Archive for May, 2011

Credit Scores Below 740 Cost You More Money

Monday, May 23rd, 2011

When applying for a mortgage, a credit score below 740 will end up in a higher interest rate for you.

Recently I made a $250,000 mortgage for a borrower with a 655 score.  His monthly payment was $54.06 more than he would have paid if he'd had a 740 score.Credit card & casj.jpg

It's important to know what comprises your credit score.

Past payment history makes up about 35% of your score. This includes such things as information from public records on bankruptcies, foreclosures, tax liens, etc.  It also includes your repayment history.

A late payment only a month ago represents a higher risk than a late payment three years ago.

Your outstanding credit balances make up 30% of your score. This is the ratio between what you owe and your available credit limit on an account.

Ideally you’d want to keep your balances as close to zero as possible, definitely below 30% of your credit limit.

Credit history is 15% of the score. This portion of your score represents the time a credit account has been established.

An account history from one to two years will add about three times the points of an account opened less than one year. If the account has been open 2 to 4 years it will yield almost five times that of an account open less than a year.

The type of credit represents 10% of your score. A mix of auto loans, credit cards and mortgages is far more positive than just a concentration of debts from credit cards only.

Finally, credit inquiries represent 10% of the total score. The more inquiries you have during a 90 to 180 day period, the lower your score. Multiple car loan or mortgage loan inquiries within a 30-day period, however count only as one.

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Ham Thorne
Mortgage Planner w/ Directors Mortgage Inc.
4550 SW Kruse Way, Suite 275
Lake Oswego, OR 97035
503-645-7905 direct
971-404-3177 fax

Manage Your Debt to Manage Your Health

Thursday, May 12th, 2011

Money is one of the top sources of stress for Americans. You’ll be healthier overall if your finances are in order. One study found that those with the most health complaints also tended to have the highest debt ratios and to be the most worried about money.

If money is a source of stress in your life, take the necessary steps to resolve any outstanding issues.

·         Keep your bank accounts balanced.
·         Sit down with your family to make a budget.
·         Figure out how much you need to save.
·         Find ways to trim expenses.
·         Make plans to pay down your credit cards.

One of the most important things you can do in controlling financial stress is to know your numbers. You absolutely must know your “Survival Number” – that’s the amount you need to have each month just to pay all the bills. Contact me to request a simple tracking form to use for this.

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Ham Thorne
Mortgage Planner w/ Directors Mortgage Inc.
4550 SW Kruse Way, Suite 275
Lake Oswego, OR 97035
503-645-7905 direct
971-404-3177 fax

PMI Tax Deductibility Extended Through 2011

Monday, May 9th, 2011

There's great news for homeowners! Congress recently extended legislation making private mortgage insurance (PMI) premiums tax deductible through 2011!

So why is this significant? PMI can help people buy a home sooner, by enabling them to put less than 20% of the purchase price down when buying a home. This increase in purchasing power can sometimes be the difference between affording the home of your dreams…or not.

What's more, this deduction is not just for first-time homebuyers, so it can be used by current homeowners looking to upgrade to a new home. However, it does only apply to "qualified" residences, which typically include a primary residence and a vacation home, but not an investment property.

It's important to note that PMI is only tax deductible for homeowners with adjusted gross incomes of less than $110,000. Borrowers with adjusted gross incomes up to $100,000 may be able to deduct 100% of their 2011 premiums. Deductions are phased out in 10% increments for borrowers with adjusted gross incomes between $100,000 and $109,000.

As with any deduction, be sure to consult your tax advisor if you have any questions. And if there's anything at all I can do to help you with your mortgage, please let me know. I'm always happy to do whatever I can to make sure your mortgage is working for you!

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Ham Thorne
Mortgage Planner w/ Directors Mortgage Inc.
4550 SW Kruse Way, Suite 275
Lake Oswego, OR 97035
503-645-7905 direct
971-404-3177 fax

Window of Opportunity Has Opened

Thursday, May 5th, 2011

I wanted to reach out to you before it's too late. You may have heard that home loan rates improved, reaching some of the best levels so far in 2011. In fact, I've been slammed with emails and phone calls from people just like you who wanted to take advantage of this wonderful situation.

But there's one important point you should understand…

The slowing in our economy is one of the main reasons rates have improved recently, but it's important to note that the last time rates hit this level, they jumped significantly higher from here. What's more, signs of inflation are beginning to creep into our economy, and that never bodes well for home loan rates. That's why it's more important than ever to act now.

It will only take a minute – give me a quick call so we can look at your situation. Doesn't cost anything to check it out, and the choice of moving forward will be up to you. Don't miss this window of opportunity to save significantly on your monthly budget.

I look forward to hearing from you!

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Ham Thorne
Mortgage Planner w/ Directors Mortgage Inc.
4550 SW Kruse Way, Suite 275
Lake Oswego, OR 97035
503-645-7905 direct
971-404-3177 fax

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