Archives

February 2008

The 10% Rule

Posted at 5:14 AM, Feb. 29, 2008

Utilize no more than 10% of your credit in order to have balance in your life.  This is the advise according to a recent article on CNN.  Funny, this runs very similiar to Biblical prinicipals about the 10% rule. The premise, if you have a $10,000 credit limit, carry no more than $1,000 in debt at any give time.  Pretty step considering the average consumer carries a debt balance of $8,000.  Note, this does not reflect student loans, mortgages, or other large ticket items.  Just good ole consumer debt.

The Loan Limits

Posted at 6:11 AM, Feb. 27, 2008

Do You Think You Are Financially Prudent?

Posted at 4:58 AM, Feb. 25, 2008

I came across this article from PBS and Frontline that did an entire series about the Secret History of the Credit Card.  I will tell you, this will challenge even the most confident consumers when it comes to being fiscally sound.  Watch these online videos and learn some hard facts such as:

Did you know that you can have your interest rate changed based on your behavior with a completely unrelated creditor?  Even if you have never been late with your MasterCard creditor, but say, 3 years ago were 60 days late for a payment on your car, your MasterCard holder could decide at anytime to change your current interest rate (regardless of the intro terms) to a much higher rate. 

This could change your attitude the next time you pull out the plastic.

Foreclosure Facts

Posted at 7:12 PM, Feb. 20, 2008

Despite a growing number of loans due to reset, it is important to realize that most home foreclosures are not due to payment adjustments on mortgages.  In fact, the primary reason people lose their home is due to job loss or other means of a serious income reduction. 

 Just look at the two states that have held the number one and two slot for the most defaulted loans, Michigan and Ohio.  Both have suffered tremendous setbacks with a declining manufacturing base (which accounts for a large population of jobs), low to no population growth and a low demand for housing. 

Other factors such as illness and divorce can add to the above as cash-flow problems which collectively, account for 80% of all mortgage defaults.  Payment adjustments alone accounted for only about 2%.  This helps to keep things in perspective when we see homes in our marketplace that bear the un-mistakeable sign of foreclosure.  Very real circumstances outside of the real estate industry dealt cards to homeowners that had negative effects that perhaps without all the media hype revolving around the mortgage meltdown, would probably have gone unnoticed.  I think overall, we can learn to look at the faces of foreclosures with a bit more empathy as we have all but witnessed it could happen to anyone.

Congress Sends Bill To Raise Fuel Efficiency

Posted at 7:01 AM, Feb. 18, 2008

February is Free Credit Reports for Illinois

Posted at 3:31 AM, Feb. 15, 2008

Now more than ever has knowing what your credit score matters.  At www.AnnualCreditReport.com you can download a copy of your report for free from all three of the major credit reporting companies.  In the state of Illinois, Feburary marks the beginning of a new year, so anytime within the next twelve months, you can request your copy. 

I recommend as a way to monitor your credit report without paying for a service is to choose one of the companies and download that report this month, then in June, another company, and then lastly in October, the third.  Since you may only obtain 1 copy per company, you can take advantage of spreading them out.  Do note that each and every company has it's own tiering system, so even though you credit may be blemish free on say, TransUnion, EquiFax could be another story.  No matter how you choose to do it, I strongly recommend checking your credit report for erroneous information.  It is estimated that over 60% of credit reports contain inaccurate or false data, such as a payment that wasn't credited or a deliquency that wasn't yours.  Check it!  What you don't know could hurt you. 

You also might want to take your reviewing to the next level.  These free reports have a disadvantage in that they do not provide FICO scores, but for a very modest fee, you can obtain these scores and see where you rank.  If you are not in the market for a large purchase or refiancing, take this opportunity to improve your score.  Check my related articles for tips on how to improve your credit scores, and how to do clean up repair if necessary.

Risk-Based Interest Rates

Posted at 3:17 AM, Feb. 13, 2008

Well here comes the backlash for all those with less than perfect credit scores.  The government-backed entities that control the secondary market, Freddic Mac and Fannie Mae, have now imposed fees (or points) to borrowers who are less than desireable in terms of credit risk.  So, even though there are still speciality financing programs available, for A paper loans, buyers will be paying an additional fee or interest rate hike if they fall below the margin.  Every bank is different, so consult with your local lender with how this affects you!

The following information has been provided courtesy of Marianne Mandel of Integra Financial Group. 

I can’t say exactly what the hits will be to the borrower because its to the wholesale pricing (or Yield spread), but basically one can assume that the lower the score, the higher the rate.  For example someone with a 680 plus credit score and a 90% LTV can obtain a rate of 6%, with a  660-679 score your rate could be between 6.25% and 6.375%, with a 640-659 score your rate could be between 6.375% and 6.625% , with a score of 620-639 your rate could be 6.625% to 7.00% and with a score of 619 or lower your rate could be 7.00% to 7.25%.  It’s difficult to speculate what the rate difference is exactly because banks price loans differently everyday, but ¼ to 3/8ths per tier is a somewhat accurate calculation.   This means that now more than ever are credit scores important in your financial profile. 

    Marianne Mandel, Senior Loan Consultant, 773-792-0000 ext. 22

6565 N. Avondale Suite 200, Chicago, Il 60631

Mention this blog and get your FREE credit analysis!

A Week's Peak at the Chicago Real Estate Market

Posted at 2:54 PM, Feb. 11, 2008

Here is the weekly stats provided from the Chicago Association of Realtors.  These figures represent the city of Chicago only as does not reflect specific neighborhoods or subneighborhoods.  If you wish to have more detailed information regarding an area or property of your choice, consult your local professional.

We are seeing slightly less properties coming onto the market this week from the last two years indicating that sellers are being a bit more cautious with entering the market at this time.  Sold number of units are keeping pace in proportion to units entering the market as seen from previous years.

Single Family Home values are up approximately 5% as a median value compared to 2007, but still not quite at 2006's values.  Condos however, have had a pretty steady climb.  Things are not as bleak as they seem.

In Case You Missed It

Posted at 4:40 AM, Feb. 8, 2008

Here are the Air Times on HGTV for the two episodes I am currently on.  You can catch me on March 02 at 11am for the Evergreen Park home and on February 10 (6pm) and 24th (11am) for the South Shore Property.  If you can't watch, TiVo!!!!

Market Update for Week of January 24th-30th

Posted at 4:17 AM, Feb. 6, 2008

   Here is the market update for the Chicago area.  Note that this is neither neighborhood or sub-neighborhood specific, nor does it encompase all properties.  Please consult a local real estate professional for a more accurate analysis.

Chicago Listings for January 24th - 30th

	Units	Median
Single Family Homes	485	$257,000
Condos	824	$309,000
Multi Family Homes	310	$298,000

In comparison value to date from 2007 we have a drop of 8.5% for Single Family Homes, Condos, no change, and in Multi-Family dwellings a decrease of 13%.

Chicago Sales for January 24th - 30th

	Units	Median
Single Family Homes	83	$218,000
Condos	208	$322,914
Multi Family Homes	310	$279,900

Here we have a decrease in value of Single Family Homes by 12.5%, Condos increased in value 17% and Multi-Family dropped by approximately 15%.

Partial data is courtesy of the Chicago Association of Realtors.

Proposed Hike in Property Taxes in Chicago

Posted at 6:08 AM, Feb. 4, 2008