Credit Score Pointers

Your credit score is crucial to buying a home or getting a loan for anything you want. It determines how much of a loan you can recieve and how high your payments will be. A lower interest rate means a lower payment or more home. There are ways to repair your credit, but the most important thing is to know what raises your credit score and what lowers it. Below are some pointers on how the rate your credit.
Payment History: 35%
The single most important thing you can do is the simplest: Pay your bills ontime. This is critical. The credit score is to determine the likelihood that a 30-day late will happen over the next 24 hour period. That is why so much of your credit score is weighted against your history.
How much you owe: 30%
The next biggest chunk of the score is based on how much you owe. The simple solution: Pay down your credit cards and other installement loans (Below 50% is the key). 3 trade lines open is ideal. More will not hurt if the balances are below 50% of the limit in each.
Length of credit history: 15%
This one you cannot really speed up. Lenders want to see your track record of timely payments. Even if you have had credit for a long time, a lot of newer account opened will hurt your score.
New Credit: 10%
Opening up alot of accounts at one time can also hurt your score. You may also hurt your score if you're constantly changing cards and chasing a lower rate. But this only accounts for 10% of your score.
Types of Credit: 10%
Lenders like to see how you handle all types of credit-credit cards, mortgages, car loan, student loan, etc. Finance Companies(i.e. RC Willeys, Home Depot etc.) are not recommended, due to the high finance charges, and the likelihood you will be maxed out on those accounts. Close those type of accounts

My Story

One of my previous blogs told you the importance of looking at contractors previous work in order to save yourself a ton of time and hassle. Now these pictures below were done by a licensenced contractor. (FYI - did you know that an unlicensed contractor has no rights on pursuing payment from you) We unfortunately had a situation where the contractor told me he was buying a home so I paid him after it was done and planned on balancing it out by the commission I would receive by the Sellers on the home he purchased. Then getting it re done by someone I trusted. He ended up having some employees steal some of his rented equipment which caused liens to go on him and stopped any home buying process at the time. A risk I took that ended up with me not on top!!

This is our "Beautiful" stamped concrete patio that I was having put out front. It is a disaster!!

Home Equity Lines

Why are home equity lines so popular? The only useful type of home equity line is when the client is doing an 80/20 loan where they don't want to pay the MIP or PMI on their mortgage. Or for investment purposes. Taking out home equities to buy boats, even something like finishing your basement. One is so much better off saving their money and then using it towards their WANTS then taking out more credit, especially on your home. I have seen quite a rise in foreclosures due to people taking out home equity lines to improve their home and then end up spending it on a RV or Boat instead. One of the best feelings of freedom one could achieve is total financial freedom. Start with the high bills, biggest interest rates and amounts and start paying that down. A budget is a huge thing to recieve financial freedom, budget then stick to it. Once you paid down that first high bill take the payment you were doing on that bill and transfer it to the other bill so you can pay it off faster. Continue until you only owe on your mortgage. Then take those and continue, one should be able to have their mortgage paid off in 15 years if they pay off all other bills and didn't buy a home above their means.

Home of the Month

SOLD

Great Home in South Jordan, 3213 sq ft, .30 acres, with Bonus Room upstairs. Congratulations Jack and Rita

Homeowners Insurance

Multiple hurricanes along the East and Gulf coasts over the past few years have left more than debris in their wake. One ripple effect that's slamming coastal residents is double-digit increases in their once-stable homeowner's insurance rates.
From Florida to Massachusetts, many coastal homeowners have seen their insurance rates climb by 20% or more. "Someone in Ohio who's moving to coastal South Carolina should expect to pay more for insurance than what they're paying now," says agent Wendell Sutton, of Kinghorn Insurance Services, in Hilton Head, S.C.
In many cases, insurance companies are not renewing policies. Dennis Slattery, 60, a 19-year resident of Hernando Beach, Fla., lives in a house on the beach. He recently learned that his carrier was dropping his coverage because of "catastrophic risk management" – in other words, the risk from future hurricanes. Many other Floridians, he notes, are facing rate increases that they can't afford. "People are worried, and some are thinking of moving," Slattery says.
Insurance companies are raising rates and dropping coverage in an attempt to reduce their risk exposure. "The old view was that we would have a bad hurricane every few years," says Robert Klein, director of the Center for Risk Management and Insurance Research at Georgia State University. "The tone of insurers started changing after the fourth hurricane hit in '04."
Not ready to give up the surf? There are some ways you can reduce your insurance costs.
Shop Around"You can easily pay twice as much from one company to another," says Robert Hunter, director of insurance for the Consumer Federation of America. Compare rates of two or more carriers.
Most state insurance commission websites offer price information, a list of the state's leading insurers, and buyers' guides. Visit www.insureuonline.org to find links to each state commission.
If your coverage has been dropped, you can learn about "last resort" options at the commission sites. Most states have insurance pools for coastal residents who can't get coverage, but be prepared to pay higher rates than other residents who still qualify in the private market. For example, those in Louisiana's last-resort option, called Louisiana Citizens Property Insurance Corp., pay premiums that must be 10% above the average of the top ten writers in the parish they reside in. "By law it's more expensive than the private sector," says Jim Donelon, Louisiana insurance commissioner.
Keep Coverage Up to DateIf you've fixed up your house or property, tell your carrier; maintaining your home will reduce your liability. Also, don't overinsure. Madelyn Flannagan, a vice-president of the Independent Insurance Agents and Brokers of America, notes that "homeowners just need to insure the cost to replace the house."
Seek DiscountsImprovements for safety, such as installing windows that can survive winds of 150 to 180 miles per hour, could cut your premium. Ask for a senior discount or for a longevity discount if you're a longtime client. Cobbling together several discounts could offset any increases in your premium. Also, you could save money if you buy your homeowner's, auto, and other coverage from the same insurer.
Adjust Out-of-Pocket Costs"Play with your deductible," says agent Kathy McKay, of McKay Stelling & Associates, which serves Charleston, S.C. Raising your deductible from $250 to $1,000 might save you 10% to 15% on your premium.
In many coastal areas, you may need a separate policy for wind and hail. And flood insurance is a must, insurance experts say. You can purchase flood insurance through the federal subsidized program, and you can buy extra coverage from private insurers.
Reprinted with permission. All contents © 2007 The Kiplinger Washington Editors, Inc