What is FICO Score

The most common type of credit score is the

, which was developed by Fair, Isaac and Company. FICO is not the only credit scoring company, but is the score used most widely. Lenders usually base your interest rate on some variation of a FICO score, which can range from 300 to 850. As with all credit scores, the higher your FICO score, the lower the interest rate lenders will charge you.

While you can obtain a copy of your credit report for free at www.annualcreditreport.com, the score is separate and is not free. You can purchase a copy of your FICO credit score from their website, which is www.myfico.com or purchase credit scores from Experian, TransUnion and Equifax. Note that not every credit bureau uses the same range and formula for calculating a credit score – there are competing credit score “products” on the market. An example is a Vantage Score, developed by Experian. Another key point — getting a copy of your own credit report and credit score does not affect your credit score. Many people are hesitant to obtain their own reports because they fear a negative mark.

The FICO Score in Detail

FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined to the right. The percentages in the chart reflect how important each of the categories is in determining your FICO score.

Please note that:

•A FICO score takes into consideration all of these categories of information, not just one or two. No one piece of information or factor alone will determine your score.

•Your FICO score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.

•Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or re- establishing a good pattern of making payments on time will raise your FICO credit score.

Improving a Score

Make Your Payments on Time

The single most important thing you can do to keep your score high, or improve your score, is to make all your payments on time. Payment history is the largest factor that is used to determine your credit score. Payments that are 30 days or more past due will show up on your credit report and negatively impact your score. These negative marks generally stay on your report for seven years.

Keep Your Total Debt Load Manageable

With the second largest factor of your credit score being the total amount you owe, it is important to keep borrowing and total credit usage under control. If you currently have a significant amount of outstanding debt, your priority should be to stop borrowing and work toward lowering the balance. This isn’t always easy, but the only way to improve your overall debt situation is to stop borrowing or using credit cards and continue to make timely payments that reduce your balance.

In addition, you want to consider how much of your available credit is utilized. For example, having many credit cards that are maxed out, or very close to their limits, will negatively impact your score. Two credit cards with a $5,000 limit and a $1,000 balance on each will look much better than a single card with a $2,500 limit and a $2,000 balance.

Maintain Existing Accounts

Length of credit history is another important credit score factor, so it can be to your advantage to keep older accounts which are in good standing open. While you want to keep the total number of accounts manageable, sometimes it can hurt your score more to close an old account than to keep it open.

Be Careful When Opening New Accounts

While new credit is the least important factor in your score, it is still an important issue to consider. When you are shopping for a new loan or credit card, do your shopping in a relatively short amount of time. You don’t want to have your report show that you are constantly looking for new credit. You also don’t want to open credit accounts you don’t intend to use much. It may be tempting to get that additional 10% off when you open that new retail store card, but the little bit of money you save may be insignificant when multiple new accounts actually lower your credit score.

Posted on October 10, 2019 at 9:57 pm
Anil Aggarwal | Category: Finance | Tagged

Person finds old bills coins and lot more from his grand parents home-while cleaning

It Had Been Empty For Years

Evilenglish’s grandparents’ farmhouse hadn’t been lived in since 1997, so you can only imagine how dusty it was… Evilenglish was planning on selling the property, but before he could even think about putting it up for sale. He had a huge clean-up task on his hands. No one wants to live in a dusty, dirty house! Evilenglish first noticed something interesting… There was a carpet on the floor instead of floorboards…when we removed carpet , he found a giant concrete safe was underneath the carpet. Inside safe, there was safe with tens of thousands of dollars. “Just so you know anything from 1964 or older is 90% silver worth about 20 times face value of the coin,” he revealed on Reddit.

