www.davemillermortgages.com February 2008
Mortgage News
Your Credit: Tips to Score Big
A credit score is an extremely important financial tool. It
Dave Miller provides access to the financing you need in order to buy
Loan Officer a car, a home, or pay for college tuition, among other
Affinity Group Mortgage things. Since higher scores equate to lower costs and vice
Phone: 614-610-4245 versa, it's vital to understand the factors involved in
dave@agmloans.com calculating your score. Here are the five elements that
make up a credit score, in order of importance:
Payment History: 35% impact. Paying debt on time and
in full has a positive impact. Late payments, judgments,
and charge-offs have a negative impact. Missing a high
payment has a more serious impact than missing a low
payment. Delinquencies that have occurred in the last two years carry more weight than older
In this Issue Page items.
Mortgage News Cover When applying for a mortgage, every point in your credit score can make a big difference. So
Did You Know? Cover don't make any major financial or credit decisions even paying off an old debt or delinquency
without first discussing it with your mortgage professional.
Rates at a Glance Cover
Trivia Challenge 2 Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding
balance and available credit. Ideally, consumers should make an effort to keep balances as close
Book Review 2 to zero as possible, and definitely below 30% of the available credit limit when trying to purchase
Quote of the Day 2 a home.
Creative Cuisine 3 Credit History: 15% impact. This marks the length of time since a particular credit line was
The Money Pit 3 established. A seasoned borrower is stronger in this area.
Street Smarts 3 Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive
than a concentration of debt from credit cards alone.
Rates at a Glance Inquiries: 10% impact. This quantifies the number of inquiries (or requests for credit) that have
been made on a consumer's credit history within a six month period. Each individual inquiry can
30-Year Fixed Low 6's
cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce
15-Year Fixed High 5's the score is 10. In other words, don't start the loan process until you're ready to act. Otherwise
each individual credit inquiry could cost you. However, scoring models have now been adjusted to
5/1 ARM Mid 5's count multiple "hard" inquiries within a 14-day period as a single request. So, when you're ready,
3/1 ARM Low 5's your credit will be too.
1-Year ARM Low 6's Rebuilding Credit
These rates do not reference a specific It's true, negative credit items can remain on your credit report for up to 7 years (up to 10 years
loan program; rather, they reflect for a bankruptcy). But this doesn't mean that you have to wait 7 to 10 years to begin
general market conditions, which are reestablishing a good credit rating. Because credit scoring models typically lend more weight to
subject to change. your recent activity than to the mistakes you might've made in the past, you can change your
habits right now and begin reestablishing yourself as a good credit risk for a home loan or
mortgage refinance in just 6 to 12 months.
Continued on Page 2
Did You Know?
Lucille Ball was kicked out of drama school in New York because her
instructors said she was too quiet and shy.
February 2008
Mortgage News Book Review
(Continued from cover)
Are You Really
The following are a few Dos and Don'ts when it Listening?
comes to rebuilding your credit: by Paul J. Donoghue and
Mary E. Siegel
1) Three months prior to securing your
mortgage, DON'T apply for, close, or pay off any All relationships benefit
credit cards, loans, or other kinds of credit from good listening skills.
without speaking to your mortgage professional For Paul J. Donoghue and
first. Any one of these actions, as innocent as Mary E. Speigel,
they might seem, could seriously affect your co-authors of Are You Really Listening?,
credit score, adding significant costs to your good listeners also become good
mortgage should your score suddenly drop. communicators who are far more likely to
influence, persuade, and successfully
2) If you have a credit card account with an excellent credit history, DO use it but use negotiate with others. Their easy-to-read
it strategically. In other words, use it only for small purchases that you can easily pay off book offers a number of insightful,
completely at the end of the month. Remember, creditors like to see evidence of recognizable, and sometimes funny
stability, so the goal here is to keep the good reports coming month to month without examples that clearly outline non-listening
falling into the same financial traps that led to credit challenges in the past. behaviors. These vivid stories set the stage
for the authors' step-by-step guide to both
3) If you don't have a credit card, DO get a secured credit card. This is a great way to listening and communicating better a
rebuild or establish credit quickly. Because this account is secured by funds that you must-read for today's busy professionals.
deposit (typically between $100 and $400) you're not seen as a great risk to the card
issuer because of your initial investment. Again, use this card strategically to build a Are You Really Listening? is available
strong credit history. Pay your bill on time every month, and it won't be long before you at Amazon.com.
qualify for an unsecured credit account.
