The Real Estate Zone Week 7 Was All About Credit Credit Credit!
The Real Estate Zone Week 7 was all about credit credit credit!
We started out as we normally do with an update from our mortgage expert Kurt Branstetter regarding what had happened earlier in the week and how it affects current interest rates for our listeners. Kurt referred to the current market as bi-polar and we couldn’t agree more! So we need to put the market on Prozac! Rates are at fifty year lows! Refi or purchase now according to Kurt! He completed a transaction where the property is currently valued at $510,000 and the replacement value is $625,000! In 2005, the same property was worth over $1,000,000 according to Zillow! Great job Kurt!
Our week 7 show special guest was Eric Philips with Georggin Law! They are a law firm that specializes in helping consumers with their credit and making sure that they have the best credit report possible! Eric brought his son Joey who is a great young man and Eric introduced him as his “bodyguard” and boy did we have fun with Joey! He was a great sport and we all enjoyed having him in studio! You can reach Eric at http://www.georgginlaw.com .
Eric has over 34 years experience and helped us to understand that the credit bureaus work for the creditors and not the consumers! They just do what they are told and that is one of the reasons why it is a good idea for consumers to have a company like Eric’s on their side so they have an advocate that can help watch out for what is best for them! Just writing the credit bureaus to get information changed on your credit report is not effective! Consumers must go directly to the creditor and make sure you get a copy of what the creditor agrees to tell the credit bureau to change so the consumer can follow up and make sure the credit bureau does as they are told.
FICO scores are a barometer, according to Eric, of how close a consumer is getting to bankruptcy. We dug into FICO scores and how they affect interest rates and costs for a home loan one late payment can cost a borrower a higher interest rate for the life of the loan and $12,000 more on a $400,000 loan! The accuracy of your credit report is vital to the cost of borrowing to buy anything especially a home!
We talked about utilization rate and what it means. Utilization rate is the percentage of the available credit on a credit card or a line of credit that is currently owed. The example we used is a line of credit of $10,000 where a consumer has $3,500 owed and $6,500 as an available balance. The resulting utilization rate is 35%. Eric pointed out that creditors are soft-pulling consumers’ credit reports every six months and they can, if they find your credit has changed, like a consumer doing a loan mod or short sale, shut down their line of credit and take your utilization rate from 35% to 100%! This damages their credit score dramatically and falsely makes it look like they have run their credit balance up to the maximum allowed! Another reason why many consumers need an advocate like Georggin Law on their side!
Next, Anthony brought up the affect that low FICO scores and damaged credit can have on the security clearances of active duty military, civilian contractors and members of the law enforcement community! They can lose their security clearance and often times their job/career due to damaged credit!
Eric mentioned a DEA agent, deployed to Afghanistan, that has had his credit ruined and he is entering into his retirement with nothing for retirement but damaged credit after 42 years of dedicated service to his country! Eric is working with him to try to help him get his credit rating back so he can try to build his retirement!
We took a call from John, Anthony and Kurt answered his questions live on the air and Eric advised him to go to http://www.annualcreditreport.com to get a free updated credit report!
We talked about bankruptcy and Eric shared with us a government program called a bankruptcy re-listing where a consumer can have their accounts that have been discharged re-listed as “account included in bankruptcy” which takes the item back in time and helps to improve the consumers credit and their FICO scores! One of the reasons that the consumers credit is improved is because the negative item that was showing as very recent is eliminated and the neutral item was re-listed as old as the bankruptcy. The longer the time from the item to now the less negative impact the item has on the consumers’ credit score. Eric suggested that all consumers who have had their bankruptcy discharged should contact their creditors or Georggin Law can for them to make sure that the accounts that were discharged reflect as “account included in bankruptcy” as soon as the discharge is complete!
Thank you to Eric from Georggin Law, his son Joey, Kurt Branstetter and Anthony Ramirez our mortgage experts for joining us on the show!
Thank you for your time!
Make sure to tune in next Saturday afternoon at 3 on 760AM KFMB!
Be sure to mark your calendars, we will be hosting a seminar on August 20th from 9AM to 1PM at our office in Escondido! We will cover: The right way to buy your first home! How to avoid being taken for a ride by your lender during the short sale of your home! What it takes to successfully sell your home in today’s market! What to watch out for when buying foreclosures! And anything you want to cover! On August 27th we will have a foreclosure caravan! If you want to invest in foreclosures, you will not want to miss this opportunity to walk through foreclosures with our experts! That’s August 20th and 27th from 9AM to 1PM at our Keller Williams Office in Escondido! To RSVP, call me directly 760-802-9500 that is 760-802-9500! Or email me reomike@cox.net that is reomike@cox.net ! Seating is limited so call or email now to reserve your seat!
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