Action Plan to Improve Your Credit Score

From Wallet Pop Financial Web Page:

Your credit score impacts your ability to get out of debt and stay out of debt. The worse your credit score, the higher the interest rate you will be charged on money you borrow. The better your score, the less your debt will cost you and the quicker you'll be able to pay it off.

Step 1: Get Your Credit Report and Check it For Errors
Under the Fair Credit Reporting Act, the Big Three credit bureaus are required to provide every consumer who asks with a free copy of their credit report once a year. You can get yours by going to annualcreditreport.com. This step is important because it is extremely likely there are errors.

Step 2: Automate Your Bill Paying.

This may be the most important tip. Missing payments or being late on payments can quickly ruin your credit score. For this reason, I strongly recommend that you use your bank's online bill-paying service to automatically transfer a pre-set amount every month from your checking account to cover at least the minimum payments on all your credit accounts

Step 3: If You Have Missed Payments, Get Current.

Step 4: Keep Your Balance Well Below Your Credit Limit.

Of all the factors you can control -- and improve quickly -- how much you owe is probably the most powerful. Since the credit crunch, credit card companies have been cutting customers' credit limits without warning.This can be devastating to your credit score

Step 5: Beware the Credit Card Transfer Game.

For years, people have saved money by transferring high-interest credit card balances to low-interest cards.This can still be helpful, but be aware that using one credit line to pay off another sets off credit score alarm bells -- even if all you're doing is consolidating your accounts. All other things being equal, your credit score will be higher if you have a bunch of small balances on a number of different cards rather than a big balance on just one or two.

Step 6: If You Rack up High Balances, Pay Your Card Bill Early.

Step 7: Hang On To Your Old Accounts

Part of your credit score is based on how long you have had credit accounts. Closing old accounts shortens your credit history and reduces your total credit -- neither of which is good for your credit score. Keep the older accounts open even if you aren't using them.

Step 8: Know the Difference Between a "Soft Inquiry" and a "Hard Inquiry."

The credit bureaus all recognize the difference between you checking your own score (a "soft inquiry") and lenders checking your score (a "hard inquiry"). While too many hard inquiries can lower your score, soft inquiries don't count at all. Feel free to check your score as often as you want.

Step 9: Buy a 3-and-1 Report And a Credit-Monitoring Package and Identity Theft Service.

Your credit score and credit report are so important that it makes sense to pay for a 3-and-1 Report (which provides you with your credit scores from the three bureaus) as well as an identity theft monitoring service. In most cases, these services will cost you between $11.95 and $19.95 a month.

New Credit Score Loan Criteria

Minimum Loan score and LTV allowed for Purchase transactions FHA Loans:

Loan Score lower than 500 = not allowed

Loan Score 500-579 allowed with maximum 90% LTV* (10% down payment required)

Loan Score 580-599 allowed with maximum 95% LTV* (5% down payment required)

Loan Score 600 and higher allowed with maximum 96.5% LTV (3.5% down payment required)

*funds for DOWNPAYMENTS must come from BORROWERS OWN FUNDS

Dollar General vs. Walmart--Price Comparisons on 10 Standard Grocery Items

Interesting article from walletpop.com on the price battle between 2 discount retailers:

By Marlene Alexander
Jan 7th 2011 Filed under: Family Money, Saving Money, Shopping, Economizer

Dollar General is planning on opening 625 new stores this year. Added to the 9,200 stores currently in operation, we wonder if Walmart should be looking over its shoulder. The following Dollar General vs. Walmart price comparisons are taken from Walmart's online shopping website and random Dollar General stores.

We picked 10 grocery items that a family might buy on a regular basis and compared them to regular store prices. Please note that prices will vary from region to region, based on market need and a particular store's overhead costs.

1. Cheerios cereal: A 9- to 14-oz. box
Dollar General: $2.85
Walmart: $3.50

2. Tide Liquid Laundry Detergent: 75-oz. size
Dollar General: $10.50
Walmart: $12.97

3. Lysol Disinfectant Spray: 12.5-oz can
Dollar General: $4.25
Walmart: $4.22

4. Charmin Basic toilet paper: 24 double rolls
Dollar General: $10
Walmart: $9.97

5. Q-Tips: 500 count
Dollar General: $3
Walmart: $4.51

6. Suave Shampoo: 22.5-oz
Dollar General: $1.75
Walmart: $2.94 for 32oz.

The Walmart price seems the better deal because of the larger size, but it still works out to be two cents more per ounce at Walmart than at Dollar General.

7. Huggies Diapers: sizes 1-6
Dollar General: $10 for 50 to 23 diapers
Walmart: $32.75 to $35 for 100-192

If you buy two packages of 50 diapers at Dollar General, it will cost you $20 or about 20-cents per diaper. Buying a box of 100 diapers at Walmart will cost $32.75 or 32 cents per diaper.

8. Campbell's Chicken Noodle or Tomato Soup:
Dollar General: $1 per can.
Walmart: 93-cents per can.

9. Hamburger Helper:
Dollar General: $1.50 per box
Walmart: $2.23 per box

10. Palmolive Dishwashing Liquid: 34-oz. size:
Dollar General: $2
Walmart: $2.34

Overall, I'd say that Dollar General is the price champion, at least according to these 10 picks but, as with shopping anywhere, it pays to be a careful shopper and never assume you're getting the best deal in a particular store just because you always have done so in the past

By Marlene Alexander
Jan 7th 2011 Filed under: Family Money, Saving Money, Shopping, Economizer

2010 Year in Review

Just when we thought the Real Estate market was revving up, the engine stalled again. Buyers continue with their indecision. Should I buy a home? What if prices drop further? Is my job safe? Again, low consumer confidence.
The only good news about the 2010 housing market is affordability reached an all time high. The combination of lower home prices and low interest rates, made purchasing a home the most affordable since World War II.