Trivia Challenge
Time Magazine's Man of the Year
When applying for a mortgage, every point in your award in 1982 went to:
credit score can make a big difference.
A. Alfonso Garcia Robles
B. Martina Navratilova
C. The Computer
4) Finally, DO monitor your credit. Ask your mortgage professional to refer you to a D. Steven Spielberg
professional credit repair company you can trust. Having an experienced professional
on your side will allow you to focus on your long-term credit goals without having to
Call 614-610-4245 or email us at
make reestablishing your credit a second career.
dave@agmloans.com with the correct
answer, and your name will be entered into
If you or anyone you know has any questions about credit scores or what can be
our quarterly drawing to win dinner and
done to repair them, please don't hesitate to call. We'll be glad to review your
movie tickets for two!
credit and see what, if anything, needs to be done to help meet your financial
goals and needs.
Quote of the Day
The bitterest tears shed over
graves are for words left
unsaid and deeds left
undone.
-Harriet Beecher Stowe
Page 2
February 2008
Preheat oven to 350 degrees. Allow tri tip to come to room temperature. Rub with olive oil, and season liberally with salt, pepper, and Herbs
d' Provence. In a large skillet, heat 3 tbsp. of olive oil until hot. Sear tri tip for 3 to 4 minutes on each side or until well-browned. Remove tri
tip from skillet and place in a roasting pan or on a sheet pan. Place in oven and roast for approximately 25 to 30 minutes or until the internal
temperature reaches 130 degrees (medium-rare) on an instant-read thermometer. Remove from oven and allow the tri tip to rest (loosely
tented with tin foil) for ten minutes. Meanwhile, in a mixing bowl combine crème fraiche, horseradish, shallot, dill, and salt to taste. Set
aside. Slice tri tip across the grain and serve with horseradish sauce on the side.
Street Smarts
Last Minute Tax Changes
On December 20th, 2007, the President This action could encourage some struggling homeowners to sell
signed the Mortgage Forgiveness Debt their upside down properties and avoid foreclosure.
Relief Act of 2007 into law, creating
headaches for the IRS but some great The new law also extends until 2010 the mortgage insurance
last-minute tax breaks for many deductions created by the Tax Relief and Health Care Act of 2006.
homeowners in 2007. Designed to protect lenders from defaults and foreclosures,
mortgage insurance (commonly referred to as PMI) is required for
One major provision temporarily spares loans exceeding 80% of the property's value or sales price. PMI, an
homeowners the tax burden associated with canceled mortgage alternative to piggyback financing, makes it easier for certain
debt. Prior to this law, forgiven or unpaid mortgage debt due to borrowers to qualify for a home loan. Under the new law, qualifying
foreclosure, short sale, or deed in lieu of foreclosure, was taxpayers can treat PMI payments as home mortgage interest,
considered taxable income. The new law, however, waives these which is tax deductible in most instances.
taxes from the beginning of 2007 to the end of 2009.
(Continued on Page 4)
Page 3
Last Minute Tax Changes Thank You!
(Continued from Page 3)
We wish to thank our clients who
have been kind enough to refer
Finally, the new law broadens the home-sale gain exclusion for surviving spouses. In the past,
business to us. We appreciate
the combined $500,000 gain exclusion was available only if a husband and wife filed a joint
the opportunity to provide
return for the year of sale.
excellent service to your family,
friends, and co-workers.
Now, a surviving spouse is entitled to the $500,000 gain exclusion if the sale occurs less than 2
years after the spouse's death, if all other ownership and use requirements have been met.
If you think you might benefit from these new tax laws, we'll gladly refer you to a great
CPA or Tax Preparer.
If you know anyone who is looking to buy, sell or refinance a home,
please forward their name and telephone number to us. We will
happily provide the same high level of service that we have
provided to you. The greatest compliment you could possibly give
us is the referral of your friends and family.