It can save you thousands of dollars! Today, it is almost impossible to live without credit.  Credit is a great tool, but like any tools, it can be very harmful if not used properly.  Spending a little effort on improving and maintaining your credit can go a long way.  Below is information on the different elements that go into a credit score and some things you can do to improve you credit.

Unless there are real errors on your credit report, keep in mind that there aren’t any quick fixes to improve your credit scores.  Most improvements will take anywhere from 30 days to a year’s time to take effect, but I promise the effort is worth it!

How can it save me money?

Your credit score is your financial report card.  Customers with the best “grades” get the best terms on a wide variety of services.  For example:  If you have poor credit, a cell phone company could require a $400 security deposit!  If you have good credit, most utility companies will establish service without requiring a deposit.  Many employers are starting to require a credit check as part of the hiring process. Good/perfect credit can get you the best rates on mortgages, auto
financing, credit cards, and even auto insurance!

What can I do?

• BE DILIGENT: Get a copy of your report and make sure the information is correct.  If there are errors in your report, correct them.  The Federal Trade Commission has good information on dealing with credit repair. Beware of credit-fixing scams.
• KNOW YOUR FICO:  Understand how credit scores are calculated (see the pie chart) and do what you can to improve the deficiencies.
• DON’T BE LATE:  Always pay your bills on time.  Late payments of 30 days or more damage your score.  Consider automatic payments through your bank account.
• GET SMART: Don’t max out your credit cards, the difference between the high credit and balance impacts your
  score.  Pay credit cards off each month or at least pay more than the minimum payments each month.  Avoid opening new credit card accounts and con’t have your credit pulled on a frequent basis, no more than 10-12 in a year’s time.
• KEEP A GOOD PAYMENT HISTORY: Don’t close down old, inactive accounts that are in good standing, this damages your payment history.  Do pay off and close accounts that you were more than 30 days late.

You can do it!  The sooner you work on your credit, the sooner you start reaping the benefits!

For further credit tips or for a fast pre-approval contact Tom Glass at 864.884.0108 or tglass@hanovermtg.com.

With this program offering 100% financing and NO PMI, you can’t afford to not explore this option for your buyers and properties.

USDA Rural Housing is a fantastic option for those looking to purchase in Upstate SC. Eligible borrowers receive 100% financing – which is great for those with little or no cash for a down payment. Monthly PMI is waived to ensure a lower monthly payment for qualifying borrowers.

Basic qualifications include:

• The property must be in an area that the government considers “rural”

Most counties in Upstate SC have large areas that are considered “rural”. If you have a particular property that you are questioning, contact Melissa Brenneman (864.313.9353) to find out if your property will qualify for this program.

• 41% maximum debt ratio
• 640 minimum credit score
• Household income requirements varying per county

Reserves are not required and interest rates are comparable with FHA and Conventional programs. USDA charges a funding fee of a little over 3.5% to be financed into the loan in correlation with this program.

If you have a property or buyer who may be able to capitalize on this program, or if you have any questions about property and income requirements, contact Melissa Brenneman at mbrenneman@hanovermtg.com or 864.313.9353.

In following up with my last post, I’m going to show a side-by-side comparison of an FHA Loan vs a Conventional Loan.

For this comparison, borrower Jane Doe with a 750 credit score is purchasing a house for $135,000, with 3.5% to put down and is getting a 30 year fixed mortgage.

First, we’ll just compare the basics – loan amount and down payment requirements.

The borrower is only required to put down 3% with conventional and they do not have the 1% FHA funding fee.

Now, let’s compare the monthly payment for this borrower. We’ll base it off of the same 4.75% interest rate for both FHA and Conventional.

Your buyer is saving over $40 a month, has a lower loan amount, and is saving an initial $675 (0.5%) that conventional doesn’t require of the borrower for a down payment.

Bottom line: by going Conventional rather than FHA, your borrower has the potential to save quite a bit because of the lower Mortgage Insurance Rates with Conventional.

