California Association of Realtors® Predicts Increased Home Sales in 2009

The CALIFORNIA ASSOCIATION OF REALTORS® predicted Wednesday that the median price of a home in the state will fall 6 percent to $358,000 in 2009 as compared to the projected $381,000 median for 2008.

At the same time, the association anticipates that sales of existing single-family homes will rise 12.5 percent to 445,000 units, about the same percentage of increase as the state experienced this year compared to 2007.

"The worst is over, but we're still not out of the woods," said Leslie Appleton-Young, the association's chief economist.

Appleton-Young’s prediction calls for sales of distressed properties to decline in the latter half of 2009, slowing the fall of prices. "I would think by 2010 we would be up by mid-single digit (percentages)," the economist said.

Source: The Associated Press, Alex Veiga (10/15/2008)

This article is from Realtor® Magazine Online Edition Daily Real Estate News for 10/16/08

NY Found Next-to-Last Concerning Business-Friendly Tax Policies

In what will be no surprise to New Yorkers, the Tax Foundation’s 2009 Business Tax Climate index found that New York is next-to-last in a ranking of states with business-friendly tax policies, slipping two places from 2008.

According to the report, only neighboring New Jersey provided a more hostile tax environment than New York to businesses among the 50 states. California, Ohio and Rhode Island complete the list of the bottom five.

Meanwhile, Wyoming ranked first with South Dakota, Nevada, Alaska and Florida rounding out the top five. The report has been published every year since 2003 and ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment tax and property tax.

This article is from NYSAR's Governmental Affairs Update for 10/10/08 .

John Weidman - Recipient of the Otsego-Delaware Board of Realtors® President's Award

John Weidman, Licensed Real Estate Salesperson for Benson Agency Real Estate, located in Oneonta, is the latest Realtor® to receive the President's Award from the Otsego-Delaware Board of Realtors®.

It was awarded to John on Tuesday October 7, 2008 at the Board's quarterly meeting - this time held at the Delhi College Golf Course Restaurant in Delhi, NY.

The President's Award is given to selected Realtor® members of the Otsego-Delaware Board of Realtors® who exemplify superior ethics, practices, and outstanding service to the buying and selling public - the essence of what a Realtor® is all about!

When presented with the award John commented that his buyer/seller clients and customers are the best. One of the many reasons he received this award is because John's customers and clients feel he's the best!

John represents the best qualities of a Realtor® - ethical, professional, knowledgeable, as well as caring for the needs and lives of the people he serves. It is an honor for the Otsego-Delaware Board of Realtors® to present John with this award.

Well done John!

Seller Financing Becomes Popular Alternative

As credit and borrowing standards tighten, seller financing is becoming more common.

For those selling small business, the ability to offer it is particularly important.

"Sellers really have to be prepared to take back more of the financing or to take a second position behind the banks to make them come together ... because of the financial situation of the world today," says Wally Kocemba of the BizDealer Team at Calhoun Companies, a business brokerage firm in Minneapolis.

While considered riskier than bank financing, seller financing -- which is sometimes combined with bank financing -- can offer owners a better price and a faster transaction.

“I believe sellers are going to have to understand that if they want to obtain the price that they’re looking for, they may have to consider seller financing as an integral part of the transaction," says Dean Bachelor, chairman and founder of the Platinum Group, a private-equity firm in Eden Prairie. "If they believe in the business and believe in the future of the business, that's less of a problem.”

Source: Minneapolis Star-Tribune, Todd Nelson (09/29/08).
This article is from Realtor Magazine Online Edition Daily Real Estate News 10/7/08.

New Index Says Home Prices Rising

A new home price index published for the first time this summer by Integrated Asset Services showed that home prices rose 1.1 percent on a national level in June compared to May, although prices dropped 11.5 percent over the previous year.The IAS360 House Price Index indicates that Midwest prices increased 4.7 percent in June, resulting in a 0.2 percent decline compared with the previous year. Prices in the West fell 0.5 percent in June and were down 16.9 percent compared to a year ago.The index is not adjusted for seasonal forces, such as the typically stronger spring and summer selling season and appears more volatile than other indexes, observers say. Denver-based IAS specializes in residential real estate valuations and the disposition of bank-owned properties.