So next time when you buy home and see its need cleaning, think of this and get motivated.. It might be your door key to get rich

Posted on October 8, 2019 at 11:47 am
Anil Aggarwal | Category: Treasure Hunt | Tagged

Help with Flood Insurance and Disclosures

Help with Flood Insurance and Disclosures Flood-related disclosures can generate a deluge of legal and ethical questions for Realtors. What needs to be disclosed? How should you advise sellers? What should you tell buyers about flood risk and insurance? In this video, NAR Associate Counsel Deanne Rymarowicz answers these questions.

 

Flooding is the most common and costly natural disaster in the U.S., causing more than 1 trillion dollars in damage to crops and property from 2000 to 2018, and that number keeps rising.

As a real estate professional, flooding can also impact your business. Flooding is considered a material fact to a real estate transaction, and failure to disclosure flood damage can result in liability. In addition, it’s important to counsel buyers about the need and availability of flood insurance.

State laws on flood disclosures vary, so it’s crucial to understand your obligations in the state where you practice real estate. In general, a broker or agent must disclose the following facts when they have actual knowledge:

  • that a property is in an area where flood insurance is required;
  • that flood insurance was required in past;
  • that the property is located in an area that has flooded in the past;
  • and that the property is located in an area subject to flood risk that may cause many or most owners to purchase flood insurance.

In addition to state law, REALTORS® are obligated to disclose flood damage under the REALTOR® Code of Ethics. While REALTORS® must disclose reasonably apparent adverse facts, this duty does not obligate REALTORS® to discover latent or hidden defects in a property.

In a recent Texas case, Calhoun v. I-20 Team Real Estate, LLC, an appellate court ruled that a buyer’s agent’s team could be held liable for failing to advise a buyer that additional disclosure from the seller was necessary. While the seller’s disclosure form disclosed that the home had experienced past flood damage, Texas law requires further explanation for any affirmative disclosure. Here, the Seller’s form failed to provide any such explanation, and failed to answer other required questions, including improper drainage; whether the seller had flood insurance; and whether the property is located in a hundred-year flood plain or a floodway. Shortly after purchasing the property, the buyers discovered improper drainage, and that the property had a long history of flooding.

To avoid liability, and to protect your clients:

  1. Know your state’s disclosure laws to understand your obligation to disclose pertinent facts. As a starting point, check out NAR’s state-by-state flood disclosure survey available on NAR.realtor.
  2. Don’t conceal past flooding or water damage. If a seller asks you to conceal those facts, remember you still have a duty to disclose, so be sure to consult with your broker and legal counsel.
  3. Listing agents should ensure a seller’s disclosure form is fully completed, and when representing the buyer, be sure to notify your client of any incomplete disclosure requirements and request follow-up from the seller.

Now let’s talk about flood insurance. Keep in mind that a property does not have to be near water to flood. Heavy rain, rising sea and river levels, melting snow, drainage system backups, and broken water mains can all cause flooding. In fact, 25 percent of flood insurance claims occur in low or moderate risk areas. Flood damage is excluded under standard home owner insurance policies, but you don’t have to be in a high risk flood zone to obtain flood insurance. Flood insurance is available from the National Flood Insurance Program and many private insurers.

So, when counseling buyers about flood insurance:

  1. Remember that flooding can happen anywhere. Recommend that buyers to do their own due diligence, but avoid telling buyers that flood insurance isn’t required or advisable.
  2. Provide buyers with a list of reliable third-party resources about the importance of flood insurance, including the floodsmart.gov(link is external) website.
  3. And, advise buyers to speak with their insurance agent and mortgage lender to determine whether flood insurance is required for the property.

Be sure to check out the additional resources linked below this video. Thanks for watching this episode of Window to the Law!

Posted on October 4, 2019 at 1:17 am
Anil Aggarwal | Category: Buyers, Flood

Not All Debts are Considered Equal

When it comes to looking at money you owe, not all debt is created equal. While there are many shades of gray in life, there is absolutely good debt and bad debt. And the difference matters, whether you’re taking financial steps to buy a home or prepare for retirement. Let’s take a look at some of the distinctions between them.

