Today's complaint (gee, that never happens) is about the modified First-Time Homebuyer Tax Credit which is part of the much besieged American Recovery and Reinvestment Act. Let me start of by saying I applaud the efforts by President Obama and Congress to get something to the American people that will help us get out of this economic crisis. The speed that this bill got passed is amazing considering the amount of money that it contained. I guess when you are a president and you are a Democrat, it sure helps when you are wanting to pass a bill that the majority of Congress are Democrats as well!
Now we can debate all day on what this stimulus bill contains is really going to help our economy. Experts on both sides can give you reasons why it will work or why it will fail. (does that make you feel uneasy? It does me.) I like the one comment by an economy expert who said this bill is like shooting a basketball and not knowing if you made the basket until 6 to 12 months later. How crazy is that?
But I think that most people, like myself, believe we have to do something because doing nothing will cause this recession to surely last longer than we want it to. I have to believe that there are some good things about the stimulus package as well as some bad things. So we have to live with that.
But the First-Time Homebuyers Tax Credit is both good and bad from my point of view.
Why is it good? Well first of all, it a great incentive for first time homebuyers, especially those sitting on the fence deciding if they should buy or not. (Hint: Buy, Buy, Buy!) What a nice thing to get: A credit up to $8000 after buying a house. Most first time homebuyers don't have a lot of cash to work with. So this credit will help with buying furniture, appliances, etc. Or maybe fixing up the house because most first time homebuyers are buying exactly that: a fixer upper. Or the most common payback, paying back mom & dad for lending them the money to buy the house in the first place.
And since I believe that the root of all evil in this recession started with the housing industry, any plan that can help boost home sales is fine by me. This new tax credit doesn't have to be paid back like the previous version and they have extended the tax credit program another 4 months.
So you ask "Dan, why are you having problems with this?".
Why limit this program to first time home owners? Why can't anyone who is buying a primary residence get this credit. Maybe someone selling their home at a loss because home values have gone down so much would feel better knowing that by buying a house they might be able recoup some of the losses on the sale of their house knowing they will get some of that lost money back when buying a new house.
And why limit it to $8000? Why not give the 10% to a buyer no matter what the sale price is? (I suppose you would have to limit it to a reasonable amount.) Isn't the idea here to get people to buy homes? And when buying homes, doesn't that reduce the inventory of homes for sale? And when the inventory of homes is reduced, doesn't that raise home values? And when home values are increased, doesn't that increase property taxes? And isn't better for government to collect taxes and have a surplus of cash instead of having to cut city services?
Do I have to go further?
It's all theory. I get that. But to me, whatever we need to do to kick start the housing market, we need to do. Because people need to be able to buy and sell homes when they want to. If they need to unload a house for whatever reason, that opportunity should be there.
We have seen what happens when it's not.
And now we are using the word "foreclosure" way too much now.
Let's slow down the usage.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
Friday, February 27, 2009
Wednesday, February 18, 2009
What's Your Score?
What is your credit score?
Most consumers don't know or don't want to know. But with loans harder to come by and lending guidelines getting more stricter everyday, it more important now than ever before to make sure your credit score is as high as it can be. The days where if you had a pulse, you got a loan are gone. That's the kind of lending that got us into this economic crisis in the first place.
Another reason that you need to stay on top of your credit score is that 70% of the information that is on a credit report is either wrong or old. Can you imagine that? You could be turned down for a loan based on inaccurate information.
This lending thing is hard enough for most people. Let's not make it harder. Let's review some credit report basics.
Credit scores range from 350 to 850. The credit scores are an indication of risk. The lower the scores, the more risk a lender will have. Remember, whether we like the system or not, the credit report is the only tool lenders have to see how historically you have paid back your creditors.
The scores come from the 3 credit bureaus, (Equifax, Experian and Trans Union) who gather up payment history from your creditors (Mastercard, Visa, car payments, etc.....) and use this information based on 40 different pieces of criteria and come up with a score. This "score" is used by lenders to determine your risk factor.
Let's look at what impacts your credit score.
Payment History - 35% Impact.
