There is no shortage of myths when it comes to credit scores. Even with all the buzz about credit scores today, a surprisingly high percentage of people don’t understand this one basic principle: a credit score measures creditworthiness.

When it comes to your credit, what you don’t know can hurt you. Let’s take a look at ten myths and separate fact from fiction.

Myth #1: Checking your own credit report will hurt your score.
There is absolutely no truth to this statement. Ordering your own credit report counts as a “soft inquiry.” Creditors do not see soft inquiries, nor are they factored into your credit score.

Myth #2: There is only one credit score.
The truth is there are hundreds of scoring models in use today and different score ranges, too. One lender might even use a different scoring model for each type of loan it offers. Generally, if you score well on one scoring model, you should score well on another.

Myth #3: Closing accounts will improve your credit score.
This is outdated advice! We now know two good reasons not to close accounts, especially older accounts. When you close an account, it raises the ratio of your debt to your available credit—a negative thing and one of the key factors considered in most credit scoring models. Closing an older account can also shorten your credit history.

Myth #4: Credit scores are locked in for six months (or 90 days, or a year…)
Credit scores are based on the information in your credit report. And since the information in your credit report is always changing, so is your credit score.

Myth #5: Co-signing for a loan will not affect your credit score.
Whenever you co-sign for a loan, you are accepting full responsibility for the loan. Details of the account will probably appear on both individual’s credit reports and therefore be factored into both individual’s credit scores.

Myth #6: You can dispute negative information to have it removed.
Generally, negative information will remain on your file for seven years from the date of delinquency. Bankruptcies may remain for ten years and tax liens may remain seven years from the date they are paid. There is no legal way to remove accurate negative information sooner (unless you have a sympathetic creditor), though some unscrupulous credit repair companies may tell you otherwise.

Myth #7: You have only one credit score.
Wrong! You have three scores, one based on your credit report from each of the three bureaus (Experian, TransUnion, and Equifax). Because all creditors don’t report to all three bureaus, your credit file may be different at each bureau.

Myth #8: My spouse’s credit will help (or hurt) my credit score.
The reality is credit reports are kept on individuals—not on couples. Your credit score is based on what is in your credit report only. There are no “joint” credit reports or credit scores.

Myth #9: Shopping for the best credit rate will hurt my credit score.
While it is true that too many inquiries can raise a red flag that you are going on a credit binge, most credit score models can recognize when you are rate shopping for a mortgage or auto loan and will count it as a single inquiry and have minimal if no impact on your score.

Myth #10: Credit counseling is as bad or worse than filing for bankruptcy.
While credit counseling may alert potential lenders of a credit concern, most lenders look at the bigger picture. Some even see consumer counseling as a positive sign of a commitment to making lasting changes in your credit habits. Bankruptcy, on the other hand, should be avoided if at all possible.

If you are looking to purchase a home in the Basking Ridge or surrounding areas and would like some information or help buying a home, text, email or call my cell at 201 259-4449.

Congress and the House voted to extend the first time homebuyer's $8,000 tax credit and they expanded the earnings limitations from: $75,000 (single) and $125,000 (married) $20,000 phase out. to $125,000 (single) and  $225,000 (married) witha $20,000 phase out.

They did add a cap this time around on the cost of the house to $800,000. (not great for those of us wanting to live in the NY, NJ and Ct. areas where homes are pricey but you can't have everything.

They also added a $6500 (married) and $3250 (single) tax credit if you have previously owned a home and that home being sold must have been used as a primary residence for the last 5 out of 8 years.

A binding contract to purchase must be in effect by April 30, 2010 and you must actually close by July 1, 2010.

While the $800,000 cap on a home price was a bit of an unwelcome surprise, it's still a tremendous incentive considering historicaly low home prices and interest rates. the big 3 are here and it's never been a better time to own a home.

 So if you are looking for a home in Basking Ridge, Harding, Bernardsville, Bedminster, Madison or the surrounding areas, call me at 201 259-4449 for help finding the home of your dreams.

The Institute of Supply Manager's Manufacturing Index rose to 55.7, higher than expectations of 53.0.  Within the report was an improved reading on employment, which suggests some hiring in the manufacturing sector.  This is an encouraging reading heading into Friday's official Jobs Report.

Pending Home Sales were reported up 6.1%, mostly attributable to first time home buyers rushing to get into contract before the expirations of of the $8,000 tax credit - remember, we are forecasting an extension of the tax credit program.  It's the 8th straight monthly rise and the best overall level since December of 2006.  We think that the housing sector is on the mend, but we could see a soft patch hit after the eventual expiration of buyer tax credits and MBS (mortgage backed securities) purchasing.  That said, this looks like a very good time to be a buyer of a home if your intend to keep it for the long haul.  One other point - if the tax credit extension is approved, there is a provision to extend the benefits to move up buyers.  Beside the expanded income limits of $125k for singles and $250k for married couples, owners of a home for 5 of the past 8 years could qualify for a $6500 tax credit. 

 Although the new loan limits passed, the bill hasn’t been signed and the guidelines released. We will keep you posted once the legislature is signed and we know the requirements on the loan limits and the new tax credits..

Stay tuned.  