Source: Reuters News (08/12/2008). This article is from Realtor Magazine Online Daily Real Estate News dated 8/13/08

Great Advice About Advertising

In just seven months, real estate marketing coach Jennifer Cummings helped Christina Martinez, the highest-producing real estate agent in the country, boost her commissions to $7 million from $4 million.

Cummings believes the secret to success is for agents to move from "advertising," or generating attention and promoting images or brands, to "marketing," which involves motivating someone to make a purchase. She recommends that agents discover the prospect's needs, build trust, and lead them to the point where they are ready to make a commitment. Cummings also urges agents to market to a specific group, determine whether they will use the Internet or print as their medium of choice, and figure out what message they want to send, then identify the needs and wants of their target audience.

Additionally, agents should create a hook to grab the reader's attention, such as "Save up to $100,000 on Your Next Mortgage!," and ensure that their marketing materials are written in a conversational tone. They should employ bullet points, headlines, and subheadlines to make their content easy to read and provide a way for prospects to contact them to receive special reports or checklists.

This article was written by Bernice Ross and appeared in Inman News on 8/1/08 and was reprinted by NYSAR Communication Central Marketing and Technology Tips dated 8/11/08

New Mortgage Law Has Buyers Scrambling

Housing industry observers expect that prospective buyers will scramble to take advantage of seller-funded down-payment assistance before a federal ban on such programs takes effect on Oct. 1.

The federal housing bill signed into law in July sews up a loophole that allows nonprofit organizations to gift mortgage down payments, and industry experts believe markets that have relied heavily on the programs could see new-home sales cut by as much as half. Seller-funded downpayment assistance has served as a surrogate for subprime loans in some ways and has helped builders put first-time and low-income buyers into new homes. "We will eventually go back to the mind-set of a society where you have to have 3 percent up-front to buy a home," says Phoenix real estate analyst Jim Belfiore.

Source: Poughkeepsie Journal (N.Y.) (08/18/08)

This article is from Realtor Magazine Online Edition Daily Real Estate News August 18, 2008

Is The Housing Market Bailout By Taxpayers Fair?

Is it fair that prudent taxpayers and home owners should bail out people who borrowed foolishly and companies whose executives were responsible for the credit crunch?

The answer is “no,” but that doesn’t make the bailout a mistake, says Zvi Bodie, finance professor at Boston University. "My own view is that the world isn't fair," says Bodie. "But would it be fair to put the economy into a deep recession or depression? I don't think so.

"If the monetary and fiscal authorities are right in their judgment that the risk of an economic plunge of frightening proportions is real, then the actions they're taking are fair to all of us, Bodie contends.

The U.S. economy in 2008 — with a 5.7 percent unemployment rate and economy expanding at a 1.9 percent average annual rate — is far from Depression-era statistics and only time will tell whether monetary and fiscal authorities exercised sound judgment or panicked. In the meantime, history rewards the bold — not the timid — when the financial system is threatened with collapse, according to Bodie.

Source: Business Week. Chris Farrell (08/05/2008)

This article is from Realtor Magazine Online Edition Daily Real Estate News August 6, 2008

NYSAR Quick Facts About Current Real Estate Market Conditions & Concerns

The following information is taken from a memo written by NYSAR President Linda Page on 8/4/08 concerning New York State June Housing Market Data:

Quick Facts

* June sales gains compared to May were reported in 35 of 58 counties for which NYSAR collects existing single-family home sales data.

* Thirty-four counties reported gains in median selling price in June 2008 compared to May 2008.

* According to the RealtyTrac June foreclosure activity report, New York ranked 32nd in the nation for number of foreclosures.