This one is pretty easy and makes the most sense. On time payments help your scores while late payments kill credit scores. And the more it is late or recent will impact scores even more. And if the late payment is for a good sum of money, that will lower your score as well. I know it is common sense, but making payments on time really helps your score. No matter what the amount of the payment is.
Outstanding Credit Balances - 30% Impact
Keep your balances no more than 30% of your credit limit. I know that is hard to do in this credit crazy world, but keeping those balances below the 30% mark really helps your credit score. When your balance is over 30% of your credit limit, your credit score really takes a beating. For instance, at 30-5o%, your credit score can lose 5 to 25 points. If your balance is 50-75% of your credit limit, it can cost you 20 to 40 points on your score. And if you have a balance on your credit card between 75 - 100% of the high limit, it can cost your credit score 40 or more points!! Ouch!!
So keep those balances down. Way down.
Credit History - 15% Impact
This is the length of time you have had open credit with a creditor. Credit scoring loves longevity and consistency. Your credit score likes to see you have the same cards for many years. It doesn't like to see you have one card for 12 months then close it, then open another one and close it after a short period......etc. You get the picture.
Anytime I see a credit score near the 800 mark (and I haven't seen too many), I know that that person with that score has had the same cards or mortgages for many years without making many changes. You may have card that you have had for a long time but haven't used. Before you close that card, you may want to consider keeping it open and using it once in awhile to keep your scores higher. It's a shame when people close out cards that they have had for many years.
The other bad thing about opening new credit it that it cause inquires from lenders who pull your credit report. This also impacts your credit score but more on that later.
Type of Credit - 10% Impact
This one doesn't carry a lot of weight. But your credit score likes to see a good mix of debt. It's not always possible to do so don't worry about it but a good mix would include a couple of revolving credit cards (Visa, Sears, etc....) an installment payment (car payment, boat payment, etc.....) and a mortgage. But don't go out and buy house just to get a mortgage payment!
Inquires In A 6 Month Period - 10% Impact
A hard inquiry (which is having your credit report pulled by a creditor at your request) can cost you between 2 -25 points. You only have 10 inquires that count against you, but keep them down anyway. Your credit score gets nervous when you try to get more credit. And remember, you don't take such a hit when your credit report is pulled by mortgage or auto companies. You have a little window of opportunity while trying to get the best deal on a mortgage or a car.
Keeping balances low, on time payments and consistency. It's a simple as that. That's the plan for getting the highest scores possible. And it doesn't matter how much money you make. You can be a millionaire with lousy credit but someone making $15,000 can have credit scores over 750. Just follow the game plan.
You are allowed one free credit report a year. It's important that you check it even if you don't intend on buying anything. 25% of the credit reports have errors serious enough to result in denial of credit. 79% have some mistakes. This is information about you that is out there and you want to make sure it is correct.
You can go to www.annualcreditreport.com for your free credit report. If you would like a report reviewing all the information in this blog, just sending me a note with your email address at dan@glmf.com and I will get it to you right away.
Now check that credit report!
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
Most consumers don't know or don't want to know. But with loans harder to come by and lending guidelines getting more stricter everyday, it more important now than ever before to make sure your credit score is as high as it can be. The days where if you had a pulse, you got a loan are gone. That's the kind of lending that got us into this economic crisis in the first place.
Another reason that you need to stay on top of your credit score is that 70% of the information that is on a credit report is either wrong or old. Can you imagine that? You could be turned down for a loan based on inaccurate information.
This lending thing is hard enough for most people. Let's not make it harder. Let's review some credit report basics.
Credit scores range from 350 to 850. The credit scores are an indication of risk. The lower the scores, the more risk a lender will have. Remember, whether we like the system or not, the credit report is the only tool lenders have to see how historically you have paid back your creditors.
The scores come from the 3 credit bureaus, (Equifax, Experian and Trans Union) who gather up payment history from your creditors (Mastercard, Visa, car payments, etc.....) and use this information based on 40 different pieces of criteria and come up with a score. This "score" is used by lenders to determine your risk factor.
Let's look at what impacts your credit score.
Payment History - 35% Impact.
This one is pretty easy and makes the most sense. On time payments help your scores while late payments kill credit scores. And the more it is late or recent will impact scores even more. And if the late payment is for a good sum of money, that will lower your score as well. I know it is common sense, but making payments on time really helps your score. No matter what the amount of the payment is.
