Real Estate Information Archive

Blog

Displaying blog entries 1-4 of 4

What is a Good Credit Score?

by The Pat Wattam Team

 

Your Credit Score

What It Means to You as a Prospective Home Buyer

Introduction

The subject of credit scoring has become an increasingly hot topic, and for good reason. For many years, the general public only associated the concept of credit scoring with the need to purchase high−ticket items such as  a new car or a home. Today, credit scoring goes much further. Your credit score can affect your ability to get a good rate on commodities such as car insurance, cell phones, or even determine whether or not you get the job that you want. Indeed, the financial snapshot provided by the credit score has also become a gauge for many employers, especially those who seek to place employees in a position of financial responsibility.

The History of Credit Scoring

The credit score system used today has evolved since the 1960s. It was originally designed to provide lenders with financial profiles on consumers who wished to borrow money. The lenders' biggest concern was whether or not an individual had the ability to repay a loan, and establish what percentage of risk might be involved. Congress passed the Fair Credit Reporting Act in 1971 to establish guidelines for fair practices in regard to the use of credit scoring. This law was designed to promote accuracy in reporting and protect the privacy of consumers. In light of the increased use of credit scoring and a growing fear of identity theft, recent legislation has been passed to further protect Americans and improve consumer awareness. The Fair and Accurate Credit Transactions Act of 2003 (sometimes referred to as The FACT ACT or FACTA) was signed by President George W. Bush on December 4, 2003. This amends the Fair Credit Reporting Act, and provides each American the ability to obtain one free credit report every 12 months from each of the three main credit reporting agencies (CRAs); Equifax, Experian and TransUnion. Those bureaus have created a central web site, www.annualcreditreport.com, to accommodate Americans who wish to obtain copies of their credit report. Phase in of access to free credit reports from West Coast to East Coast nationwide will be complete as of September 1, 2005. See www.annualcreditreport.com for a zoning map.

Why Your Credit Score is So Important

The credit scoring model seeks to quantify the likelihood of a consumer to pay off debt without being more than 90 days late at any time in the future. Credit scores can range between a low score of 300 and a high score of 900. Most consumers have credit scores ranging between 400 and 800. The higher the score, the better it is for the consumer, because a high credit score translates into a low interest rate. This can save literally thousands of dollars in financing fees over the life of the loan. Only one out of 1,300 people in the United States have a credit score above 800. These are people with a stellar credit rating that get the best interest rates. On the other hand, one out of every eight prospective home buyers is faced with the possibility that they may not qualify for the home loan they want because they have a score falling between 500 and 600. The following chart illustrates how an underwriter interprets the credit score in terms of risk, and how the interest rate is affected as a result. Mortgage lenders consider a score of 700 or above to be very good.

Call Andy Aucoin with Resoure One Mortgage at 225-248-4016 to help you on the road to home ownership today!

It Pays to Be Pre- APPROVED!!

by The Pat Wattam Team

Since the demise of the sub prime Market - and the rules are still changing daily - a smart buyer not only gets prequalified, but takes the time to get CREDIT APPROVED!  Yes, this is an approval just pending appraisal and title search.  It takes a little time but if you have a real approval before starting the home search, you will be in great position for better negotiating (a seller might give a little more on a contract where he KNOWS the sale will go through), particularly if you are in a multiple offer situation! 

 Look at it from a seller's view point.  You make an offer on a house, with your pre-qualifying letter from your lender.  What the seller really wants to know is

 1.  How is your credit - will you be able to qualify to buy the house 

 2.  Can you really get the loan completed on time 

3.  What happens to the purchase of the seller's new home if you don't qualify? 

 4.  Is your lender telling the truth when they say you are pre-qualified - did they actually run a credit check, verify your income and debts, and know where your downpayment is?

We have seen it time after time - the lender assures the listing agent that this buyer will have no problem, then a day or so before closing, the whole thing blows up.  It's distressing to the buyer but can be catastrophic to the seller.  So, when a seller sees a real Pre-Approval, they know they are dealing with someone who is really prepared to buy, and is willing to negotiate with this purchaser!!!

Ask your lender to have you Credit Approved before you start your home search and you will come out a real winner!

May Market Update for the Greater Baton Rouge Area April 2007

by The Pat Wattam Team

Here's a quick Market update for the Ascension Parish Real Estate Market, East Baton Rouge Parish Real Estate Market, and Livingston Parish Real Estate Market.

At the end of April we had a total of 3593 homes for sale, that is 1312 new Listings for the month.

Average list price is now $259, 760 and the Average Days on Market is now 103 Days.

The Closed Property Statistics for the same Parishes:

810 sold in April.  The average list price of the properties that sold was $198,784 and the average sold price was $194,047Average Days On Market for SOLD properties was 67.  The List to Sales Price Ratio was 97.62. 

 It is interesting to note that if we compared the sold properties so far this year to what happened in April, the prices are creeping up just a bit - with the average sold price for this year right at $196K.  Days on Market are holding steady.  As I have said before, as rest of the country has a slow down in their market, the Greater Baton Rouge Real Estate Market continues to thrive. 

As a personal observation, it is still the homes in the best condition that are priced right that sell the fastest.  The market isn't as strong as it once was - it is settling into a nice, well rounded market - and having a house in great condition are key to getting top dollar!

Musical Happenings in Baton Rouge

by The Pat Wattam Team

Did anyone catch the Leo Kottke concert at the Manship Theatre this week?  It was my first chance to attend a program there and what a treat!  A small, intimate theatre - the perfect setting to enjoy such tasty guitar playing, and to enjoy the banter of the artist.  We are so lucky to have such a venue here -not a bad seat in the house - so be sure and catch a performance there soon!

And while downtown, stop in at one of the many wonderful restaurants we have.  Great food and great music!  Downtown Baton Rouge is something to enjoy! 

Displaying blog entries 1-4 of 4

Syndication

Categories

Archives

Share This Page

Contact Information

Photo of Pat Wattam Real Estate
Pat Wattam
RE/MAX First, Independently Owned and Operated
4750 Sherwood Common
Baton Rouge LA 70816
Office Direct: 225-298-6900
Office Main: 225-291-1234
Fax: 225-295-1234

RE/MAX First
Each Office Independently Owned and Operated
Main: 225-291-1234

Licensed by the Louisiana Real Estate Commission