part of the sales funnel.

 

We’ve covered quite a lot today, and before we continue, I’d like to ask you to try out Facebook’s Graph Search to really gain a better understanding of what your Facebook fans, and other potential customers are really interested in.

 

Next week I’ll pick up where we left off, and discuss how you can get your social leads to take action through group engagement.

 

By the way, if you have any new pre-qualifications or existing transactions which are in need of assistance, just call or email so we can review and show you the Metroplex difference!

 

And one more thing: don’t forget to join our LinkedIn Group, USDA Real Estate Network, which is now open to both Realtors and HomeBuyers. Joining this group will not only give you the opportunity to network and discuss USDA related scenarios, but also the ability to post your available listings.

 

Remember, social groups are great ways to build brands and generate partners and customers!

What To Do When A Buyer Is Looking At A Property On A Private Road

What should you do if your client wants to look at property on a private road?

This week’s highlighted loan scenario will walk you through the steps on how to navigate this type of situation.

Step 1. It is always a good idea to confirm with your local county roads & bridges department the exact type of road classification. Just because it may be a dirt road, don’t assume that is also considered private. Many counties have different classifications of road types and it is always best to make the call and double check.

Step 2. Now that you have confirmed it is a private road, communication is key and be certain to tell the lender, bank, or broker handling the mortgage that the property is located on a private road.

Step 3. From the legal perspective, your title company or attorney handling the loan closing can help with the following:

A. Determine if there are recorded easements such as one allowing right of way onto the property. Here is
a definition of an Easement from Wikipedia
B. A recorded private road maintenance agreement may be required depending on the type of mortgage
(Conventional, FHA, VA, or USDA).
A. Here is a tip on conventional loans, Fannie Mae will require a private road maintenance agreement, but
Freddie Mac guidelines does not. Check with your lender if they are have ability to work with Freddie
programs.
B. VA Loans will also require a recorded maintenance agreement
C. FHA does not have this requirement
D. USDA loans also do not have this requirement, but they have specific guidelines regarding the type of
road which must be considered an all weather surface roadway.

As we all know, different factors can evolve on each transaction, but this will give you a great start to staying organized with the steps needed to complete a successful transaction when the buyer is trying to buy a home located on a private road.

Part Three: How Your Credit Score Affects Mortgage Qualifying

Series finale: How your credit score affects morgage qualifying.

Last week we talked about how the amounts you owe on a credit account can impact your credit score and affect mortgage qualifying. Today, we will wrap up our 3 part credit series by reviewing the last calculating factors of your credit score.

Before we begin, I just wanted to let everyone know that I have started a new Linked In Group titled USDA Real Estate Network. This group was designed as a way for Buyers and Real Estate Professionals to network, connect, and share ideas. It also provides a way to stay in the loop on mortgage and real estate trends along with the latest updates on USDA Home Loans. If you would like to join, it is free! Just Click Here to sign up!

Alright then, now let’s get started with the details!

The 3 remaining factors that go into establishing your credit score and determining your mortgage rates are:

  1. The length of your credit history (15%)
  2. The types of credit in use (10%), and
  3. Any new credit accounts

Typically, a longer credit history adds strength to your credit profile, but you can still have a good credit scores even without established credit for very long, depending on how other parts of your credit score calculate. When examining this part of your score, the following are taken into consideration:

–       How long your credit accounts have been established (from your oldest account to the newest)

–       How long specific accounts have been established

–       How long it’s been since you’ve used certain accounts

The next determining element of your score is the type of credit in use. The score received here will depend on the assortment of accounts you currently have. This includes credit cards, retail accounts, installment loans, and so on.

Having multiple credit accounts with a good payment history is one way in which you can strengthen your score. If you’re able to manage multiple credit lines in a responsible manner, this is always considered a plus.

In the event that you haven’t necessarily managed your accounts correctly, closing an account WILL NOT make it go away. The closed account previous negative information will still show up on your credit report, and remember by closing an account you are also removing potential available credit which helps your score in the case of a credit card.