Outstanding Credit Balances - 30% Impact
Keep your balances no more than 30% of your credit limit. I know that is hard to do in this credit crazy world, but keeping those balances below the 30% mark really helps your credit score. When your balance is over 30% of your credit limit, your credit score really takes a beating. For instance, at 30-5o%, your credit score can lose 5 to 25 points. If your balance is 50-75% of your credit limit, it can cost you 20 to 40 points on your score. And if you have a balance on your credit card between 75 - 100% of the high limit, it can cost your credit score 40 or more points!! Ouch!!
So keep those balances down. Way down.
Credit History - 15% Impact
This is the length of time you have had open credit with a creditor. Credit scoring loves longevity and consistency. Your credit score likes to see you have the same cards for many years. It doesn't like to see you have one card for 12 months then close it, then open another one and close it after a short period......etc. You get the picture.
Anytime I see a credit score near the 800 mark (and I haven't seen too many), I know that that person with that score has had the same cards or mortgages for many years without making many changes. You may have card that you have had for a long time but haven't used. Before you close that card, you may want to consider keeping it open and using it once in awhile to keep your scores higher. It's a shame when people close out cards that they have had for many years.
The other bad thing about opening new credit it that it cause inquires from lenders who pull your credit report. This also impacts your credit score but more on that later.
Type of Credit - 10% Impact
This one doesn't carry a lot of weight. But your credit score likes to see a good mix of debt. It's not always possible to do so don't worry about it but a good mix would include a couple of revolving credit cards (Visa, Sears, etc....) an installment payment (car payment, boat payment, etc.....) and a mortgage. But don't go out and buy house just to get a mortgage payment!
Inquires In A 6 Month Period - 10% Impact
A hard inquiry (which is having your credit report pulled by a creditor at your request) can cost you between 2 -25 points. You only have 10 inquires that count against you, but keep them down anyway. Your credit score gets nervous when you try to get more credit. And remember, you don't take such a hit when your credit report is pulled by mortgage or auto companies. You have a little window of opportunity while trying to get the best deal on a mortgage or a car.
Keeping balances low, on time payments and consistency. It's a simple as that. That's the plan for getting the highest scores possible. And it doesn't matter how much money you make. You can be a millionaire with lousy credit but someone making $15,000 can have credit scores over 750. Just follow the game plan.
You are allowed one free credit report a year. It's important that you check it even if you don't intend on buying anything. 25% of the credit reports have errors serious enough to result in denial of credit. 79% have some mistakes. This is information about you that is out there and you want to make sure it is correct.
You can go to www.annualcreditreport.com for your free credit report. If you would like a report reviewing all the information in this blog, just sending me a note with your email address at dan@glmf.com and I will get it to you right away.
Now check that credit report!
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
Wednesday, February 11, 2009
We're Waiting..........
Today the Congress agreed to spend billions of our tax dollars for us on programs that they deem necessary for our economic survival. (http://www.cnbc.com//id/29137238)
And in the meanwhile, the housing market is waiting to be addressed. And I don't mean just throwing some kind of lame program at it (IE: FHA Secure, Hope for Homeowners, etc..), I'm talking about something that will make a huge difference in home values and allow people to go back to normal everyday home business.
You know. Things like being able to sell a house or perhaps being able to refinance to get out of a high adjustable interest rate. Most people don't want help or money. They just want to be able to make wise choices when it come to their homes. Why does foreclosure have to be a business decision?
Believe me, I'm not knocking the current stimulus plan. I hope it works. I hope it creates jobs and loans and whatever else it supposed to do. I certainly am not an economics expert. But I do know one thing.
This mess started with the housing market and that's where we need to stop it. Passing this current package is like taking a shot with a basketball and then not knowing if you made the bucket for 6 to 12 months. We need help now.
I heard someone say on TV that with all the money we are spending on stimulus, we could pay off 90% of the existing mortgages that are out there. Can you imagine? Banks would get a whole bunch of money they could reinvest, homeowners would have more money to spend at the end of the month, home values would rise because of the halting of foreclosures and the demand for homes would be higher.
Too simple, huh? A mortgage guy can dream can't he?
