According to FICO the creator of our current credit scoring model, maxing out credit cards can reduce you credit score by as much as 45 points.

Tags: credit, Credit Education, Credit Scoring, credit tip, Empowerment, Fair Credit Reporting Act, Fair Debt Collection Practices Act, FICO, FICO score, finance, home purchase, money, Money Tips, Wealth

Everyday hundreds of Americans apply for a home  mortgage. Unfortunately, many lenders do not instruct their clients on the do nots of home financing. Consequently, before the loan process is complete, an approved buyer becomes unapproved.

Chuck Bricker of Bank of America  and his team has put together a list of what they call  “Thou Shall Not”.   According to Chuck Bricker of Bank of America the following  things  should NOT be done between the time of submission of your home loan and closing.

Chuck Bricker goes on to state, “Some of these may seem very rudimentary and even silly, but I promise you that each one is from at least one real life event in my years of experience.”

Thou Shall Not:

1. Quit your job.
2. Overdraft your checking account.
3. Stop paying your rent or mortgage.
4. Change employers or compensation structure with current employer, at least without notification to your loan officer first.
5. Open any new accounts – including to finance appliances, etc, for your new house.  Tempting as it may be, get the keys first, please.
6. Make any CASH deposits to your account(s).
7. Liquidate any major accounts, like 401k, without, first, getting proper instructions on documenting the withdraw or loan & deposit into your checking account properly.
8. Get gift funds from a friend or family member – Contact me first for proper instructions on how to transfer the money from donor to you & document it for your loan file.
9. Do anything that will result in a new collection, judgment or tax lien, etc.
10. Finance a new Harley Davidson & make your first excited phone call about the new purchase to your me, your loan officer.  Sorry, I probably will not share in your excitement.
11. Change your marital status without notifying your loan officer.
12. Change your target closing date without notifying me first.
13. Forget to inform me that the home has a huge hole in the roof that could second as a shower when it rains.
14. Withdraw a large sum of money from your account(s) to make a major purchase – appliances, automobile, Michael Jordan rookie card, etc.
15. File bankruptcy.
16. Stop making payments or pay late on your current debts.
17. Get an loan of any type for your down payment.

Situations that reflect these items above do sometimes arise.  If a client has the possibility of experiencing one (or more) of the above items – or anything similar – please contact  your loan officer.  There are others involved in helping during the loan process, such as  processors, assistants, etc… According to Chuck Bricker, for matters like the above, your loan officer is best equipped to help you navigate potential problems.

Finally, Chuck Bricker suggest that if you have applied for a home loan and perceive any bumps in the road, be proactive and up-front with your loan officer.

Tags: banking, credit, Credit Education, credit tip, Home Buying, home purchase, money, Money Tips, Real estate, saving, savings

Effective May 21, 2010  – Housing and Urban Development (HUD)  has issued a one year temporary waiver of the  “flipping rule” permitting FHA financing of a resale within 0-90 days of the seller’s acquisition of the property.

Tags: banking, budget, Credit Education, home purchase, homebuyer, low downpayment, money, Money Tips, Real estate, savings

On April 12, 2010 at 10:00am on BlogTalkRadio on The Credit and Finance Show Credit Expert Victoria Finch and Finance Coach Jeff Dalverny will be joined by special guest Chuck Bricker of Bank of America.Chuck has been in the banking industry for over a decade and will provide insights into home ownership, lending changes, and information for those facing possible foreclosure. For more information click here.

Tags: banking, budget, business, credit, Credit Education, credit tip, finance, Home Buying, home purchase, low downpayment, money, Money Tips, Real estate, saving

Home ownership is part of the American dream. Many of us grew up with the notion that we would grow up, get married, and find the perfect home to raise our children. For some the dream of home ownership is a seamless process. But, for others it can be a nightmare. Many potential homeowners seek out a Realtor prior to checking their credit and getting a loan approval. That is a backwards approach to home buying.

Case study: Jane is a small business owner. She has always paid her bills on time and maintains relatively low balances on her credit cards. Knowing she had “good” credit, Jane sought out a Realtor to help her find her dream home. Jane found a home and made an offer. After finding a home, Jane’s Realtor referred her to a Mortgage Loan Officer. Jane’s credit score came back in the low 700′s, but her loan officer told Jane she has been denied for a home loan. Three years prior, Jane had an issue with a vendor for her business and her account was sent to a collection agency. Jane had settled the debt with the original vendor, but somehow it had gotten transferred to a collection agency. It took Jane months to straighten out the account with the vendor and the collection company. The sellers would not agree to keep the home off the market. The house sold to someone else.

Jane’s story is not unusual. I see it everyday. I cannot stress enough that lending is not just about your credit score. You must be proactive regarding your credit. In today’s economic climate the people making decisions to approve or disapprove financing are being very cautious. Follow this order when considering buying a home: 1. Check your credit. 2.Get mortgage approval. 3. Seek out a Realtor.

Tags: credit, Credit Education, credit tip, Home Buying, home purchase, Real estate