Good Debt

In a nutshell, a good debt is one that can have a clear benefit to you, such as a long-term investment, even if the purchase isn’t a tangible item you can touch. Here are a few examples:

  • Mortgage – This may be the ultimate in good debt. Not only can buying a home be a smart decision now, the equity being built up typically improves your financial situation in the future. And there can be an immediate payoff – the interest may be tax deductible, so consult your tax advisor about that.
  • Student loans – Many can’t afford the yearly tuition outright, so taking out a loan for a degree is a long-term investment in your future. Many jobs require a college degree or professional certification, some pay higher for a candidate with a degree. And student loans tend to be at a lower interest rate.
  • Auto loan – If you don’t live in an area where public transportation is plentiful, a car is pretty much a necessity to get to work. So in that sense, a car loan may be required. Buying a previously owned model can help – you aren’t incurring the immediate depreciation that comes with that new car smell. But be careful…this can show up on the bad debt list, too.

Bad Debt

Another way to look at this is deferred gratification vs. instant. Is this debt getting you something long term or just a quick fix? If it’s a quick fix, it’s likely a bad debt.

 

  • Credit cards – This one isn’t a surprise, of course. And it applies whether it’s a major credit card or a store credit card. With higher interest rates and minimum monthly payments that look small but multiply over time, using plastic for those just-out-of-reach items really reduces your financial freedom. If medical emergencies come up, look to your medical provider for financial aid or payment options instead of credit cards. Many will work with you.
  • Cash advances – Also called payday loans, these are extremely high in interest and often have an additional fee. They are the ultimate quick fix that keeps charging you, big time, and should be avoided.
  • Auto loan – That’s right, auto loans could be considered BOTH good & bad debt. Although it’s not inherently bad debt, the interest rates on auto loans can be quite high, especially if your credit isn’t great. But there’s a smart way to stay off this list when you buy a car. Make as large a down payment as you can afford to keep those high-interest payments as low as possible.

As a general rule, as long as you’re using debt for long-term benefits that can enrich your future and net worth, instead of consumables that depreciate quickly, there’s a good chance your debt won’t be considered bad debt. Your financial professional can help you understand more.

to learn more about how our mortgage programs may help.

Posted on September 17, 2019 at 4:26 pm
Anil Aggarwal | Category: Buyers | Tagged