For further explanation or questions about conventional, FHA, VA or USDA mortgages, contact Melissa Brenneman at 864.313.9353 or mbrenneman@hanovermtg.com.

Hello Conventional, Welcome back to the game!

As we know, FHA Loans have been dominating the industry for quite some time. As in, I’ve hardly spoken the word “conventional” unless it was followed by “twenty percent down”.  In our office, the FHA loans are in RED folders and the Conventional loans are in YELLOW: I am happy to report that the ratio of RED vs. YELLOW has evened out.

This is mainly due to the lower Mortgage Insurance (MI) rates with Conventional, and the climbing ones with FHA. With FHA, borrowers must put at least 3.5% down, finance in a 1% FHA fee, and the current monthly MI rate is 1.15%. However, with Conventional, borrowers can put just 3% down, NO financed fee, and still receive a lower monthly MI rate that is below 1%.

For many borrowers, Conventional is simply the better option right now:
• Lower MI
• Lower monthly payment
• No 1% fee.

Of course, there are a few rules to remember when going Conventional: such as, two months of reserves and a debt-to-income ratio under 45%.

FHA still has a place in the market, but the playing field has evened out.

For further information on Conventional loans, FHA loans, Mortgage Insurance rates or any other residential loans, contact Melissa Brenneman at mbrenneman@hanovermtg.com or 864.313.9353.

by Melissa Brenneman – Loan Officer

I recently watched a Webinar on energy efficient mortgages – apparently these have been around for a while, but I’m late to the party. Energy efficient mortgages (EEM) allow borrowers to directly finance energy related home improvements directly into their mortgages. Energy related home improvements include the following five upgrades:

• Insulation
• New Windows
• Envelope System
• Energy Efficient Water Heater
• Updated HVAC

If a borrower decides he would like to look into getting an EEM to finance any of the above improvements, he needs to tell his lender (Hanover Mortgage) and we’ll get an energy rating inspection set up from an HERS (Home Energy Rating System) auditor. Based on the inspection, the cost of improvement is calculated. As long as the homeowner’s monthly savings with the energy efficient upgrades is greater than the monthly cost of the improvements, the borrower can be approved for an EEM. There are, of course, many other guidelines that go along with this, but that is the main thrust of an EEM.

EEMs are FHA loans and can also be utilized by VA – however, USDA loans are ineligible. EEMs are also considered a tangible net benefit for a borrower looking to refinance his home.

For further information about an EEM program, FHA, VA, USDA or conventional loans, contact Melissa Brenneman at Hanover Mortgage (mbrenneman@hanovermtg.com / 864.313.9353).

In the past few weeks, I’ve fielded quite a few questions about programs for single-parent families. South Carolina State Housing (SCSH) offers $4,000 of down payment assistance (DPA) for single-parent families – regardless of whether or not they are a first time homebuyer. The buyer must be the legal guardian or parent of at least one child under 18. If the parent/guardian is caring for a permanently disabled or handicapped person (regardless of age) this program applies to them as well.

The DPA is forgivable, if the annual family income falls between $20,300 and $57,550 (depending on the family size).

The DPA is repayable (deferred for 3 years) if the annual family income falls between $58,000 and $66,700 (depending on the family size).

A widespread misunderstanding is that SCSH programs are only for the exceptionally low income buyers. However, that is not true. SCSH offers down payment assistance for many different categories of buyers – not just the low-income.

For further information about any SCSH programs, contact Melissa Brenneman at Hanover Mortgage (mbrenneman@hanovermtg.com / 864.313.9353).

Fact: Hanover Mortgage has been on SCSH’s “Preferred Lender” list for the past 7 years and has been the “Top Broker” for the past 6 years. Hanover has made more SCSH loans than any other broker in the State.

Some lenders shy away from SCSH because it is “more work”. But when your buyer can qualify for down payment assistance, why wouldn’t you put in the extra effort?? Just because it’s hard work?! The programs are still out there – take advantage of them! ?