I'm still waiting for a housing package that starts to put the brakes on this housing crisis.
Because if you don't kill the root, you'll still have to pull the weed.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
And in the meanwhile, the housing market is waiting to be addressed. And I don't mean just throwing some kind of lame program at it (IE: FHA Secure, Hope for Homeowners, etc..), I'm talking about something that will make a huge difference in home values and allow people to go back to normal everyday home business.
You know. Things like being able to sell a house or perhaps being able to refinance to get out of a high adjustable interest rate. Most people don't want help or money. They just want to be able to make wise choices when it come to their homes. Why does foreclosure have to be a business decision?
Believe me, I'm not knocking the current stimulus plan. I hope it works. I hope it creates jobs and loans and whatever else it supposed to do. I certainly am not an economics expert. But I do know one thing.
This mess started with the housing market and that's where we need to stop it. Passing this current package is like taking a shot with a basketball and then not knowing if you made the bucket for 6 to 12 months. We need help now.
I heard someone say on TV that with all the money we are spending on stimulus, we could pay off 90% of the existing mortgages that are out there. Can you imagine? Banks would get a whole bunch of money they could reinvest, homeowners would have more money to spend at the end of the month, home values would rise because of the halting of foreclosures and the demand for homes would be higher.
Too simple, huh? A mortgage guy can dream can't he?
I'm still waiting for a housing package that starts to put the brakes on this housing crisis.
Because if you don't kill the root, you'll still have to pull the weed.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
Wednesday, February 4, 2009
Even Mickey Is Cutting Back!
Howdy!
I just got back from 12 days in the Orlando area. It was cold the first few days we were there but the weather was much better than the ugly and miserable winter we had left in Michigan. It finally warmed up for the second half of the trip as the temperatures got up into the mid 70's. Anytime you can wear shorts and a tee shirt in January, it's a blessing. Of course, you can wear shorts and a tee shirt in January in Michigan, but you better be a polar bear or be extremely fast!
But I was able to play 3 rounds of golf (actually 6 rounds if you counted all the strokes!) and go to Disney World without having to put on gear you needed in the Artic Circle. Even 50F degree weather is cold to me in Florida. When I go to Florida, I want it hot, I want to sweat, I want sunburn. If I wanted to be cold, I could have stayed in Michigan.
When I complained to people in Michigan that it was only 50+ degrees when I was in Florida, well you can only imagine what I heard. People can be so touchy.
Back to Disney World.
You can plainly see why Disney World is the number 1 tourist attraction in the world. Everything is done there is first class. The place is clean and spotless. The cast members are so friendly and helpful. They have attractions there for kids of all ages. The pricing is more than worth it when you see what you get.
You can buy into the Magic or not. But it is hard not to. I do buy into it. And when I say buy into it, I really mean it as me and BF (Babyface) have season passes to Disneyworld. We bought a short term rental in Davenport (10 minutes west of Disney) a couple of years ago so we get down to the Orlando area 3-4 times a year to check on our place and vacation. So I have a vested interest in what's happening at Disney World.
So I was perplexed and curious at some subtle changes at Disney. For instance, at the Magic Kingdom, there is a ride called the "Haunted Mansion". This is a cool ride as you are driven through this mansion watching ghosts and goblins. It is normally dark on this ride which helps out in the scary department and also helps you to see the all the ghosts better.
However, it seemed a little too dark. It seemed more dark than I remember it. And it wasn't just me, a friend who was there with us made the same comment. We also noticed it was dark on the "Pirates of the Caribbean" ride, in the area where the cannons are being fired by the pirates. You couldn't tell who was shooting back because it was so dark.
We also noticed this "black out" at the "Dinosaur" ride at the Animal Kingdom park. And at Disney's Hollywood Studio's, "Fantasmic" which is a great show (BF's favorite!) with fireworks and these awesome water screens that have images projected on them, was being cut back from been shown every night to only 2 nights a week.
When we asked a Disney cast member about the cutbacks in the showing of "Fantasmic" we were giving the pre scripted corporate answer that the reason for the cut backs in the "Fantasmic" schedule was due to slower attendance. That answer was hard for us to accept as he was telling us this info while thousands of visitors to Disneyworld were walking by.
