5 Powerful Buying Strategies
1. Don't Get "Pre-Qualifies!" Get "Pre-Approved"
Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller, In years past, we always recommended that buyers get "pre-qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronouces you "pre-qualified" and isues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here's why! None of the information has been cerifies! Unknown problems can surgace for example: recorded judgement, child support payments due, glitches on the credit report (due to any number of reasons both accurately and inaccurately), down payment funds that have not been in the client's bank account long enough, etc. So the way to make a strong offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon we recommend all of our clients have in their negotiating arsenal.
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Raise Your Credit Score 100 Points in 45 Days
1. Paying a collection account can actually reduce your credit score, here's why:
The credit scoring software looks at the date of last activity on the credit report to determine what effect it will have on the credit score. Collection agencies will update your credit report to say "Paid Collection" whenever you pay a collection. This will in turn make the date of last activity current and the credit scoring software sees it as recent collection activity and lowers your score as a result. This is a flaw in the scoring software that is unfair but it is something you have to work around when trying to maximize your score. The best way to handle this problem is to contact the collection agency and tell them that you are willing to pay but you want a letter from them stating that they will delete the account if you pay it. Some collection agencies will do this, some will not, but getting the account completely deleted will increase your score and is definitely worth the effort.
2. Past Dues destroy a credit score.
If you look on your delinquent accounts showing on your credit report you will see a column called "PAST DUES". If you see an amount in this column I suggest paying the creditor the amount that shows. Credit scoring software penalizes you for having accounts with an amount in the past due column.
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Top 10 Reasons Loan Applications Are Rejected
Getting a loan application approved is often knowing how to keep lenders from saying "no". To that end, here ae the Top 10 reasons loan applications wind up the circular file. There are more, but these top the list.
- Being in denial about what you can really afford. Apply for too much and you could be out the door faster than you went in. Let the lender decide what you can afford to borrow. From that, you decide what your budget will realistically let you afford to pay each month Get pre-approved with a bona fide, carved-in-stone pre-approval that guarantees in writing a loan amount, interest rate and as much of the other loan terms as possible.
- Poor preparation. The more information you have available at application - proof of income, investments, assets, debts, tax returns for the self-employed, even addresses, current and past - the more complete the loan officer's analysis can be in a more timely manner.
- Misunderstandings. You may need loan programs explained. Industry jargon about an "index," "margin," "T-bills" and other terminology is familiar to real estate and mortgage professionals, but likely not you. Your loan representative can help you with any terms you may not be familiar with, you can visit many online glossaries or pick up one of many real estate mortgage books, virtually all of which contain a glossary.
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What is a Self-Directed IRA?
A self-directed IRA is no different than any other IRA. Having a self-directed IRA simply means you are allowed to direct the investments of the IRA. Many custodians claim they allow you to self-direct your IRA investments, but then turn around and restrict what you can invest in. A truly self-directed IRA allows you to make the decisions without restriction.
What can I invest in if I have a Self-Directed IRA?
The investments that you make outside your IRA can now be made within it. You the investor have tremendous flexibility to make the investments of your dreams.
What types of retirement accounts can be moved into Self-Directed accounts?
Traditional IRAs, Sep IRAs, Roth IRAs, 401(k)s, 403(b)s, Coverdell Education Savings (ESA), Qualified Annuities, Profit Sharing Plans, Money Purchase Plans, Government Eligible Deferred Compensation Plans, Keoghs
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Buying a short-sale property
In the recent past, the inventory of homes for sale was pitifully low. Now, the number of homes for sale has increased in many areas. However, there are listings being offered for sale on less-than-advantageous terms. An example is the so-called "short sale."
In a conventional home sale, the buyer usually needs only the seller's acceptance in order to go forward with a transaction. However, in a short sale, the lender's approval is also needed in order for the sale to close.
A short sale occurs when a property sells for a price that is insufficient to pay back the loans secured against it and the seller's closing costs. In such a case, the sellers either have to come up with enough cash to cover the shortfall, or their lender(s) must agree to forgive the amount that the sellers are short in order for the sale to go through.
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