Total Home Inspection Checklist

Total Home Inspection Checklist
Use a checklist like this to make sure that you are looking at all parts of the house.
Check off those items that are in good condition and make notes about those that are not.
(Note that this list describes an ideal house, but in our experience no house is perfect –
not even brand new ones!!)
Please Note:
This checklist should not be relied upon as a home inspection report, nor should it be
considered a substitute for a home inspection. This list is representative, but NOT
exhaustive. If you require a home inspection, contact me and I will refer you good inspectors .
Grounds
____ Proper grading drainage away from house
____ No evidence of standing water
____ No leaks from septic tank or leech field
____ Yard, landscaping, trees and walkways in good condition
____ No branches or bushes touching house or overhanging the roof
____ Exterior structures (fences, sheds, decks, retaining walls, detached garages) in
good condition, no evidence of termite damage or rotted wood
____ Railings on stairs and decks are adequate and secure
____ Driveways, sidewalks, patios, entrance landings in good condition, and pitched
away from structure
____ Downspout drainage directed away from structure
Structure
____ Ridge and fascia board lines appear straight and level
____ Sides of house appear straight, not bowed or sagging
____ Window and doorframes appear square (especially bowed windows)
____ Visible foundation in good condition – appears straight, plumb, with no significant
cracks
Exterior Surfaces
____ Adequate clearance between ground and wood siding materials (6″ minimum); no
wood-to-earth contact
____ Siding: no cracking, curling, loose, rot or decay
____ Masonry veneers: no cracks in joints, no broken, spalling or flaking components
____ Stucco: no large cracks (discuss all stucco cracks with a professional inspector)
____ Vinyl or aluminum siding: no dents, damage, no bowing or loose siding
____ No vines on surface of structure
____ Exterior paint or stain: no flaking or blisters
____ No stains on exterior surfaces
Windows, Doors and Wood Trim
____ Wood frames and trim pieces are secure, no cracks, rot or decay
____ Joints around frames are caulked
____ No broken glass (window or storm panes) or damaged screens, no broken doublepaned, insulated window seals.
____ Muntin and mullion glazing compound in good condition
____ Storm windows or thermal glass used
____ Drip caps installed over windows
Roof
____ Composition shingles: no curling, no cupping, no loss of granulation particulate,
no broken, damaged or missing shingles, no more than two layers of roofing
____ Wood shingles or shakes: no mold, rot or decay, no cracked/broken/missing
shingles, no curling
____ Flat roofs: no obvious patches, no cracks or splits, minimal blisters/”alligatoring”
and wrinkles, no silt deposits (indicates improper drainage), sealed tar at flashings
____ Flashing around roof penetrations
____ No evidence of excess roofing cement/tar/caulk
____ Soffits and fascia: no decay, no stains
____ Exterior venting for eave areas: vents are clean and not painted over
____ Gutters: no decay or rust, joints sealed, attached securely to structure, no bending
or sagging, no sections of gutter or downspout missing, gutters clean, no mud deposits
____ Chimneys: straight, properly flashed, no evidence of damaged bricks or cracked
joints, mortar/cement cap in good condition
Attic
____ No stains on underside of roofing, especially around roof penetrations
____ No evidence of decay or damage to structure
____ Sufficient insulation and properly installed insulation (moisture barrier installed
closest to the heated area of the house)
____ Adequate ventilation, clear path into attic for air entering through soffit vents,
adequately sized gable end louvers, all mechanical ventilation operational
____ No plumbing, exhaust or appliance vents terminating in attic
____ No open electrical splices
Interior Rooms
____ Floors, walls and ceilings appear straight and plumb and level
____ No stains on floors, walls or ceilings
____ Flooring materials in good condition
____ No significant cracks in walls or ceilings
____ Windows and exterior doors operate easily and latch properly, no broken glass, no
sashes painted shut, no decay; windows and doors have weather-stripping, “weep holes”
installed
____ Interior doors operate easily and latch properly, no damage or decay, no broken
hardware
____ Paint, wall covering, and paneling in good condition
____ Wood trim installed well and in good condition
____ Lights and switches operate properly
____ Adequate number of three pronged electrical outlets in each room
____ Electrical outlets test properly (spot check)
____ Heating/cooling source in each habitable room
____ Evidence of adequate insulation in walls
____ Fireplace: no cracking or damaged masonry, no evidence of back-drafting (staining
on fireplace façade), damper operates properly, flue has been cleaned, flue is lined
Kitchen
____ Working exhaust fan that is vented to the exterior of the building
____ Ground Fault Circuit Interrupter (“GFCI”) protection for electrical outlets within 6
feet of the sink(s)
____ Dishwasher: drains properly, no leaks, baskets, door spring operates properly
____ No leaks in pipes under sinks
____ Floor in cabinet under sink solid, no stains or decay
____ Water flow in sink adequate
____ No excessive rust or deterioration on garbage disposal or waste pipes
____ Built-in appliances operate properly
____ Cabinets in good condition: doors and drawers operate properly
Bathrooms
____ Working exhaust fan that doesn’t terminate in the attic space
____ Adequate flow and pressure at all fixtures
____ Sink, tub and shower drain properly
____ Plumbing and cabinet floor under sink in good condition
____ If sink is metal, it shows no signs of rust, overflow drain doesn’t leak
____ Toilet operates properly
____ Toilet stable, no rocking, no stains around base
____ Caulking in good condition inside and outside of the tub and shower area
____ Tub or shower tiles secure, wall surface solid
____ No stains or evidence of past leaking around base of bath or shower
Miscellaneous
____ Smoke and carbon monoxide detectors where required by local ordinances
____ Stairway treads and risers solid
____ Stair handrails where needed and in good condition
____ Automatic garage door opener operates properly, stops properly for obstacles
Basement or Mechanical Room
____ No evidence of moisture
____ Exposed foundation; no stains no major cracks, no flaking, no efflorescence
____ Visible structural wood: no sagging, no damage, no decay, no stains, no damage
from insects, sills attached to foundation with anchor bolts
____ Insula tion at rim/band joists
Crawl Space
____ Adequately vented to exterior
____ Insulation on exposed water supply, waste and vent pipes
____ Insulation between crawl space and heated areas, installed with vapor barrier
towards heated area
____ No evidence of insect damage
____ No evidence of moisture damage
Plumbing
____ Visible pipes: no damage, no evidence of leaks, no signs of stains on materials
near pipes; drain pipes slope slightly down towards outlet to septic/sewage system
____ Water heater: no signs of rust, vented properly, sized to produce adequate
quantities of hot water for the number of bedrooms in the house.
____ Water pump: does not short cycle
____ Galvanized pipes do not restrict water flow
____ Well water test is acceptable
____ Hot water temperature between 118 – 125 degrees Fahrenheit
Electrical
____ Visible wiring: in good condition, no “knob-and-tube” wiring, no exposed splices,
cables secured and protected
____ Service panel: adequate capacity, all cables attached to panel with cable
connectors; fuses or breakers are not overheating
____ No aluminum cable for branch circuits
Heating/Cooling System
____ Appears to operate well throughout (good air flow on forced hot air systems)
____ Flues: no open seams, slopes up to chimney connection
____ No rust around cooling unit
____ No combustion gas odor
____ Air filter(s) clean
____ Ductwork in good condition
____ No asbestos on heating pipes, water pipes or air ducts
____ Separate flues for gas/oil/propane and wood/coal
Posted on August 6, 2019 at 9:06 pm
Anil Aggarwal | Category: Buyers, Home Inspectors | Tagged

