Northwest Indiana Loan Guy Blog

OK… I’m going to rant and rave for a minute or two and then be done. I need to sound off and I want everyone within shouting distance to hear!

If you are still sitting on the fence deciding whether or not you are going to buy or refinance your Indiana mortgage, let me ask you this.  WHY???? WHAT EXACTLY ARE YOU WAITING FOR???

Let me give you a few reasons to fall off onto the “right” side!

First, mortgage interest rates are at near 30 year lows. Right now, FHA rates are in the mid to low 5% range. Do you remember back in the early 80’s (I don’t) when rates were 18-20%? Thank goodness for the adjustable rate mortgage that could be had for the paltry rate of only 16%… Yes, now is a great time to take advantage of the rates and stop trying to time the bottom. The difference of 1/8thof a point (0.125%) on a $150,000 mortgage is about $9 a month. Is it really worth it if rates go back up and you missed your opportunity?

Next, houses are on sale. With the amount of inventory currently and sellers needing to sell to buy their next home, prices are very attractive. Remember, the deal of the century comes around about once a week now!

OK, so you say the credit requirements have increased and qualifying is harder. Yes, you actually do have to have a job and your income has to be in the area of your peers. The days of the “Liar Loans” are gone. No more claiming to make $60,000 a year working part-time at McD’s. If you have read any of my blogs, you know that I work a lot with clients that have credit challenges. Just because you do not qualify right now does not mean you cannot in a couple months. You just need to work on it to reach your goal.

For those of you who have lost your income, I am truly sorry. There is not a lot we can do for you right now, but once you get your steady income back, I can help. Even if you had some issues during your time off, let’s see what can be done. I have a number of options available.

If you are worried about the economy, so am I. Here’s my take and it seems that several people smarter than I agree. First, the government is pumping money into the mortgage market to keep the rates artificially low. This is to stimulate buying to get this glut of homes off the market. They are also offering the $8,000 tax credit to help push you off the fence. Want your (up to) 8 grand? Gotta close on your home by November 30. While there has been talk of extending and/or modifying the terms of this program, there is nothing set in stone.

Many people are worried about inflation on the horizon. Will it happen? Maybe! If it does, it could be mild, moderate or severe. No one knows, but the government seems to be watching very closely and making adjustments as needed. One of the best ways to weather it, however, is in real estate.

Even though many areas of the country have seen drops in property values, this was really to be expected. When the cost of a home is rising much faster than the size of your payroll check, you know something has to give. Sooner or later, the rising prices become unsustainable and we see a crash. Fortunately in Northwest Indiana, the crash wasn’t as big as in other areas, but we didn’t see the huge increases in property values like in Vegas, Arizona, Florida, etc.

Ok, I’m off my soapbox! I just hope that what I have outlined makes some sense. This pain we are feeling is not going to last forever, nor are the government incentives to purchase now. In the long run, real estate is still a great investment, even if it is just a place to live. At least any equity will go into your pocket instead of your landlords.

I hope you take advantage of this position we are in now, as there really may not be a better time to buy for years to come. If you have questions, I am always will to answer them. As your Northwest Indiana Loan Guy and FHA loan professional, I’m here to guide you in the right direction.

Scott

Scott Swinford, your Northwest Indiana Loan Guy

Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.

Credit Issues? Not an issue for us! Visit http://www.usccraonline.com/ and register to get $300 in FREE gasoline

I was reading an article today on MSNBC.com that really drives the point home about first-time home buyers being able to get great deals on homes. While the story really highlights California and a few of the other states that saw huge appreciation and then watched helplessly as the bottom fell out of the market, the local buyers in Northwest Indiana can see some substantial savings.

No, you will not see sellers dropping prices from $400,000 to $220,000 in Crown Point or St. John, but you may see homes that two years ago were out of your price range show up in it again. Especially with the number of HUD and bank owned properties available.