* A NYSAR-commissioned study of homeowners found the typical homeowner has been in their house for 7 years. The June 2001 statewide median sales price was $122,000, today it’s $219,000. While today’s sellers will not have the benefit of the high-demand, low inventory markets of 2004 to 2006, which inflated selling prices, they will still enjoy the benefits of increased equity and price appreciation when they sell.

* New York home buyers are recognizing the tremendous opportunities available to them in local markets throughout our state as evidenced by the increase in sales between May and June. Right now in communities across New York State, smart buyers are taking advantage of the choices available in every price range, and still low mortgage rates. They know that owning a home has a multitude of benefits including helping them build their personal wealth over the long term.

* The New York State Association of REALTORS® strongly supports the portion of Gov. Paterson’s Program Bill #62 that would cap the growth of school property tax levies at 4 percent or 120 percent of the Consumer Price Index (CPI), whichever is less. This tax cap proposal is a step in the right direction toward solving New York’s property tax crisis. New Yorkers clearly agree. A recent Siena College poll found that 69 percent of voters support of the governor’s property tax cap bill – regardless of political affiliation or geographic location.

* This tax relief issue has been thoroughly studied by the bi-partisan, blue-ribbon Commission on Property Tax Relief, which found the need for a school property tax cap, along with other proposals for stemming the tide of ever-rising property taxes. The school property tax cap proposal will help make homeownership more attainable and appealing by allowing people to afford to stay in New York State. Offering individuals and families the prospect of meaningful tax relief provides a tangible incentive to purchase a home and grow roots in New York, which will certainly pay lasting dividends.

* The housing stimulus bill passed by President Bush will go a long way to help stabilize the housing market and make the dream of homeownership more attainable for many Americans. In addition, more families will be able to refinance into safer, more affordable mortgages, in many cases helping those families avoid a devastating foreclosure.

Most Consumers Pleased With Real Estate Agent According to Survey

A survey published in the September issue of Consumer Reports shows that most consumers are pleased with the services of their real estate practitioner.

The survey of 9,141 readers who bought or sold a home (or tried to) found that 71 percent were very or completely satisfied with their practitioner, while only 12 percent said they were dissatisfied.

Practitioners with most of the larger real-estate chains and independent brokers earned reader scores of 79 or higher, which indicated that respondents found these professionals provide "very satisfying" service.

Eighty-six percent of those surveyed who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)

What Sellers Said

Eighty-two percent of respondents who sold with the help of a practitioner received $5,000 less, on average, than their original asking price.

Almost all of the 17 percent who sold their homes without professional help said they received about what they originally asked.

What Buyers Said

Sixty-six percent of Consumer Reports' readers who used a practitioner to help them buy a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without representation, paid close to the asking price.

Lower Commission = Happier Seller

The survey also found that many real estate professionals would negotiate commission rates if sellers haggle. Sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers' performance as those who paid 6 percent or more, the survey reported.

Forty-six percent of sellers surveyed attempted to negotiate a lower commission rate. About 71 percent succeeded.

Source: Consumer Reports (08/04/2008)

This article is from REALTOR® Magazine Online Edition Daily Real estate News for August 5, 2008

Economists: Housing Declines to Remain Small

A team of economists who created a variety of forecasting models concludes that predictions of further large housing price declines are greatly overblown.

They point to the house price index of the Office of Federal Housing Enterprise as most reflective of reality. Its data reveals that only four states — Arizona, California, Florida, and Nevada — have had declines of more than 4 percent in home prices over the past year.

These economists, including professors from Columbia University and from the Center for Real Estate at Wichita State University in Kansas, discount more drastic figures from the Standard & Poor's/Case-Shiller housing price index. They say this index is faulty because it doesn’t include data from 13 states and offers only partial coverage of 29 others, making its results an inaccurate reflection of middle-market homeownership.

Using a model constructed from the OFHEO price index, foreclosures, home sales, permits and employment, the economic team concluded that declines in house prices are highly likely to remain small.