Finally, any new credit accounts will be examined when calculating your credit score. When considering whether or not to open an account, keep this in mind:

“Research has shown that opening several credit accounts in a short period of time represents a greater risk-especially for people who don’t have a long credit history.”

For any additional information on the FICO Scoring Model please visit: www.MyFICO.com

Does What I Owe On An Account Affect My Credit Score Or Mortgage Rates?

Does what I owe on my account affect my credit score or mortgage rates?

Last week, we discussed how your payment history affects your credit score. For our second part of our credit score series, we’ll be reviewing 6 critical aspects of the “Amounts Owed” portion of your credit score.

The amounts owed portion of your credit score equals 30% of your credit score breakdown. As I mentioned previously, owing money will not necessarily put your credit score in the red.

Here are a few factors that are taken into account when determining whether the amount you owe will be detrimental to your score:

1. The amounts you owe on all accounts:

  • It is important to note, that even if you have consistently paid off your credit cards, your credit report may actually show a balance on your cards.
  • You can usually assume that total balance on your last statement will be the amount that shows on your report.

2. The amounts you owe on different types of accounts:

  •  Alongside of the overall amount you owe, your credit score will take into consideration the amounts you may owe on specific accounts such as credit cards or installment loans

3. How many accounts have balances:

  • If you have a large number of accounts with amounts owed, this can indicated a much higher risk of over extension.

4. Whether you’re showing an amount owed on certain accounts:

  • Sometimes, having a small balance with consistent payments can be better than having no balance at all. This shows that you are able to manage your credit responsibly and are      likely to make your payments on time.

5. How much of the total credit on an account is being used:

  • If your are close to maxing out a credit card or several credit cards, it often makes it seem as though you may have trouble making future payments

6. How much of an installment loan you still owe

  • Paying down installment loans is a good sigh that you’re able and willing to manage and repay debt. If you still owe a significant amount on such a loan, it may hinder your credit score.

Again, amounts owed only takes up 30% of your overall credit score and is not necessarily a game changer. When you are preparing to purchase a home and have credit questions regarding either accounts owed or any other part of the credit score equation, you should always check in with your mortgage professional for minimum credit requirements to determine the best way to proceed with financing options.

For any additional information on the FICO Scoring Model please visit: www.MyFICO.com

How will my credit payment history affect my mortgage rate and qualification?

Does credit payment history affect my mortgage rates and qualifications?

When it comes to knowing how your credit score is determined for mortgage qualifying, there is often a great deal of confusion. In order to help shed some much needed light on this topic, I have broken down the content into 3 part video series which will help explain this often-overwhelming part of the process.

Today’s’ video tip  will review the single largest determining factor in your credit score: your payment history.

Please remember that a certain credit score does not guarantee loan approval. Credit scores should not be looked at as the final judge and jury, but instead can be viewed as a gatekeeper for potential loan programs that may be available.

Your overall payment history which equals 35% of the credit score break-down holds the most weight when calculating your credit score. As you can imagine, having on time payments is not only key with your credit score, but also critical when attempting to qualify for a mortgage.

When examining late payments, each of the following is considered:

  • How late your payments were
  • How much you owed
  • How recently they occurred
  • How many you have

If you are aware of a few late payments, don’t panic! If the overall picture painted by your payment history shows that you have paid the majority of your payments on time, this can outweigh one or two late payments.

Please note, having perfect payment history does not necessarily mean a perfect score. It’s important to remember that payment history is only one part of the scoring process.

Keep in mind; there are a few different credit accounts that may be examined for payment history outside of your typical credit cards (Visa, MasterCard, American Express, Discover, etc.) These accounts can consist of:

  • Retail Accounts such as a department store credit cards
  • Installment loans where you have established regular payments such as car payments or furniture loans.
  • Finance company accounts, and
  • Mortgage loans or lines of credit

Collection items and those on public record are also examined, which include but are not limited to the following:

  • Judgments
  • Past due child support
  • Tax Liens
  • Charge-Offs
  • Collections (Remember that while underwriting guidelines may permit flexibility with medical collections, the current credit scoring model does not differentiate between types of collection accounts.)
  • Foreclosures, and
  • Bankruptcies which have different types such as a:

o   Chapter 13 bankruptcy which remains on your credit for 7 year, while

o   Chapter 7 & 11 will report for 10 years

For additional information on the FICO Scoring Model please visit: www.MyFICO.com

When preparing to purchase a home and you have credit questions, it is always advisable to check with your mortgage professional for minimum credit requirements and to determine the best way to proceed with financing options.

