10 Steps to Homeownership
June 6th, 2011
First-time homebuyers face an uphill battle when applying for a mortgage in today’s real estate environment. The days of no-credit and no-money-down loans are definitely over—at least for now. There are, however, a number of steps every first-time buyer should follow in order to make the homebuying process as smooth as possible.
Here are 10 steps to guide you into homeownership: More »
Posted By: Nathan Nead | Comments (0)Mortgage or Credit Card: Which Would You Pay First?
August 13th, 2010
A recent TransUnion study found that the percentage of Americans behind on their mortgage but current on their credit cards increased nearly 55 percent between early 2008 and the third quarter of 2009.
And while the amount of consumers we’re talking about is still relatively small (6.6%), I find the overall trend to be quite compelling. Clearly, consumers are beginning to think differently about the priority of their debts. More »
Posted By: Joshua Heckathorn | Comments (5)Fannie and Freddie Twist the Knife in Our Backs
February 17th, 2009Operating under federal control and still burning through cash like it’s going out of style, Fannie Mae and Freddie Mac have decided it’s the perfect time to twist the knife in our backs and make it even more costly to get a home loan in this horrific lending environment. Effective April 1st, the dynamic duo plan to implement a new set of mandatory loan fees based on tighter down-payment and credit scoring rules.
Perfect timing guys! Just what our economy needs to pull itself out of this seemingly never-ending slump. And while I can understand their desperate need for additional revenue-generating fees, it just doesn’t make any sense to penalize future buyers that come to the table with solid credit scores and sizable down payments for the sins of the past. That’s not going to improve the situation for anyone but Fannie and Freddie.
Posted By: Joshua Heckathorn | Comments (5)Living Within Our Means
December 4th, 2008
I’ve received several emails lately from ‘Creditnetters’ expressing concern about their HELOCs getting frozen without much notice from lenders. Yes my friends, they can do it, and there’s not a whole lot you can do to fight it. HELOCs, just like credit cards, can be frozen or shut down at any time.
In some cases, reductions in home values have triggered the HELOC freeze (you may be able to fight this by using comparables to prove them wrong). In others, a minor drop in credit score or a late payment gave the lender enough of a reason to reduce their risk by completely removing the exposure from their books. As credit issuers are rushing to stanch the bleeding in every way possible these days, I wouldn’t expect things to get much better in the near future. It’s just the reality of the world we live in at the moment.
The real thing that bothers me is that in most cases the individuals have been using their HELOCs to cover monthly bills and other daily expenses. So, when the creditor pulled the plug, they found themselves in an extremely difficult financial position. While I am sympathetic, a part of me wants to repeatedly rap on top of their heads and do one of those, “Hello McFly, anybody home?” lines from Back to the Future. Haven’t we learned anything by now? Yes, our homes are probably one of the largest investments we will ever make. Hopefully, in the long run, they will be one of the most profitable investments as well. But really, we should never be using them to finance our daily lifestyles. It’s just not a financially smart thing to do.
As the economy continues to weaken, it’s become apparent that the big auto companies and financial institutions are not the only ones who need a revamping. Millions of Americans also need to take a step back and revisit what it means to actually live within one’s means. In other words, make a promise to yourself today that you will spend less than you make each month. It’s all about changing your lifestyle so it coincides with reality. It may seem obvious, but the truth is most people struggle with this principle every day. So, if you can master the art of living within your means, I promise you will emerge from this credit crisis financially better off than those who don’t.
Posted By: Joshua Heckathorn | Comments (1)Financing A New Condo Purchase? Don’t Call ING
October 29th, 2008“How can I save your money”, answered the ING customer service rep. I responded and said, “By giving me a good rate on a home loan with low closing costs.” He uttered a fake courtesy laugh in return. I did the same.
I’ve been planning to call ING since a bright orange postcard arrived in the mail a few days ago marketing the popular Orange Mortgage. Low closing costs and a 5.25% rate sounded pretty good, and since I’m in the market for a new place, I thought I would check it out. I’ve always been impressed by ING’s customer service and the ease of doing business with them as well, so I was interested to experience first-hand how things have changed in their lending division given the current state of the credit markets. It didn’t take long to see that they too have become like everyone else.
I’m serious. Have you talked to anyone at a bank lately? It’s like talking to a bunch of zombies! Everyone is wound up so tight they have completely forgotten how to actually take care of a good customer, listen to what you say, and try to meet your needs. You would think that if anyone could hold onto the customer-centric approach, it would be ING. But alas, tightened underwriting standards and the fact that they are just plain scared of any risk have forced them to become internally focused. I can certainly understand why, but it’s still a shame.
So, if you’re in the market to finance the purchase of a new condo, don’t even bother calling ING. They won’t care if you’ve been a long-time customer with excellent credit history, solid credentials, and a big chunk of cash to make a down payment. All they will care about is following the new underwriting standards by the book, which require at least a 55% down payment on new-construction condos. That’s right, the maximum loan they can offer is a measly 45% of the purchase price. In regards to the estimated closing costs, they weren’t that low either. So, my search for a lender who actually wants to “lend” continues, and ING has lost the opportunity to make a great deal of money off someone who has never made a late payment in his life.
Have you had difficulties securing a loan lately? We would love to hear about your experience, so send us an email at creditcents@creditnet.com, or post a reply below.
Posted By: Joshua Heckathorn | Comments (0)
