Repairing a Low Credit Score

There are a couple points to make at the outset.  First, there are no easy fix, fast track methods to repairing and rebuilding poor credit.  It… just… takes… time.  Remember your credit score (and report) reveal your track record of managing payments.  If your score is a consequence of your actions, time is how your score will be repaired.  You didn’t drop to a low score overnight, even if “life” did happen (job loss, health problems, divorce, etc.).  This situation took time.  Don’t expect to bounce back to a 780 score overnight.  You need time to prove your ability to manage your finances and to pay expenses responsibly. 

The second point is to avoid unscrupulous credit repair service companies.  These companies often prey upon unsuspecting consumers promising to “fix” someone’s credit and to remove unfavorable information for “3 easy payments of $49.95”.  Nothing could be farther from the truth.  While errors on reports are not uncommon, truthful information no matter how unsavory cannot be removed.  If a bankruptcy or foreclosure happened, it will be reported and will be there for some time.  If you have a credit score, you are an adult.  Let’s not whine about a low score, let’s be proactive and start on a better path.  (If you have not reviewed your credit report in some time, visit http://www.annualcreditreport.com/ where you can receive a free report with your current scores once every 12 months.)

Okay, so you are behaving.  Your bills are paid as promised, you have a very low debt to income ratio, manage your money well and stick to your budget, and learn your credit score is not where you expected it to be.  Now what??

Start by reading your credit report.  Is the information listed correct?  Many times a keystroke error is all it takes to suddenly combine someone else’s credit history to yours and negatively affect your score.  If you are a “Jr.” or “Sr.” you can certainly understand this scenario.  Other times it may be that a debt has been fully paid and the creditor has stopped reporting the information to the credit bureaus so that a remaining balance still shows. 

If you believe your credit report contains an error you have the right to contact the credit bureau that reported it and dispute the information.  There is no cost to dispute this information and it isn’t complicated.  The best way to communicate with any credit bureau is in writing.  (Our website contains a sample dispute letter you can use.)  Provide your complete name and address, the item(s) in question, why the item is being disputed, and your request to have this corrected or removed.  Include a copy (never the original) of the documentation you have supporting your claim and a copy of your credit report with the items in question circled.  Keep a separate copy of everything you are sending to the bureau along with a diary of any activity, conversations and contacts. 

The reporting credit bureau has 30 days to investigate the disputed information and provide you with a written report of the findings.  The bureau is also required to send you a copy of your updated credit report if the disputed item has been changed as a result.

In general with time, a solid financial plan, and some perseverance you can repair, build and maintain your own credit standing.

Tales of a Home Buyer – part 5

Written by Shawn DeVries

My Loan Officer now took my file (all 7,000 pages at this point) and submitted it to the underwriter for them to review and verify.  I was feeling a little more confident at this point that the loan would go through smoothly.  However, the first part of this process is not just for the underwriter to approve the loan, but to also to gather more information (called conditions) if needed to support their decision.  It’s kind of like the kid on the playground who says, “Oh yeah? Prove it!” when you say you can do a handstand or something else you can no longer do at age 39.  (There’s a whole other story there.  Don’t ask.)

I am happy to report; my loan was approved by the underwriter with minimal conditions.  Those were submitted and my Loan Officer and Title Agent were soon given the all clear sign to get the final documents ready for the closing.  If you think the papers you signed for your application were excessive, you haven’t seen anything yet.  Some of the documents are the same ones you signed for the application.  You get the privilege of signing those again.  Others are new forms that detail your loan and how you will repay it.  Then there are others that give you important information about the whole transaction, and then even more that verify you were given that information.  As you may have guessed, there were a couple politicians and lawyers involved in determining the process for buying (or even refinancing) a home.  I highly suggest a big breakfast before and a hand massage after the closing.

The day of my closing seemed to never come.  The dream of owning my own home was finally here after almost 3 years of planning and hard work.  The moment the keys to the front door were placed into my hand was, as they say, priceless.  Owning a home is not just the purchase of piece of property.  A home is where you raise a family, share memories, retreat from the world.  It is an investment unlike any other.  Stocks and bonds can never hold the emotional ties that a house does.  A home is not just brick and mortar; it is a part of who you are.

