It used to be we could do a loan for anyone with a credit score of 500 or more. Currently the minimum required credit score for Merrimack Mortgage Company is 620. Most of the other mortgage companies in our area are also requiring a minimum score of 620 -- or higher! That's right some have already gone to a minimum of 640!
Rumor on the street is that a 640 minimum is just around the corner and will soon be the standard.
As it turns out, at least 50% of the people who inquire (at our branch) into a first time homebuyer loan do not currently meet the 620 minimum score. We have dozens of people/couples we are coaching to help them raise their scores to the minimum of 620. We have issued preapprovals to dozens more who have credit scores between 620 and 640. So if the minimum score goes up to 640, all of these files will need to be reworked.
The good news is that everyone can have a good score with a little work! So if you are below 620 (or even 640), do the things you need to do to get your score where it needs to be. Here are some helpful hints:
1) You should have a minimum of 3 open and good trade lines. If you don't then apply for credit now and get those 3 minimum tradelines on yoru report.
2) You should have no late payments on anything in the past 12 months. Been late recently? Do what you can to pay on time each and every month!
3) Keep your balances on credit cards close to 50% (or less) of the credit limit. That's how you get a better score. People who are maxed out have lower scores.
4) Do not open any new accounts -- unless you have less than three tradelines.
5) Do not close any accounts -- unless you have way too many. Try to close newer accounts in this case and keep older accounts open. The longer the account has been open, the higher your score is!
6) Pay off all non-medical collection debt, past due amounts, judgements, etc.
7) For medical payments, be sure to negotiate unpaid balances to a zero balance or make payment arrangements. You can't just leave outstanding balances hanging out there. You need to work with the providers so you don't have medical collections on your report. These drive the score down.
8) Contact the Amazing Loan Ladies at www.NHmortgages.com for more help with your credit report if you are in NH, Mass or Maine.
Saturday, November 21, 2009
Wednesday, November 18, 2009
Homebuyer Tax Credit Extended
Good News for homebuyers -- first time buyers and second time buyers too! On November 6th, 2009, Obama signed a bill that provides a significant tax credit for qualified folks who put a house under contract by April 30, 2010.
First Time Buyer Rules: A first time buyer is a buyer who has not owned a primary residence in the last 36 months. If the buyer is married, then his/her spouse cannot have owned a house in the last 36 months. If either spouse has owned a house in the past 36 months then both are ineligible. To get the max tax credit, there is an income limit of $125,000 for single filers and $225,000 for joint filers. Max tax credit is $8,000 or 10% of the sales price, whichever is lower. Single filers with incomes over $125,000 but below $145,000 or eligible for a partial tax credit. Joint filers over $225,000 but below $245,000 are also eligible for a partial tax credit. Sales agreements must be written by 4/30/10 and closed by 6/30/10. If the buyer owns and lives in the house as their primary residence for a minimum of 36 months, then no repayment of the tax credit is required.
Second Time Buyer Rules: To get the max tax credit, there is an income limit of $125,000 for single filers and $225,000 for joint filers are. Max tax credit is $6,500 or 10% of the sales price, whichever is lower. Single filers with incomes over $125,000 but below $145,000 or eligible for a partial tax credit. Joint filers over $225,000 but below $245,000 are also eligible for a partial tax credit. Sales agreements must be written by 4/30/10 and closed by 6/30/10. Must have owned and lived in the house being sold for a minimum of 5 years or have lived in the house for 5 consecutive years within the past 8 years. If the buyer owns and lives in the house as their primary residence for a minimum of 36 months, then no repayment of the tax credit is required. The maximum sales price is $800,000; if the purchase price is higher than $800,000 then the buyer is not eligible for a tax credit.
Restrictions: You cannot purchase a home from a close relative including a spouse, parent, grandparent, child or grandchild. Get Started Now: If you are buying in NH, contact Renee Duval or Carol Jordan. If you are buying in Maine or Mass, contact Carol Jordan to get preapproved for a mortgage loan now. Call (603) 225-LOAN (5626). Or e-mail AmazingLoans@NHmortgages.com
First Time Buyer Rules: A first time buyer is a buyer who has not owned a primary residence in the last 36 months. If the buyer is married, then his/her spouse cannot have owned a house in the last 36 months. If either spouse has owned a house in the past 36 months then both are ineligible. To get the max tax credit, there is an income limit of $125,000 for single filers and $225,000 for joint filers. Max tax credit is $8,000 or 10% of the sales price, whichever is lower. Single filers with incomes over $125,000 but below $145,000 or eligible for a partial tax credit. Joint filers over $225,000 but below $245,000 are also eligible for a partial tax credit. Sales agreements must be written by 4/30/10 and closed by 6/30/10. If the buyer owns and lives in the house as their primary residence for a minimum of 36 months, then no repayment of the tax credit is required.
Second Time Buyer Rules: To get the max tax credit, there is an income limit of $125,000 for single filers and $225,000 for joint filers are. Max tax credit is $6,500 or 10% of the sales price, whichever is lower. Single filers with incomes over $125,000 but below $145,000 or eligible for a partial tax credit. Joint filers over $225,000 but below $245,000 are also eligible for a partial tax credit. Sales agreements must be written by 4/30/10 and closed by 6/30/10. Must have owned and lived in the house being sold for a minimum of 5 years or have lived in the house for 5 consecutive years within the past 8 years. If the buyer owns and lives in the house as their primary residence for a minimum of 36 months, then no repayment of the tax credit is required. The maximum sales price is $800,000; if the purchase price is higher than $800,000 then the buyer is not eligible for a tax credit.
Restrictions: You cannot purchase a home from a close relative including a spouse, parent, grandparent, child or grandchild. Get Started Now: If you are buying in NH, contact Renee Duval or Carol Jordan. If you are buying in Maine or Mass, contact Carol Jordan to get preapproved for a mortgage loan now. Call (603) 225-LOAN (5626). Or e-mail AmazingLoans@NHmortgages.com
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