“Our analysis reveals, unsurprisingly, that foreclosures and home prices have negative effects on each other over time, but this does not imply a vicious cycle of collapsing prices. Our models predict that as foreclosures continue to climb in many states, house prices will remain flat or decline in those states — but will not collapse.“

One reason for this is that the effect of foreclosure shocks on house prices is small. Furthermore, other fundamental factors (such as employment growth and a slowing of the growth of the housing supply over the past year and a half) will cushion the impact of foreclosures,” the economic team said.

Source: The Washington Post, Charles W. Calomiris, Stanley D. Longhofer and William Miles (08/04/08)

This article is from REALTOR® Magazine Online Edition Daily Real Estate News for August 4, 2008

How the New First-Time Buyer Tax Credit Works

Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit equal to 10 percent of the property up to a maximum of $7,500.

Here’s how it works:

*The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit.

*This program is actually a loan, which home buyers must repay over 15 years at zero percent interest beginning in the second year after they purchase the home. A home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.

*The credit applies only to homes purchased on or after April 9, 2008, and before July 1, 2009.

*High-income home buyers don’t qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.

Source: The Washington Post, Michelle Singletary (07/03/08)

This is an article from REALTOR® Magazine Online Edition Daily Real Estate News for August 4, 2008

Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill Which Is Now Passed Into Law

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152.

On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:

*GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

*FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

*Homebuyer Tax Credit - a $7500 tax credit that would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

*FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

*Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

*VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

*Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

*GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

*Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

*National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

*CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

*LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

*Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

4 Types of Buyers - Do You Know How to Identify Them?

You can improve your sales by understanding buyers as fitting into four distinct personality types, says Bayham Consulting LLC President Alan Bayham.

Once you identify their type, you can customize your presentations to meet their stylistic preferences.

1. Direct Type Buyers have Type A personalities, are direct and in a hurry, and have no qualms about interrupting a presentation. Practitioners would be wise to allow this buyer to do the talking and avoid giving too many details because he or she will make a decision quickly.

2. Interpersonal Buyers are pleasant, excitable, and more focused on relationship building, making it important for practitioners to socialize and create a positive atmosphere without imposing hard restrictions.

3. The Safety or Status Quo Type Buyer is calm, listens to what the practitioner has to say, and asks questions; and practitioners should keep in mind that it is crucial for them to present the information slowly, inquire about the buyer's needs, offer support, and take a gradual approach to obtaining commitment.

4. The Contemplative Buyer does not like small talk, wanting as many details as possible and conducting his or her own research beforehand. Practitioners should be careful not to encroach on this buyer's personal space, be thorough in providing information and documentation, and be willing to wait for the buyer to make a decision.

Source: RIS Media (July 28, 2008)

This article is from REALTOR® Magazine Online edition Daily real Estate News for July 31, 2008

NYSAR President Urges NY Legislators to Return to Albany to Approve Governor's School Tax Cap Proposal

Statement from New York State Association of REALTORS President Linda J. Page

Today, New York’s 62,000 REALTORS call upon their representatives in the state Legislature to return to Albany for the purpose of providing relief to our state’s beleaguered homeowners who are being crushed by high property taxes. We urge them to approve Gov. David Paterson’s school property tax cap proposal as an important first step toward providing New Yorker’s with a decreased tax burden.

The preliminary report from the New York State Commission on Property Tax Relief found that New York State’s local taxes are the highest in America – 79 percent above the national average.

It also found: property tax levies in the Empire State are rising at more than twice the rate of inflation and salary growth; outside of New York City, 62 percent of property taxes are school taxes; and in terms of tax rate, nine of the 10 highest counties in the nation are in upstate New York.

The New York State Association of REALTORS strongly supports the portion of Gov. Paterson’s Program Bill #62 that would cap the growth of school property tax levies at 4 percent or 120 percent of the Consumer Price Index (CPI), whichever is less. This tax cap proposal is a step in the right direction toward solving New York’s property tax crisis. New Yorkers clearly agree. A recent Siena College poll found that 69 percent of voters support of the governor’s property tax cap bill – regardless of political affiliation or geographic location.