Even better, you can now borrow the money to fix the house up to suit your personal tastes at still low interest rates. Let me give you an example…. I had a young couple that purchased a HUD owned property with a bid of $40,000. I believe it was originally listed at $57,000. They borrowed $22,000 to make some outside repairs, remodel the bathrooms, add new carpet and hardwood floors throughout the house and purchased all new appliances (plus more). The loan was for $62,000 on a home that appraised at an after repair value of $91,000. Not only did they get a nearly brand new home decorated the way they wanted, they borrowed the money at a very low interest rate and gained nearly $30,000 equity when they moved in. What’s the secret? The FHA 203(k) Streamline loan.

Can I help you get the same deal on a home? I will certainly try my hardest! My group of preferred Realtors and I are constantly looking for the best buys and the best financing options for our valued clients.

To add even more frosting to the cake, if you are a first-time homebuyer (you have not owned property in the past 3 years), you may be eligible for an $8,000 tax credit from the US government. While it is best to check with a CPA to review your individual circumstances, almost all FTHB’s will qualify. Unfortunately, as I write this, you CANNOT use it for your down payment here in Indiana. Some lenders are telling their clients to file an amendment to their 2008 taxes claiming they currently live in the home they are intending to purchase so that they can get the credit before closing. I have two words in response to this: “DON’T” and “FRAUD”. If you don’t have the required 3.5% downpayment for FHA on-hand, let’s talk. There are other options available for you!

If you are still sitting on the fence, get off NOW! With the low price of homes, the near 30 year low interest rates and the tax credit (which expires on December 1, 2009), there may never be a better time to purchase.

Less-than-perfect credit? We can still help. With our attorney facilitated credit repair and other benefits, joining USCCRA may be the solution you have been searching for.  The average client in our association can see a 120+ point increase in their scores, hopefully allowing them to take advantage of the low housing prices and great financing programs currently available. 

If you are still undecided or just need a trusted advisor to answer your questions and guide you through the maze of buying or refinancing a home, you have come to the right place. If you are looking for a mortgage and want a clear explanation in plain English without a bunch of hidden fees and a bait-and-switch story, give me a call at 219-695-0369. In fact, if you want a lender who will rip you off and take advantage of you because you do not understand the process while hitting you with excessive, hidden fees… call me also. I would be happy to give you the names and numbers of several lenders that fit that description.

Scott

Scott Swinford, your Northwest Indiana Loan Guy

Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.

Credit Issues? Not an issue for us! Visit www.usccraonline.com and register to get $300 in gasoline.

You see it every day in the newspapers and on TV. Foreclosures are on the rise, bankruptcy filings are increasing and more companies are either going out of business or laying of employees. For many, this is a difficult time in their lives and they are unsure what their options are and which way to turn for help. This is especially true for areas of the Rust Belt such as here in Northwest Indiana.

Enter the dirtballs! Because this is a family blog, I’ll be gentle, but there are a lot of bad people out there that take advantage of those in distress. Those who would gladly steal the last dime a family has and go on to the next person in line.

Let’s talk for a minute about credit repair companies. The topics of loan modification, foreclosure rescue, debt modification and others will have to wait for another day.

Doing a Google search on “credit repair” turned up 17,600,000 entries. While most are operating within the confines of the law, there are quite a few who are not. For instance, if you see the word “guarantee” in their advertising in the form of “we guarantee to erase your bad credit”, you need to avoid them, as the Federal Trade Commission (FTC) has them on their radar. Also, if the company is charging in advance for a “set-up fee” or other fees, avoid them also. With a couple exceptions, they are not supposed to be paid until after the disputed items are removed or the agreed upon work has been done.