The New Jersey housing market recorded stunning September home sales - the most since 2005 as Contract-Sales  were 29% higher durint the month than just one year ago.  This will be the fourth consecutive month on a year-on-year increase in sales which were up by 12% in June, 8% in July, 21% in August and 29% last month as compared to the same months last year.

In New Jersey, the number of home foreclosures reached its highest point in September with a whopping 966 foreclosures. This is the highest monthly total in the last four years for the state, reflecting a 10% increase from August and a 51% increase since the beginning of the year.  New Jersey's REO rate remains at 0.04% for the second straight month, while the national REO rate has increased slightly (from 0.09% up to 0.11%). 

The average mortgage commitment rate for a 30-year fixed rate loan reached its lowest point on October 8th when rates fell to an average of 4.87%.Rates have drifted up slightly since then to end the month at 5.00%.  This slight increase in interest rates was due to a rise in bond yields.   

Did you know that shopping around for the best mortgage rate usually involves contacting three or four mortgage brokers and during that process they will usually ALL check your credit? This is the worst thing you can actually do for your credit as it results in lowering your score. YES multiple inquiries on your credit lowers your score.

When you are ready for a mortgage, go online and get your own credit score and then when applying for mortgages
GIVE that score to your mortgage companies. Tell them you have it and you don't want them to run it for you. Once you decide on a company they will of course have to run it  but at that point you will not have done any damage to it.

 If you have any other mortgage questions, don't hesitate to call me at 201 259-4449 or email me at Adrienne@AdrienneFrancis.com.

Once again, Coldwell Banker has won this coveted award for servicing home sellers with the highest standard of service.

For additional information on Harding and Homes for sale in Harding, click here

If you would like additional information on Bedminster properties, schools, etc. visit my Bedminster page or click here

If you would like additional information on homes, schools, demographics in Warren, click here

The following is some valuable information from our mortgage advisors that I wanted to pass along. Basically, things have changed a great deal so read on and feel free to call them or me if you have any questions. (201) 259-4449. Their numbers are below.

If you have any clients sitting on the fence, here is some useful information: rates are down.  The conventional 30 year fixed is about 4.75 – 4.875%.  The 5/1 ARM is around 3.79%. FHA are around 5.25 – 5.4%.  These are today’s rates.  As you know they change daily, but now is the time to get moving and take advantage of these rates.

Remember you need 10% down on a single family home and 15% down on a condo to go conventional.  If the loan will be over $417,000 they need 15% down, condo or single family home.

Another issue that has come up recently is condo vs townhouse.  We use townhouse as a style but it is actually a legal description.  Check if the condo is legally described as a townhouse or a PUD.  It changes whether we have to do the condo approvals and how they are done.  It also impacts down payment and rate.  So check with the home owner’s association.

The other item that is causing problems with condos is whether the association has a reserve account.  Some developments have had major work done, new roof etc and are assessing the units because they don’t have a large enough reserve account.  It is very difficult to find a lender that will do a mortgage with an assessment on owners.

Be sure to get pre-approved as sooon as you begin to think about buying a home. The regulations have changed and you need to know exactly where you stand sooner rather than later. It's not as simple as it used to be. It also makes applying for the actual mortgage,(once you have a contract) and getting a commitment much easier if we have the information up front. If you have any questions or need additional information, do not hesitate to call.

 Phyllis Byrne Nelson  and Fred Wilkinson, Coldwell Banker Mortgage

973-224-2454                  609-440-6706

A recent article in Yahoo claimed that one in three loan applications were rejected. While this seemed unbelievable to us, we asked our mortgage rep from Coldwell Banker to give us some of his stats. This is what he said.

"Regarding the Yahoo News article that 1 in 3 loan applications are denied, is probably a blanket statement for the country as a whole.  What I got from
the article id was that it directly reflects the lower end buyers.

By my numbers alone I can tell you that out of all the leads I have taken in 2009 not even .025% of them were declined for all programs so I will say maybe 1 out of 150.

Have things changed? Absolutely. For a conventional loan, you now have to have at least a 700 credit score if you are not putting down 20%. This is due to
the PMI companies tightening up their belts so much. And there really are no piggybacks or 100% loan to value loans out there right now.
However, there are still plenty of options even for someone with a 580 credit score and as little as a 3.5% down payment (which could also be all gifted).

In 2009, my use of FHA jumped about 10 times from what I used in 2007 and 2008 so FHA has taken over for a lot of the things that Conventional wont touch right now.

If anyone has any questions regarding underwriting please give me a call. Also rates should drop below 5% today :)

Sincerely,
Fred Wilkinson
Mortgage Advisor
Coldwell Banker/PHH Home Loans
Office: 609-440-6706
"The highest compliment I can receive is a referral from a friend."
"P.S. While my business is good and growing steadily, it is important
for you to know that I am never too busy to help those you refer to me:
your family, friends, neighbors, and coworkers."

 

Basking Ridge showed very strong home sales for August, compared to last month and with lots of homes still pending, September should be strong for Basking Ridge too.

Typical for August, new Basking Ridge listings were down but those should tick up in September when people start to sell again. In general, Basking Ridge was one fo the strongest performing towns last month with respect to sales. With great schools, wonderful restaurants and close proximity to all major highways, Basking Ridge is always a popular choice. For more information on buying or selling a home in
Basking Ridge, just call me at 201 259-4449. Check out my new listing at 14 Cedar St. It's adorable.