What is a 6-D

 

Answer: a 6D certificate is a notarized document which is required for most sales or refinancing of condominiums.  This document needs to be completed by a unit owner’s closing date.  A 6D Certificate provides a bank, mortgage company or attorney the information that  ALL BALANCES ARE PAID and that the association is not due any fees prior to the refinancing or sale of a condominium. 6d Certificate. The term “6d” certificate refers to that statutory section of the Condominium Act, section 6 (d). Lenders and their closing attorneys will require a “clean” 6d which states there are no unpaid fees. The recording of a clean 6d certificate will prevent the association from ever filing a lien against that unit.

If you are selling or refinancing your condominium you must take the following steps in order to obtain a 6D certificate:

1.  Sign an Information Release Form at the Mgmt. Office. 

This form allows Mgmt. to answer questions for attorney, brokers, mortgage companies and appraisers that may be a part of your sale or refinance.

2.  Notify the office of the closing date along with the name and contact information for the New Buyer.                                          

For a refinance, closing date alone will suffice.

3.  Once a closing date has been determined, then discuss amount and checks with condo management office.     

4.  Please be reminded that a 6D certificate takes 2 weeks or 10 business days to process.  

 

 

Posted on August 6, 2019 at 3:43 pm
Anil Aggarwal | Category: 6D certificate | Tagged

Buyer’s Closing Checklist

The day has finally come and it’s time to close on the purchase of your property. You will need to bring the following to the closing:

  • Funds For Closing. If you need to bring cash to the closing, you must bring to closing a bank or certified check PAYABLE TO YOURSELF for the balance of the figure shown on line 303 on your HUD-1 Settlement Statement: Cash From Buyers. This is for fraud prevention, and you’ll endorse the check over to the closing attorney at the closing. The closing attorney should provide you with this number at least 24-48 hours prior to closing. Accordingly, if you need to move funds around from investments accounts, etc., do so well in advance of the closing, and be prepared to make a bank run to obtain that bank/certified check!
  • Homeowner’s Insurance Binder. At closing, you need a homeowner’s insurance binder showing the first year premium paid. If you are purchasing a condominium unit, you will need to provide with the Master Insurance Binder, and depending on the type of loan you use, you may need an HO-6 policy covering the interior of your unit. The closing attorney will typically get an insurance binder ordered ahead of time, but this should be on your “to-do” list.
  • Your state issued driver’s license with picture or other picture identification. Some lenders now require a second form of i.d. Your closing attorney will advise you of this.
  • If a sale of your present home is required by your new lender, you must bring the HUD-1 Settlement Statement and a copy of the Deed from that transaction.
  • Good Faith Estimate. You should bring the Good Faith Estimate of closings costs that your lender originally provided to you during the loan application process. That way, you can ensure that the final closing costs match up to those originally quoted to you.
  • Draft HUD-1 Settlement Statement. You should have received a preliminary HUD-1 Settlement Statement from the closing attorney’s office. Due to lender delays, it is not uncommon to receive this the night before or the morning of closing, although this is obviously not ideal. Compare the prelim HUD to the HUD you are signing at the closing table.
  • Your Smile. Yes, bring your smile. It’s a happy day, and despite all the tumult and stress you are finally purchasing your home!
Posted on August 6, 2019 at 3:26 pm
Anil Aggarwal | Category: Buyers Check List | Tagged

Generation Z – Millennials and their buying habits

Millennials and their buying habits have been under the scrutiny of the real estate industry for years. We’ve watched them go from a minority to the largest group of buyers in the market, but now is taking its first steps into the housing market, and it’s time we learned more about this new group of first time buyers.

In an effort to do just that, Homes.com polled more than 1000 adults from Generation Z aged 18 to 24 years old. Questions focused on Generation Z’s expectations about the home buying experience and their home buying plans.

About Generation Z

Members of Generation Z were born between 1995 and 2012, placing the oldest members in their early 20s. They came of age in a digitally connected world, during an era of full employment, which may give them a more positive financial outlook compared to Millennials. Generation Z could include as many as 75 million people, which makes them a larger generation than the Millennials who came before them.

Generation Z is also the most diverse generation in modern history, and a majority of Gen Zers would prefer to live in an ethnically and racially diverse community.

Real Estate Agent Expectations

The great news is that nine out of ten Generation Z adults are planning to use a real estate agent when they buy a home, meaning plenty of upcoming business for those who can attract Gen Z buyers.

Twenty-seven percent of Generation Zers agree that “understanding what I want” is an important quality in their real estate agent. Knowledge of the local market (18 percent) and experience (15 percent) were also noted by Generation Z as very important qualities in an agent. Only 9 percent noted the importance of negotiating skills and just 7 percent considered the cost of working with their agent an important factor.

hdc gen z is buying their first homes 2

Home Buying Expectations

While 86 percent of those surveyed expect to buy their first home before they turn 35, the current overall homeownership rate across all generations is just 64 percent. However, those polled seem to understand the obstacles they are facing. Forty-two percent listed making enough money to afford a home as their top barrier to homeownership, with the second and third most cited obstacles cited being saving for a down payment (21 percent) and student loan debt (20 percent).

Down Payment Expectations

Most Generation Z buyers expect to put at least 11 percent down on their home, while a full quarter of those surveyed expect to save 20 percent of their home’s cost up front. Slightly over half of those surveyed believe that they will need to save for two or three years to save that amount unless they get some financial help from friends and family. However, the average first time buyer only offers 6-7 percent for their down payment. Informing Generation Z buyers about low down payment options could help them get into their first homes sooner.

To view the original article, visit the Homes.com blog.

Posted on July 29, 2019 at 5:14 pm
Anil Aggarwal | Category: Generation Z | Tagged