The other issue is not quite as black-and-white. While these companies generally operate within the law, the results they get are limited and often times very slow. For example, quite a few companies will send dispute letter after dispute letter to the credit reporting bureaus hoping that they are lucky enough to have the bureau be unable to validate the information or that the creditor does not respond in the legally allowed amount of time so that the item in dispute must be removed from the credit report. While this can sometimes be effective, it is more than likely to not be effective or even have the item be re-reported once the creditor verifies it. Continued use of this technique can get future disputes from that client labeled as “frivolous” and may be discarded by the bureaus without any action being taken.

One other problem that I will discuss is the lack of credit can also be an issue. If the company removes all or even some of the negative items by having the tradelines deleted, it can actually lower the credit score if there is no positive information on the report. It is possible that some bad credit can be better than no credit at all.

I recommend a company called USCCRA to my clients. After spending some time looking at their business plan, here is why:

• The disputes are all handled by attorneys that specialize in credit repair. They understand the laws and will dispute each individual item separately, instead of sending in multiple disputes claiming they are “not mine”.
• The attorneys have the bark AND the teeth to litigate if necessary. While it rarely becomes necessary, they are not intimidated by the huge dollars that the big companies throw to their legal teams.
• While the average client will see a 120+ point improvement in their scores in about six months, there is no “guarantee” that any item will be removed. Their warranty states they will keep working for you until you are happy with the results.
• Most importantly, they will assist the client in getting a checking account, credit cards and other forms of positive credit to help build a positive report while the negative items are being disputed. And, because you are joining an association, you have access to these and many more benefits for 12 months. 

While I could go on, I recommend that you visit the website to get a feel of what they can do. Don’t take it from me, check the site out for yourself and see what others are saying about the program.

One word of warning… you may not be a fit for this program. While other companies will take your money and act like they are helping you regardless of your situation, this program is really designed for those who have had financial issues in the PAST and are currently past them, but are being held back by poor credit scores. If you are in the middle of a bankruptcy, a foreclosure, or are unable to pay your current bills, contact me and I will try to point you in the right direction, but credit repair is not for you at this point. Once you are on the road to recovery, then credit repair can help! 

I hope this has been helpful. If you have other topics you would like to see addressed, please let me know. You can email me at scott@nwiloanguy.com.

Scott

Scott Swinford, your Northwest Indiana Loan Guy

Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.

Credit Issues? Not an issue for us! Visit www.usccraonline.com and register to get $300 in gasoline.

OK… it’s been a while since I posted. It’s not that I haven’t wanted to, but I just haven’t had the opportunity.

Poor excuse, I know!

This time of year, all the farmers around us are out tilling, fertilizing and planting. When I was much younger, I thought I would like to do that when I was older. Then I figured out that it is a lot of hard work and little recognition, so I changed my mind. With that said, I tip my hat to the local farmers and ask just one thing… Can you move those big tractors over and quit hogging the road when I’m in a hurry????? 

But seriously. In the past year or so, I have looked at my mortgage business much like a farmer looks at his fields. Right now we are at about 25% of the loan originators and have many fewer real estate agents than two years ago due to the current economic situation. Much like many farmers who could not afford to continue farming for a living, a great number of my peers have left the business.

The ones who could afford to stay have seen their income cut tremendously and have really needed to cut back to only the basic business necessities. Myself and a few others have taken this time to act much like a farmer in the spring. The farmer will till the soil to stir up and blend in the previous years crop remains. They will then carefully fertilize it and plant  the seeds that they hope will grow into big, strong plants and produce a bounty crop. They nurture the soil and protect the crops as best as they can and worry about things such as no rain, too much rain, too much sun, high winds, storm damage and even insects. Many things that are out of their control, but still some things that keeps them up at night.

At the end of the season, as they collect the crops that they tended to, they hope that their knowledge, and a little luck, has allowed them to make enough to start the process again next spring. I hope they have been successful also, as we need what they are growing for our survival also.

Much of the same is true in real estate. My belief is that during the slower times, I can blog more and update my websites frequently. I want to be able to give me clients (and potential clients) a resource to get needed information from someone that they can trust. Not to say that other loan officers are not trustworthy, but some of them believe that the way to grow their number of clients is to spread on the BS real thick. Not exactly my fertilizer of choice!