We, at Awareness Home Funding, have always said we had one of the best careers there is.  It is a high honor to help someone with the most significant transaction in their lives.  We’ve been through the process – not just as loan officers and processors, but as home owners ourselves.  We haven’t forgotten the feelings and emotions attached to the address.  I’ve shared my story, and you have (or will have) your own.  The point in sharing mine is that we understand, completely, and are here to help you with compassion and expertise.  We’d love to be a part of your unique story and happy ever ending.

Tales of a Home Buyer – part 4

Written by Shawn DeVries

After getting the purchase agreement signed I again pulled the needed documents for my Loan Officer.  (Yes, all 4,000 pages because 3 months had passed and updated information was needed.  We really do understand what buyers are feeling.) My information was entered into that program again that analyzes the data and based on preset criteria makes a decision on whether or not to approve my loan.  This “little” program can really freak you out sometimes, and all for no apparent reason.  

Ironically the same feelings can occur when you are refinancing your home.  These transactions are big deals and are a significant portion of your personal financial status.  It is no surprise that a borrower will feel some angst that is in direct proportion to their emotional investment to the home.  Highly emotional people will be highly invested into the process.  (I would like to say at this point that in case you have not guessed, I am a passionate person.  My mom will probably describe me in other words, but let’s not get her anymore involved than she already is, okay?)  Fortunately, these results came back just fine too on my loan.   

The next part was to develop my case in order for my Loan Officer to submit my file to an underwriter.  At this point in the home buying process your lender has gotten to know you fairly well.  They understand your financial situation and know what your goals and dreams are.  At least your lender should want this home for you as badly as you do.  If not, find out why.  The underwriter however does not know you.  All they have in front of them are numbers to compare and analyze.  The documents you submit need to tell your story for you.  Share what you need to support their decision so they see you as a low credit risk. 

Shortly after my offer was accepted and the paperwork fun began, I had a full inspection of the home done.  I was relieved to know there were no major issues to resolve or problems to fix.  For a home that was over 45 years old it was in amazing condition.  Getting an inspection is a crucial step in buying a home.  You want an expert without emotional ties to give you an unbiased opinion of what you are buying.  Follow them on the inspection.  Look at what they are looking at, poke where they poke and ask lots of questions.  A good inspector will tell you what needs attention and what is good with the house.  They should be able to also tell you how serious an issue is.  Telling you your furnace is getting old isn’t very helpful.  Letting you know the average life expectancy of a furnace and verifying the age of your unit is helpful.  Letting you know where your unit is beginning to show signs of wear is also beneficial.  Take good notes while on the inspection, but also get their findings and recommendations in writing.

Title work is another major piece in the process.  The title agent confirms that there are no liens against the property that would prevent the house from being sold.  It also confirms who the rightful owner(s) currently is (are), that property taxes are current, and prepares the paperwork so that there is a smooth transfer of ownership (among many other steps).  Title agents are also a great partner to have when buying a home from a trust (like I did), out of a foreclosure or short sale or any other transaction that may involve a bit more documentation.

The third significant step that happens at this point is having your home appraised.  Your lender wants to know the true market value of the home you are buying.  This doesn’t mean they are checking on how well you negotiated and if you got a good deal.  They are looking to protect their investment in you.  This house will be the collateral on the loan.  A lender does not want to lend more than what the property is worth.

After a slow start in finding my dream home, the loan process went very smoothly.  Supporting financial documents?  Check.  Good inspection?  Check.  Appropriately appraised home?  Check.  Title clear and without liens?  Check and check again.

Tales of a Home Buyer – part 3

Written by Shawn DeVries

Not long after, that call did come.  A friend of a family member was selling her parent’s home and was looking to her contacts first for potential buyers.  Fortunately, besides just looking online and in papers, I had told my family and friends that I was shopping for a house.  I also told them what I was looking for and to keep their eyes open for me.  When those big steps in life come up, it is important to enlist the help of those who know you best.

The sellers were selling the property by themselves without a realtor. (A For Sale By Owner.)  Had I not been employed by a lender I probably would not have considered this prospect.  I wondered how much experience they had in selling a home.  I wondered if they had any help lined up to handle this transaction. Yet, while I had some serious concerns I also figured that at this point I was only looking at the place.  So off I went. 