All these cutbacks now make sense after reading this article from CNBC:(http://www.cnbc.com//id/29011933)
The article interviews Robert Iger, the CEO of Disney. In one quote, Iger says "We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn." Which translated means that most of the businesses that Disney owns like everything else in the economy is tanking. So all the Disney businesses have to make cuts (including turning off lights) to save cuts to protect the empire.
It's really hard to believe that Disney is losing any money when you see all the Disney bags full of merchandise at every park. People are standing in line waiting to spend hundreds of dollars buying shirts, hats or other souvenirs that have Mickey's or Minnie's picture on them. I believe Disney wanted to, they could open a park just with stores! Can you imagine getting a Fastpass?
Like I always say, be good to Mickey and he'll be good to you.
I really don't know what that means but I like saying it.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
I just got back from 12 days in the Orlando area. It was cold the first few days we were there but the weather was much better than the ugly and miserable winter we had left in Michigan. It finally warmed up for the second half of the trip as the temperatures got up into the mid 70's. Anytime you can wear shorts and a tee shirt in January, it's a blessing. Of course, you can wear shorts and a tee shirt in January in Michigan, but you better be a polar bear or be extremely fast!
But I was able to play 3 rounds of golf (actually 6 rounds if you counted all the strokes!) and go to Disney World without having to put on gear you needed in the Artic Circle. Even 50F degree weather is cold to me in Florida. When I go to Florida, I want it hot, I want to sweat, I want sunburn. If I wanted to be cold, I could have stayed in Michigan.
When I complained to people in Michigan that it was only 50+ degrees when I was in Florida, well you can only imagine what I heard. People can be so touchy.
Back to Disney World.
You can plainly see why Disney World is the number 1 tourist attraction in the world. Everything is done there is first class. The place is clean and spotless. The cast members are so friendly and helpful. They have attractions there for kids of all ages. The pricing is more than worth it when you see what you get.
You can buy into the Magic or not. But it is hard not to. I do buy into it. And when I say buy into it, I really mean it as me and BF (Babyface) have season passes to Disneyworld. We bought a short term rental in Davenport (10 minutes west of Disney) a couple of years ago so we get down to the Orlando area 3-4 times a year to check on our place and vacation. So I have a vested interest in what's happening at Disney World.
So I was perplexed and curious at some subtle changes at Disney. For instance, at the Magic Kingdom, there is a ride called the "Haunted Mansion". This is a cool ride as you are driven through this mansion watching ghosts and goblins. It is normally dark on this ride which helps out in the scary department and also helps you to see the all the ghosts better.
However, it seemed a little too dark. It seemed more dark than I remember it. And it wasn't just me, a friend who was there with us made the same comment. We also noticed it was dark on the "Pirates of the Caribbean" ride, in the area where the cannons are being fired by the pirates. You couldn't tell who was shooting back because it was so dark.
We also noticed this "black out" at the "Dinosaur" ride at the Animal Kingdom park. And at Disney's Hollywood Studio's, "Fantasmic" which is a great show (BF's favorite!) with fireworks and these awesome water screens that have images projected on them, was being cut back from been shown every night to only 2 nights a week.
When we asked a Disney cast member about the cutbacks in the showing of "Fantasmic" we were giving the pre scripted corporate answer that the reason for the cut backs in the "Fantasmic" schedule was due to slower attendance. That answer was hard for us to accept as he was telling us this info while thousands of visitors to Disneyworld were walking by.
All these cutbacks now make sense after reading this article from CNBC:(http://www.cnbc.com//id/29011933)
The article interviews Robert Iger, the CEO of Disney. In one quote, Iger says "We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn." Which translated means that most of the businesses that Disney owns like everything else in the economy is tanking. So all the Disney businesses have to make cuts (including turning off lights) to save cuts to protect the empire.
It's really hard to believe that Disney is losing any money when you see all the Disney bags full of merchandise at every park. People are standing in line waiting to spend hundreds of dollars buying shirts, hats or other souvenirs that have Mickey's or Minnie's picture on them. I believe Disney wanted to, they could open a park just with stores! Can you imagine getting a Fastpass?
Like I always say, be good to Mickey and he'll be good to you.
I really don't know what that means but I like saying it.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
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