RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Credit Scores Nationwide Make the Grade

November 23, 2015 1:09 am

Confidence abounds nationwide as the country moves toward a more balanced economy, with the overall national credit score registering higher in the last year, according to the Experian® State of Credit study.

“If I were to give a grade to the overall picture of credit in the United States, I would give it an A minus,” says Michele Raneri, vice president of analytics and new business development at Experian. “I’m optimistic about the state of credit as we are seeing more loans being extended, late payments are decreasing and consumers are continuing to gain more confidence in originating loans. There definitely is growth and momentum—we’re back to prerecession levels in nearly every category, which means lenders are in a prime position to capitalize on this market and foster business growth.”

Per the study, the national VantageScore® credit score moved up by three points in the last year, from 666 to 669. Instances of late payments, including bank card and retail, decreased by 4.4 percent in the last year and 17.3 percent since the height of the recession in 2010. Average debt is up 2.1 percent to $29,093 per consumer.

“Knowing where you stand from a credit perspective is critical to improving or maintaining your financial well-being. Everyone should understand the value of having positive credit references,” says Rod Griffin, Experian’s director of public education. “Reports like this one provide an avenue to build awareness and help consumers across the nation think about how they can make positive changes in how they manage credit.”

Source: Experian

Published with permission from RISMedia.


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Turned Down for a Mortgage? Read This before Reapplying

November 23, 2015 1:09 am

Turned down for a mortgage? You’re not alone. Many borrowers are finding it difficult to navigate lending requirements and reapply for a loan to buy a home, despite significant improvement in the housing market.

If your mortgage application was rejected, take heart. Mike Sullivan, director of education for Take Charge America, a national nonprofit credit and housing counseling agency, says prospective homebuyers can successfully reapply if they consider the following factors:

Cash Flow – One of the primary roadblocks to obtaining a mortgage is cash flow. At a minimum, borrowers need a 3-percent down payment and about $1,500 for closing costs. They must also take moving and ongoing maintenance costs into account, including utility deposits, appliances, a lawn mower, curtains and other miscellaneous expenses. As a general rule, prospective homebuyers should have at least $10,000 saved before shopping for a home.

Credit – Many young people today haven’t used credit, aside from student loans, so lenders have difficulty assessing their ability to pay back the home loan. Borrowers who fall into this bucket need to focus on building a positive credit history with three trade lines, such as a credit card, auto loan and signature loan, for at least two years before attempting to reapply.

Lifestyle – Many consumers assume if they can qualify for a loan, they can afford a house. With lenders approving 31 percent of gross salary for a house payment and 43 percent for all debt service, it’s easy to buy a house one can’t afford. It’s important to remember the mortgage is only part of the financial picture. Ongoing costs such as commuting, utilities, HOA fees, landscaping and general home maintenance need to be seriously considered, as well. It’s wise to limit house payments to 28 percent of gross income, and all debt service to no more than 34 percent.

“Many individuals and families are ready to pursue their dreams of homeownership after overcoming financial struggles, but they don’t always have a clear picture of what it takes, or how a mortgage could impact their long-term financial picture,” says Sullivan. “The more knowledge they obtain before entering the lending process, the better.”

Source: Take Charge America

Published with permission from RISMedia.


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