Remember that houses have personalities all their own?  This one was warm and inviting.  This place had character and charm.  This house could easily become my home.  I let them know I was interested but left myself an out.  With spring break coming I would be out of town.  So we made arrangements to talk again after my vacation and that if any other offers came in they would call me to see if I really wanted the place.

During my vacation I could not get that house out of my mind.  By the time my short hiatus was done, I had the place re-carpeted with new laminate flooring, fresh paint and my furniture all neatly placed inside.  This was all in my head of course, but I was hooked.  Again we set an appointment to meet and I made them an offer.  While they remained cool and asked for time to deliberate I was given a good feeling when I left. 

They called first thing the next morning to ask where to fax the signed agreement.  I was screaming with excitement!  I had found a house.  (I was actually screaming inside since I was at work, but I was still really, really excited.)  Now the real work began.

Tales of a Home Buyer – part 2

Written by Shawn DeVries

From all I have read and been told this was my market.  Houses are in large supply, foreclosures are around every corner, prices have come way down; I would have a huge selection to choose from.  Or so I thought.  While there were plenty of homes on the market, not all of them fit my criteria or needs. 

Now let me stop just a moment and say that there is a significant difference between needs and wants when buying a home.  I may want something from the pages of Better Homes & Gardens, but I need a roof over my head that won’t fall over at the slightest breeze.  I may want a master suite with garden tub and walk-in closet, but what I need are three bedrooms and toilet that won’t leak.  You understand.  Dream about that perfect house and go for it, but make sure your dreams align with reality.

Ok, so off I went to start shopping, real shopping.  Up until now I had been just window shopping – looking on line, driving through neighborhoods, leafing through the newspaper.  Now was my time to go inside the houses and really take a good look.  I was crushed!  I was looking at mostly foreclosure homes and expected some dirt and debris in these vacant places.  What I found was absolute filth, half-completed and poorly constructed projects, and plain shock as I wondered how anyone could live this way.  Didn’t their mother ever show them a broom?!  What were these banks thinking in even listing a house in this condition?  These were not just small projects to make a house my home.  I was looking at major repairs perfect for the HGTV shows like “Over Your Head” and “DIY Disasters” where some poor home owner has bitten off way more than they could chew.  Uuugh!

However I was determined.  (Remember I am living with my parents so being a motivated buyer doesn’t even come close to describing my drive to get this accomplished.)  As I looked, I started to expand my criteria; and searching online makes this process very simple to do.   In adding condos to my list of options, I soon found one that seemed to fit.  I made an appointment to see the property and fell in love.  While I would need to make some slight modifications, it would work for me.  Best of all, I could actually picture myself in the place. 

It sounds a little odd to say, but houses (and condos) really do have personalities.  When you walk into a place for the first time there’s a certain feeling that you receive.  Some places feel cold and sterile, others warm and inviting.  There are properties that exude formality and structure, and others that say this place knows how to throw a good party.  This condo seemed to work for me.  So I wrote an offer. 

My offer was admittedly low.  However, being in the industry I knew about some limitations some lenders have on properties being flipped as this one was.  So I made my offer supported with documentation and waited to see what would happen.  The wait, while only a few hours, was excruciating.  What are they thinking?  Do they understand my offer?  Can they see that I am a good buyer?  Why would they not accept my offer?  Are there other offers being considered? 

The answer came back swiftly with a simple, “pass”.  The response felt like a sucker punch to the gut.  But why?!  This makes perfect sense to me.  What’s your problem anyway Bub?!  Regardless of my feelings, this place was not the one I would eventually call home.  So my search continued.

I found another condo in the development that offered a bit more of what I wanted on my wish list, and another offer was made.  This offer felt different.  I was more guarded to the response.  I was hopeful, but prepared for a “no”.  I liked this place too, but was not nearly so in love with it.  Maybe I was preparing myself for rejection yet again.  Maybe I was starting to get desperate.  I hoped not.  The offer came back.  Again it was declined, but at least this rejection offered a rationale.  Another offer had been submitted earlier in the day and the seller had already accepted that offer.