 

What Not “To-Do” During The Mortgage Process

Last week we discussed what you should do during the mortgage process, and now I wanted to follow up with advice of what “Not To-Do” so you can keep your financing headed in the right direction.

First off, do not apply for new credit of any kind:

It can be common to receive invitations for credit cards, furniture, TV, appliances, and the list goes on and on. Simply do NOT respond to these offers, as the additional inquires can actually end up lowering your credit score. Even those which offer “no payments for six months” , because this would still be considered opening a new account and have the same impact.

Do not pay off collections or Charge-offs:

This may sound like the complete opposite of what you should do, but whenever you make a payment on a negative account, it actually updates the most recent activity which can turn an old collection into a new problem. While, sometimes paying off negative accounts may be a requirement of loan approval, that would be after you are approved and moving forward in the process. Obviously, every situation is different and requires individual advice so be sure to consult with your mortgage professional for proper guidance.

Do not increase credit card balances, max out, or overcharge lines of credit:

Increasing credit card balances is one of the fastest ways to bring your credit score down. During the qualifying process, be sure try to keep your cards well below the available credit limit at all times.

Do not close out credit card accounts:

If you close out a credit card account, it can affect your ratio of debt to available credit, thus affecting your credit score. If you really want to close an account, do so after your loan closes.

Do not raise red flags to the underwriter:

This means don’t co-sign another person’s loan, change employment, or change your name or address. Less is more when it comes to processing loans, so keep activity to a minimum.

Do not make unexplained deposits into your bank accounts:

Underwriting is very strict on verifying any and all deposits, no matter what the amount. Be prepared to verify the source of your deposits, in particular those tough to verify cash deposits.

What Should You Do During The Mortgage Application Process?

What steps should you take during the mortgage application process?

When you’re going through the home buying process, how do you know what’s misinformation and what’s not? With everything available, it’s sometimes hard to separate what is right and wrong during the mortgage application process.

This short video tip will go over what TO DO in order to keep you and your dream of homeownership on the right track.

First off, make sure to stay current on your existing accounts:

If there are late payments on your existing mortgage, car payment or any other item which reports to the credit bureaus, it could dramatically drop your credit score, and eliminate your ability to purchase a home.

Just one 30-day late payment has the ability to drastically reduce your credit score very quickly.

Second, keep an eye on your credit cards balances:

It is very important to make sure that your credit cart balance is low in comparison to your credit card limit. Note that it isn’t the balance that counts, but instead the ratio of your balance in comparison to your credit limit.

Having credit cards that are at or near their limit is a formula that can damage your credit score.

Third, be sure to follow up with your insurance carrier after any medical treatment:

Way too often I see a small collection that was as a result of miscommunication between the insurance company, doctor’s office, and the patient. This can rapidly decrease credit scores and in some cases be a reason for loan denial.

Next, remember to pay your rent via check:

Paying by check is a clear documented source of verification when needed. Remember that while paying by cash or money order may seem convenient, it will not be a readily accepted form of verification by underwriting.

And finally, always ask your mortgage lender for advice:

Your mortgage lender is the best resource for details about what actions help or hinder
your loan approval. If you have any questions or concerns about a financial event you are considering during the loan process, ask your mortgage lender PRIOR to taking action. We are here to help you navigate the process and make it as smooth as possible.

Be sure to stay tuned next week for what NOT to do during this process!

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We lend in the following states: Alabama, Florida, Tennessee & Texas. Any loan program may require sufficient equity and certain conditions may apply.
As a VA Approved lender, we are not endorsed or affiliated with the Department of Veteran Affairs. As a USDA Approved lender, we are not endorsed or affiliated by the U.S. Department of Agriculture.