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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! 

Prices Continue to Decline in the Beach Market

by The Pat Wattam Team
Wow!  What a great time to take advantage of the market on the beach!  Whether you want to go to southern Florida or the Alabama Gulf Coast, this is a great time to buy.  We have found some great deals from Go Beach Realty in Gulf Shores, AL.  They shared with us a cottage acorss the street from the beach in West Beach for mid $160's, a condo across the street from the beach at Romar for under $200K, and then a place on the beach for under $400,000!!!!  What a great opportunity to own a vacation home for you to enjoy!  When you realize that no matter what hurricanes bring, there is still only so much beach property - a limited supply- and if you ever wanted to buy, now is the time!  Call me today and tell me what you would like, and I will find a great Realtor for you in that area!

Updated Market Statistics for First Quarter 2007

by The Pat Wattam Team

It's interesting all the news in the paper that our Market is down 21% compared to last year.  I guess numbers say whatever you want them to say. I also know that those of us working in this market day in and day out may have a different take on the activity than the numbers show.  Let's look at the first quarter of 2006 vs 2007, putting East Baton Rouge, Acsension, and Livingston Parishes as our market.

Year        New Listings      Sold Properties         Average Sold Price       Average Days on Market

2006       3260                       2454                            $174,092                           76

2007        3712                       1904                            $191,035                           67

Compare these numbers to the entire 2006 year end stats:

2006      13,542                      10,293                         $186,964                            65

While it is true that our closings are down so far for this year, the days on market statistic is stable, and the average sold price keeps climbing - a nice steady growth.  Everyone who thought our market would have crashed by now knows that isn't going to happen soon.  Are some price ranges stronger than others?  Sure!  But that was always the case.  We have a very healthy real estate market in our area.  It's a great time to buy and sell property - so call me today and let's get started!!!!

Greater Baton Rouge Market Statistics as of March 1 2007

by The Pat Wattam Team

The Greater Baton Rouge Real Estate Market continues to thrive.  Interest rates are remaining low and I believe that has helped our market to stay strong.

STATISTICS:                                    Jan/Feb 2006                                             Jan/Feb 2007

Number of New Listings:                             2244                                                           2371

Number of Pending Sales:                          2325                                                          1830

Number of Sold Properties:                         1624                                                          1128

Average Day on Market:                                    79                                                                67

Average Sales Price:                             $170,186                                                   $189,446

The main thing I noticed is that the avearage sales price moves up and down quite a bit each month, and that the number of Listings remains steady.  If you are curious about what the value of your home is - a generic market analysis by subdivision - go to www.housevaluesbatonrouge.com.

Make Your House Stand Out!

by The Pat Wattam Team

It's time to think about selling the house.  Where do you start?  At the front, of course!!!  A house with excellent curb appeal will bring in the buyers AND, if you have really beautiful landscaping, it can help bring in a higher offer.  "Why?" you may ask.   Think about it, it's like the wrapping on a package.  If you have two packages with the exact same gift inside but one with pretty wrapping and one with no wrapping, which one do you PERCEIVE to be more valuable?  It's the same with houses. 

Neat flower beds with fresh mulch and some colorful plants can make a drab time of year - well, prettier!!!  Prune the trees, edge the walks and you are ready to go.  Oh, don't forget the backyard too.  It is pretty strange when you see a house with a beautifully landscaped front yard and then nothing in the back!!!

Now, if you have done your job well, and you have people wanting to view your home for sale, you better make sure the inside looks as good as the outside!!!  More about this later!

Boomers Starting to Retire

by The Pat Wattam Team

Not that it's any big news, but the first of the boomers are beginning to retire.  Many of them are choosing to retire to a nearby recreational area - someplace where they can be close to family, and a metropolitan area, but also a place where they get to kick back and enjoy the life they have worked so hard for! 

As beach front, lake front, and other water front properties dwindles in numbers, these boomers will search out other places that offer a great view!  Perhaps that is why Arkansas and N Carolina are doing so well!  The trend shows that boomers are starting to purchase homes in areas they have vacationed in for years, and perhaps even own a second home but now want to move there permanently.

Have you wondered where you would enjoy having a second home or retiring?  Check out www.bestplaces.net.  Fill out a questionaire and see what part of the country will help you select what part of the country to move to for that life of your dreams!

Housing Bubble....Myth or Media Hype?

by The Pat Wattam Team

At the Louisiana Realtors Meeting last week, the speaker discussed the changing real estate Market around the country.  As agents and companies around the country were polled, it was discovered that although sales in some areas are off, that overall, housing prices are still on an upward trend!!!  The media hype over the 'real estate bubble'  causes buyers to pause, waiting for the prices to drop significantly - and while waiting, the interest rate can rise, and the house they really want, but want to wait until the price comes down, as they are told it must, will sell to someone else!!

It's interesting how the media can make a story, even when there isn't one there.  The first thing that comes to my mind is the Millennium and all the doomsday predictions!!  Of course, I chose to head to Hawaii, because if all the power were to go out, and all kinds of computers crash, I figured what better place to be than Hawaii!!  Oh, then I remember back to 1974 when we had the 'gas shortage' and years later we find out that that wasn't the truth either - but maybe we can't blame that on the media!

The only way to know what the real estate market is doing is to take a look at historic trends.  If you look back over the past 20 years, the ONLY time there was a real housing downturn all around the country was during the energy crises in the '80's.   The rest of the graph is a steady growth, with a few dips here and there, but still heading up - much like the stocks!

Displaying blog entries 401-410 of 414

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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