At this point, I was beginning to doubt of whether my dream of home ownership would ever come true.  Where was the place I would call home?  Whoever had it, needed to call me…soon.

Tales of a Home Buyer – part 1

Written by Shawn DeVries

Let me start by saying that this was not my first time.  Not only have I purchased a home before, but I have obviously been on the selling side of the process.  I have experienced a refinance and even rented for a period in my life.  I now work in the lending industry and know the process of buying a home and what to expect.  Yet, I still experienced the same stress, fear, anxiety, worry, excitement, joy, anticipation and ultimate relief that every other home buyer and owner experiences when going through this process.  My emotional range may have something to do with me doing this as a single buyer this time, but I felt it all just the same.

If you are considering purchasing a home, you may wonder just what this journey is all about.  I thought you might like to know.  If you fully understand this process please don’t disregard this series, for I know you will find warm memories and at the very least some great humor as I relate my story to you.

My story really begins nearly three years ago.  After a divorce I relocated back home to start my life over again.  Let me set the stage very clearly by adding that “moving home” was taken quite literally by moving back into my parent’s house.  Oh yeah, I did it.  God bless my parents, for despite their honest intentions and good will, I really don’t think either of us knew what this would all entail.  Most of my belongings were packed into storage with the remaining pieces finding basement corners and emptied closets.  I was prepared for this journey to start over to take some time, but not quite this much time.  Let the fun begin.  Oh, did I mention I have two children in tow?  (I told you my story would have humor.  Ha!)

Fast forward now through the past three years as I find a new career, pay off debt, and save some money all in preparation of buying my own home.  When January of this year finally came, I was ready to go home shopping!  I thought this day would never come.  I knew to take care of my credit over this time and felt it was in great shape.  I had money set aside for the down payment, plus some for reserves.  I had crunched the numbers and knew not only what I could afford, but what I wanted to afford.  Yes, I am a little anal about details sometimes, but I was preparing to buy a home and I wanted no surprises.

Knowing that the first step in buying a home is to get pre-approved I started by gathering my documents (yes all seemingly 4,000 of them) and verifying the information (just short of the blood work) for my Loan Officer as he prepared to pull my credit report.  Despite having a good clue of what to expect, that 15 seconds between him hitting “submit” and seeing the actual report can feel like eternity.  What are my scores?  Did I really behave?  Will that oops from 5 years ago show up now?  What surprises will he find?  Oh please, oh please let my score be above that golden 640 so that I can shop for a house.  See?  Even people who work for lenders have real emotions and understand the angst our clients endure.

Well the report appeared.  Great scores, good behavior paid off, no glaring marks, no surprises, and above the benchmark score needed.  Whew!  My information was then entered into a program that analyzes the data and based on preset criteria makes a decision on whether or not I could be approved for a loan.  However to the borrower the answers feel like: go away you are only kidding yourself; we had better have someone else take a look at this because we’re not so sure; or yeah, we can do that… provided nothing weird happens.  I was relieved to learn that my information was approved.  My pre-approval was then written and off I went to find my house.  This would be a snap.

Why Do You Run?

Awareness Home Funding shared in our April e-newsletter that three of our employees are participating in the 2011 Riverbank Run.  They are running not only for personal reasons, but to also help In The Image and their S.H.O.E.S. program which provides shoes for at-risk students in three area school districts.  Last year they helped 9,000 kids and have a goal of helping with 12,000 pairs of shoes this year!

A link for each member of the Awareness Team is included if you would like to help area kids by supporting their run.  Let us introduce them to you.

Robin Baker began running 16 years ago because of the positive influence of her father, Al Owens.  Al has been very involved in the Grand Rapids racing community for over 35 years and has passed the passion to his daughter.  Robin also likes the aerobic base it gives her for all the other activities she enjoys.

This year Robin is participating in the 5k race.  Her main goal:  to run and have a good time with her friend Shanna and to pass the passion to Shanna’s son, Kendrick.

Robin said she particularly loves the Riverbank Run because it is a great race with high energy.  “I grew up in the crowd as a little girl, waiting at the finish line for the first, second and third places to come through” shared Robin.  “You always knew when they were approaching because you could hear the roar from the crowd getting closer and closer.  And then I would wait for my dad to finish, which he would never do until he found my mom in the crowd and stopped to give her a kiss and thank her for her support.  Now I use the Riverbank run to kick-off my summer of racing fun.  My husband and I are signed up for several weekend adventure races.”