Billionaire Warren Buffett said the U.S. will recover from the residential real estate slump soon, as demand for houses catches up with the supply that accumulated during the bubble.
"Within a year or so, residential housing problems should largely be behind us," Buffett wrote in his annual letter to the shareholders of his Berkshire Hathaway. "Prices will remain far below 'bubble' levels, of course, but for every seller or lender hurt by this, there will be a buyer who benefits. Indeed, many families that couldn't afford to buy an appropriate home a few years ago now find it well within their means."

Cathy & I continue to enjoy our Family and our 3 year old grandson Tyler. It is so much fun watching him grow! We were also told by our daughter that we have another baby Boy on the way, due in April! We were able to have a reunion of 4 generations of Family this year, as Cathy’s Dad visited us from Florida.

While over 20% of the licensed Realtors left the business over the past few years, we adapted to this market by investing in new technologies that will give our sellers a definite advantage in this slow market. Picture slide shows, Virtual tours & now Video tours are helping our listings sell faster. We invested in Mobile marketing, where potential buyers can look up our listings via their smart phones and get not only detailed property information, but multiple photos of the home right in their phones. In this slow housing market, we are doing everything possible to ensure that our listings are readily available to the few buyers who are currently looking for homes.

Although the buyers are indecisive right now, the real estate market should improve in the very near future. People want to have a home of their own where they can raise their family, share with their friends and retreat from the world to feel safe and secure. The emotional reasons for owning a home have never changed. We live in one of the few countries of the world who values homeownership so much that we have supported it in our laws.

Keep in mind that half of our business is in Indiana now. We have several offices in NW Indiana for your convenience. Plus, we have that Illinois Connection!

In our 26th Year of providing Real estate sales & service to the community, we want to thank you for your business, kind words & your referrals.

We wish you and your Family only the Best for 2011 !

Cathy & Jim Higgins

Why Your Credit Score is so Important!

When Higher is Lower

Buyers need to know their credit score before writing a contract to buy a home so they'll have a realistic idea of what their payment will be. Most lenders quote rates based on the best credit score. If a buyer has a lower than "A" credit score, the rate goes up in increments that could dramatically affect the payments.

There is an inverse relationship between the credit score and the interest rate charged. The higher the score, the lower the rate will be. You can see from the chart, this lender quoted their best rate for a credit score of 760-850. However, this lender's minimum acceptable score of 620-639 would have to pay 1.5% higher interest. In the example below, it makes almost $200 a month difference. It is critical to know your credit score before you make a decision to buy a home.

30 year Fixed Rate Mortgage - $200,000 Loan Amount
FICO Score
APR
Monthly Payment

760-850
4.466%
$1,009

700-759
4.688%
$1,036

680-699
4.865%
$1,057

660-679
5.079%
$1,083

640-659
5.509%
$1,137

620-639
6.055%
$1,206

Buyer's logical first step is to get pre-qualified or pre-approved with a mortgage lender prior to looking at homes. This gives the buyer the confidence of knowing how much mortgage is available and if they can expect the best interest rate which will lower their payment. Other benefits include bargaining power, quicker closing and the chance to discover any issues on their credit report that need to be corrected before going on contract.

The Worlds Most Expensive Home $1B

Measure out: one part Hollywood; six parts traffic; a bunch of rich power-moguls; pour in six heaped cups of poverty; equal parts of mayhem and order; fold in your mixture with equal parts India; throw it all in a blender on high (adding generous helpings of pollution to taste) and presto: Mumbai.

This 27-story single-family residential tower recently finished in Mumbai almost certainly vanquishes all pretenders to the throne of world's most expensive private home, with a price tag estimated at somewhere close to $1 billion.
Built by Mukesh Ambani, the chief executive of Reliance Industries, the home reaches new levels of decadence, with three helipads, swimming pools, four-story "hanging gardens" and a six-story parking garage. Dubbed "Antilla," the 173-meter tall mansion also includes a 50-seat cinema, ballroom, gym and every room is custom designed.

According to published reports, the tower cost $77 million to build, but that only hints at its value. After all, how do you put a price tag on a one-of-a-kind building in a city where every piece of open land is coveted like gold?

I could find a billion other things i'd rather do with my money.

Buying a Home Now Makes Sense

By Karl Case, professor emeritus of economics at Wellesley University & co-creator of Standard's & Poor's Case-Schiller housing index:



For people with a realistic version of the American Dream, buying a house now can make a lot of sense. Think of it as an investment.

• The return on that investment comes in two forms. First, you live in the home and so it provides you with a real flow of valuable services. The 2nd part of the yield on investment is the capital gain you receive if the home appreciates and you sell. Gains are excluded from taxation if the property is a primary residence and the gain is less than $250,000 for a single filer or $500,000 for a married couple filing jointly.

• Do the math. Four years ago, the monthly payment on a $300,000 house with 20% down and a mortgage rate of about 6.6% was $1,533. Today that $300,000 house would sell for $213,000 and a 30 year fixed rate mortgage with 20% down would carry a rate of aboput 4.2% and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000.

Even if home prices have not fallen 25-30% in the area you want to live, interest rates are as low as they were when Dwight Eisenhower was President. Less interest is less monthly payment and thousands of dollars less in interest over the course of the loan. AND, no matter where you want to live, home prices have fallen.