I, like many others, have been able to use the internet to reach a lot of people. I get a tremendous number of hits on my website for USDA Rural Development loans and the FHA 203(k) Streamline loan. I have presented myself as a Trusted Advisor who is there to answer questions and guide others through the loan process, not just for the commission, but so that I can look myself in the eyes in the mirror at night and know that I have been able to help someone. You can never go wrong by doing the right thing!

If I don’t update this blog as much as I would like, it’s because I am working one-on-one with my clients to help them purchase the home of their dreams or refinance their existing castle. Now that I have access to the full FHA 203(k) loan product, I can help turn that beat-up or foreclosed home into the home of their dreams with just one loan up to the value after repairs or rehab. For a first time homebuyer, this is a great way to buy a home, use the $8000 tax credit (contact your tax advisor for full details) and have equity in a home soon after they move in.

If you have any questions, please feel free to contact me. I will always do my best to help you. I can be reached via email at scott@nwiloanguy.com.     

Scott

Scott Swinford, your Northwest Indiana Loan Guy

Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.

Credit Issues? Not an issue for us! Visit www.usccraonline.com and register to get $300 in gasoline.

www.easy-debt-reduction.com

Are you familiar with the term “Stealth Inflation”? It’s kinda like raising the prices on something without anyone really noticing.

For instance, say you love a particular brand of peanut butter and always buy the 16 oz jar for $3.49 (I’m just making up numbers here, so stay with me). The next time you buy your favorite peanut butter, it is still $3.49, but the jar contains only 14 oz. To make it worse, the company got sneaky and is using the same size jar, but the bottom is now concave so it holds less without being obvious about it.

Chances are, you may not have noticed as they do it over time. If you have, congratulations. My personal favorite (hint of sarcasm intentional) is that my soap now looks like someone has been whittling out the middle of the bar. The price has not gone down, but I get fewer uses from the soap.  

Would a mortgage company do this? Sure… why not? Several months ago, you could get an FHA mortgage with a 580 middle score, no problem. Pretty soon, while you could still get the loan, if you had a score under 620, you would have to pay a little more in interest as a “penalty”.

Fast forward to recently… Most lenders (banks) are requiring a 620 minimum middle score and a few have gone to 640. But, and here is the key, but if you have a score under 660, you may pay a little higher rate because of the “penalty” once again from a few of the lenders. I anticipate that this will continue with others also.

Cutting to the chase: Although the government has announced an initiative to lower rates across the board, the lenders themselves may see to it that not everyone benefits. As I have always said, risk = rate. The greater the risk (meaning the lower the score), the higher the rates the client will pay. I don’t mean to say or even infer that the borrowers will not see any benefit from the rate decreases (if and when they come), but some may see more benefit than others due to the lenders being overly cautious.

The solution: keep your credit score as high as possible. Visit www.annualcreditreport.com once a year to check your credit reports for errors. Since it is a fact (2004 PIRG report) that 79% of all credit reports have errors and 25% are significant enough to get turned down for a loan, this is a valuable use of your time and there is NO charge. If you need some assistance improving your credit, I suggest you visit www.usccraonline.com and register on the site for access to all the reports, videos, and downloads. You can even register to get $300 in FREE gasoline.

Now is a great time to purchase a new home or refinance an existing one, but since the lenders are being so cautious, your credit score is more important than ever. If you have questions about your credit or available loan programs, please feel free to contact me at 219-695-0369 or send an email to scott@nwiloanguy.com.

Scott Swinford, your Northwest Indiana Loan Guy

Your source for Indiana FHA loans, Indiana FHA 203(k) Streamline loans, Indiana USDA Rural Development loans, and much more.

Credit Issues? Not an issue for us! Visit http://www.usccraonline.com/ and register to get $300 in FREE gasoline.