To support Robin, follow this link: http://www.active.com/donate/intheimage2011/BakerR

Shanna Black has a unique perspective on this year’s race because of her son, Kendrick.  “We are very excited to do this event together. I’m hoping that he will enjoy his first race and we can start an annual tradition of running the Riverbank Run together.” 

Shanna started running like most to stay active and healthy.  This will be her second year running the Riverbank 5k Run and has a personal goal of simply beating her finishing time from last year.

Visit this page to encourage Shanna and Kendrick: http://www.active.com/donate/intheimage2011/Shanna-Kendrick

The third member of the Awareness Team is Anthony McCullough.  Anthony started running just last year because he didn’t think he could run a 5k.  He kept running after his first race as a method of exercise for himself and his dog.  “It was the best way to give my dog exercise.  When you have a tall 100lb Doberman just walking him does not get rid of the energy he has.  So we had to move to running.”

Anthony’s goals have expanded rather quickly since his first 5k last year.  He ran in a 10K also and this year can be seen in the 25k.  He has set a personal goal of finishing in 2 hours and 20 minutes, but the primary goal is to “mainly just finish”.

Let Anthony know you care by clicking on this link: http://www.active.com/donate/intheimage2011/amccullough

Please support our runners by encouraging their efforts.  However, the primary goal is to support area at-risk kids.  It is inspiring to see how a pair of shoes can make all the difference.

Where does YOUR Money Go?

Tax season is in full swing and the deadline for submitting your portion is fast approaching.  This year the deadline for filing your federal taxes has been extended by three days to April 18.  (In case you were wondering why, it is in observance of Emancipation Day in the District of Columbia.)  Your state taxes however, may still due by April 15.  Check with your state government office for your exact deadline.

The history of taxes and taxation take us back to our colonial days and part of the reason for our succession from Great Britain.  The beginning purposes of federal taxes in the United States though were to fund our war effort in the American Civil War.  Today besides funding war efforts, taxes pay for a wide variety of expenses and programs.  Not surprising though, most of us really don’t know where our tax dollars go within the federal budget.

We thought you might be curious.  Take a peek:

Social Security	20.4%
Defense	20.2%
Medicare	13.1%
Low-income Assistance	9.3%
Medicaid	7.9%
Net interest Payments	6.6%
Unemployment Compensation	4.7%
Veterans Affairs	3.1%
Education	2.9%
Law Enforcement & Homeland Security	2.4%
Transportation	2.3%
Health (not Medicare or Medicaid)	2.0%
Management of Federal Employees & Buildings	1.4%
Environmental Protection & Natural Resources	1.0%
Space & Science	0.7%
Agriculture	0.7%
Housing & Community Planning	0.6%
Social Services	0.6%
Foreign Aid	0.6%
Workplace Safety & Rights	0.5%
Diplomacy & Embassies	0.4%
Internal Revenue Service (IRS)	0.4%
Energy	0.4%
Statistics & Weather	0.3%
Telecommunications	0.3%
Trade & Economic Development	0.3%
Native Americans	0.2%
Congress	0.2%
Post Office	0.1%
Arts & Culture	0.1%
District of Columbia	<0.1%
White House	<0.1%
Bailouts, Currency & Financial Regulation	-3.7%

If you would like to know how this specifically applies to you.  Visit: thirdway.org/taxreceipt.  You can enter the amount of your federal taxes paid in 2010 to see exactly how much went to each category.  You can also review each category for a sub-list of what is included in each one and how those areas are divided.

Incidentally, as of January of this year our national debt was $14,025,215,218,709 of which every American has a share of $48,382.  Unfortunately, that amount is $5,768 more than it was in 2009.

If this information concerns you, get involved!  You can easily find out who your elected officials are and how to contact them by visiting: congress.org and simply entering your zip code under the “Get Involved” section.

Are you Ready?

