Pay Off Credit Cards Before Buying a House?

A reader (we'll call him Robert to protect the real identity of this comment) wrote in to ask:

Q - "I am thinking of buying a house. I have a credit card with a balance of approximately $3,000. Should I pay this off before applying for a mortgage, or will that hurt my FICO score to pay it off and hacve no balance?"

A - About 60 days before you apply for your mortgage be sure to have that credit card paid off completely. The purpose of the 60 day advance is to make sure your credit reports are updated to show the zero balance. It's somewhat comical that in the year 2009 you have to do it so far in advance in order to ensure that your credit reports reflect the balance, but these are the cards we've been dealt.

If you can do that then your mortgage application won't have any trouble caused by credit scores.

If you have a question or comment about this, or any other article at this site, please feel free to click the comment tab and fire away. Your identity will be protected, and your email address will NEVER be published at this site. We look forward to hearing from you.

Real Estate News - July 2009

Our July 2009 Newsletter is now online for you…

From the right Nav Menu, Find "PAGES AND NEWSLETTERS" and Select "July 2009 below "Our Monthly Newsletters".

Majority Say Housing Prices Will Hit New Records

Despite all the negative news in real estate triggered by the nation's financial crisis, a large majority believe housing prices will rebound and hit record highs again. Nearly 2 out of 3 surveyed say they expect home prices to recoup their losses and reach the record highs attained during the real estate boom.

The Housing Predictor survey indicates that homeowners and would-be homeowners are clearly demonstrating more confidence in the economy regarding real estate than they had been. Some 62% of all those surveyed said they expect home prices to rebound and reach the highs attained during the boom. The survey asked respondents only if they expected home prices to someday reach the record high prices in housing experienced during the height of the real estate boom.

Housing price rebounds are typical of the cyclical nature of real estate patterns. However, traders on Wall Street developed new products to artificially inflate markets with mortgage lenders, resulting in the delivery of an explosive mix for the world's financial markets. Housing analysts contend it will take at least a decade or more for markets to attain the record high housing values, if they ever do again.

Some especially hard hit areas of the country have suffered from average housing deflation of 70% or more as foreclosures rise. More than 4.2-million foreclosures have occurred as a result of the foreclosure epidemic, which is at the center of the nation's economic crisis.

Housing Predictor forecasted the national real estate depression, the foreclosure epidemic and regularly conducts Predictor Polls to gauge consumer sentiment on issues related to real estate. Get the forecast for the housing markets bottom and check on the latest real estate news at housingpredictor.com.

Summertime Grilling Tips

Whether you want to barbeque or grill, these little golden rules for healthy eating and grill safety apply either way:

• Before using wooden skewers, soak them in water for at least 20 minutes before grilling. This prevents them from burning.
• Keep a shaker of seasoning next to your grill. Don't forget to season your grilled food well to create flavorful meals.
• Choose long-handled cooking tools to avoid burns and splatters. A basic grill kit should include long tongs for turning the foods, a stiff-wire brush for cleaning the grill, a mop brush for saucing foods, a large offset spatula for moving delicate items, and a pair of elbow-length grill gloves for protection. Apron, optional.

In addition, you should follow these tips for keeping your grilled food healthy:

• Trim the fat.
• Choose lean meats to grill. Less fat means less dripping down into the flames, which cuts down on flare-ups. Remove the skin from poultry.
• Grill veggies. Try marinated vegetables on a skewer, on the grilling tray or wrapped in foil. Grilled fruit also makes a sweet, healthful dessert.
• Wrap it up. Cooking in foil seals in juices so you can cook leaner cuts until they are both tender and done. Wrap fish with vegetables and a little low-fat marinade for an easy meal, all in one packet.

Enjoy the summer, and happy grilling!

Reverse Mortgage: Is It Right for You?

With housing activity improving in most markets, the time is right for homeowners age 62 and older to see if a home equity conversion mortgage (HECM) might work for them. The loans have been controversial, and they are complicated, which is one reason that consumer counseling is a required component of the HECM loan process.

The downside of a HECM is that fees and closing costs can be steep.  Also, a fair-sized percentage of a home's equity must be set aside to cover future interest payments on the loan funds that lenders have committed to pay to the borrowers.  Some private firms selling HECMs have been charged with misleading and overly aggressive sales tactics.  And some borrowers have been encouraged to use the loan proceeds to make risky or unwise investments.

The comptroller of the currency, John C. Dugan, compares reverse mortgages to subprime loans.  Because borrowers need not provide financial information or credit scores to qualify for a HECM, he noted, it's not clear whether they have the financial ability to maintain the home and stay current on insurance and property taxes.  Failure to do so is grounds for the lender to take over the home, and Dugan urged regulators to develop stronger consumer safeguards to weed out unqualified borrowers.

An official with the Federal Housing Administration (FHA), which oversees the HECM program, says such defaults are less than 1 percent of HECM loans but that regulations will be proposed later this year to require lenders to seek financial information from loan applicants and to include set-asides for home insurance and taxes if they feel the borrower will have trouble keeping up with such payments.

As with any loan of this type, seek the advice of a qualified professional before doing anything!