Okay, I realize we’re still wearing winter coats and scraping the windows of our cars each morning.   But this is Michigan, and that means it can change from a frosty 27° to a balmy 75° in about 12 hours.  By starting now where you can, you will soon be able to enjoy a cold iced tea while relaxing in your favorite lawn chair while your neighbor is still trying to find the back of his garage.  Here are some suggestions to get your home prepared.

□     Check home-safety devises.

Replace batteries in smoke & carbon monoxide detectors

Recharge fire extinguishers

□     Deep clean.

Clean ceiling fans and light fixtures, replacing light bulbs as needed

Clean out the refrigerator and freezer of outdated food items and condiments

Clean, pack and store humidifiers

Deep-clean the carpeting

Clean and air out heavy winter bedding and clothing before storing

□     Maintain HVAC units.

Once the weather does break, turn off your heating system

Change air filters

Remove and clean the filters for your air conditioner and have your unit professionally serviced as needed

□     Think Summer.

Clean and install window screens

Bring out your patio furniture, cleaning and checking for wear or damage as you go

Clean your grill, filling the propane tanks or stocking up on charcoal and lighter fluid

□     Prepare your tools.

Cleaning out and organizing the garage or shed, moving winter equipment to the back, lawn mower and gardening tools to the front

Clean and sharpen trimmers, rakes and shovels

Service the lawn mower and fill gas tank

Hook up garden hoses and replace as needed

If applicable have your underground sprinkler system serviced

□     Walk around the house.

Check the roof for loose shingles that need repair

Clean out the gutters

Check for cracks in the foundation, driveway and sidewalks and repair as needed

Remove insulated covers from outdoor faucets

Clean winter debris from landscaping and foundation

Check lawn for any dead/damaged areas and reseed

□     Enjoy the changing season and warmer weather!

If You have Wings…Use Them!

It’s funny sometimes the lessons that nature can teach you.  Just watch some of the critters in your neighborhood sometime and you will be amazed.

A couple of weeks ago West Michigan was provided one of those rare early spring days where the sun was shining warmly and there was only a slight breeze.  I decided to eat my lunch at a local park and enjoy a few moments of quiet.  As I surveyed the area I looked out over the small pond taking notice of the large gathering of ducks huddled tightly in the one area of open water no longer covered with ice.  Since this is quite the hangout for the city duck population I quickly noticed several other smaller gatherings.

However I was particularly drawn to a quant group of four.  They busily made their way up the lawn and into the parking lot, rounding my vehicle in search of whatever morsel intrigues a duck these days.  Their self-guided tour eventually led them to the other side of my vehicle and a small ridge of now icy snow melt.

Surveying the obstacle before them, the first duck steadily climbed to the top and then proceeded down the other side in the most self-controlled, not to be outdone, Shaun White take some notes slide.  This duck was cool! 

The second duck could not see what lay on the other side of this ridge, but was able to surmise that his friend had indeed done so safely.  Duck #2 climbed to the top, confirmed the status of his cool friend and also slid down to the other side.  While his performance was not nearly so stylized or even controlled he did reach the bottom with all feathers and dignity still in tack.

Then it was time for duck #3.  Duck #3 struggled some to reach to top of the obstacle but after some exertion did manage to do so.  At this point duck #3 began to study the surroundings.  There was a little lean to the right, a lean to the left and slight tilt forward and then a whole lot of roll.  We’re talking tail feathers over beak, complete summersault, look-out below, crash landing spectacle.  Once this poor creature reached the bottom there was a great ruffling of feathers in an attempt to regain whatever shred of dignity remained.  It was a sight.

Now the remaining fourth duck could not see the sight that lay before from it’s vantage point.  The fourth duck only knew that 3 ducks had climbed up, disappeared and miraculously waited on the other side.  Duck #4 paused from a moment.  I could tell this was going to be good.  Suddenly with great grace, poise and ingenious thinking, duck #4 flapped its wings, took off into the air and gently landed in the middle of the other 3.  If a picture says a thousand words, the look on this duck’s face spoke volumes.

The obvious question raised (after laughing loudly of course) was did you forget?  We’re ducks!  We can fly!

How often do we forget our own abilities, skills or natural talents?  How often have we just simply followed the crowd, without thinking that there may be another way? 

Don’t forget the natural strengths and power you already possess.  We all have our own set of “wings”.  Use them!