In addition to the highest property taxes in the nation, home buyers in New York State are also expected to pay the highest closing costs in the nation. Depending on where a homebuyer lives, as many as four separate state and local taxes may be imposed on the recording of a mortgage. Many of these closing costs are fixed and must be paid by low, moderate, and high income homebuyers alike.

The net result is that these combined taxes make homeownership unattainable for many who aspire to achieve the dream of owning a home. New York is competing with states to lure and retain a young and well-educated workforce, and losing the battle due in large part to the state’s regressive tax structure. According to statewide census data released in March 2007, New York was one of only four states that failed to grow in population since 2005, with 46 of New York’s 62 counties experiencing more people moving out during 2005 than moving in for a total one-year loss of 225,766.

This issue has been thoroughly studied by the bi-partisan, blue-ribbon Commission on Property Tax Relief, which also found the need for a school property tax cap, along with other proposals for stemming the tide of ever-rising property taxes.

Now, it is time for Albany lawmakers to enact structural reforms to the tax system that will foster tax savings to property owners. Every step the state takes toward lower homeownership taxes is a step toward increasing the state’s quality of life and economic vitality.

The school property tax cap proposal will help make homeownership more attainable and appealing by allowing people to afford to stay in New York State. Offering individuals and families the prospect of meaningful tax relief provides a tangible incentive to purchase a home and grow roots in New York, which will certainly pay lasting dividends.

New York’s REALTORS applaud the governor for his leadership on this issue, and urge our legislators to follow his lead.

Preparing for the Harvest Means Planting Now!

When market conditions dry up, lay the groundwork for healthy harvests in the future.



By Mariwyn Evans

To everything, there is a season . . . a time to plant, a time to reap .

If you’ve had days when the sales figures in the MLS brought up visions of a fallow field in winter, it’s time to look at your market from a different perspective.

John Foltz (pictured above right), CRB, president of Realty Executives in Phoenix saw his market fall 35 percent in 2007, yet he’s not picturing market desolation. Rather, he remains an optimist.

“The attitude real estate practitioners convey to customers is directly related to the picture of the market they have in their minds,” he says.

Instead of dwelling on what others may see as drought conditions, Foltz is teaching his 1,500 sales associates to look at the current market as a fertile farm that just needs cultivation and patience.

Planting the seeds of future relationships now, when sales are slow, is what will ensure prosperity when markets improve, he says.

That doesn’t mean being a Pollyanna. Instead it means adopting an authentically positive attitude, which recognizes real estate is a cyclical business. Your market may be in the down leg of the cycle now, but it won’t be there forever.

“It’s pretty easy to fall into ‘Woe is me’ and wallow in the weak sales numbers,” he says. “And sometimes it’s not any fun out there in the mud doing the heavy work of planting, but if you don’t plant and cultivate your farm now, you’ll have nothing to harvest when the market improves.”

To help business grow, Realty Executives has instituted a continuous customer contact system, dubbed Executive Edge, and a system of accountability partners and personal coaches who prod associates to plant the seeds of relationships now so that they will have greater market share and profits when that cyclical curve starts upward.

Foltz isn’t the only real estate professional today who looks at big inventories and sees opportunities. Read on for our Top 100 Companies lists, and learn what other large brokerage leaders are doing to help ensure a better harvest in the years to come.





This article is from Realtor Magazine and was written by Mariwyn Evans, Senior Editor - July 2008

Tips for Lowering the Cost of Driving

Given that real estate practitioners tend to drive at least 20,000 miles per year, rising gas prices are hitting them hard in the wallet. Bernice Ross, real estate columnist for Inman.com, offers these ideas for mitigating your driving costs:

*Consider working from home a couple days per week, which could save upwards of 40 percent on fuel expenses.

*Use video tours or Power Point presentations to show listings to co-workers, rather than making an in-person trip to the property.

*Reducing your vehicle's weight by keeping unnecessary items at home.
Run numerous errands in a single trip.

*Screen buyers to ensure they visit only those homes that best meet their needs.

*Change your driving style; Edmunds.com reports that drivers can use 31 percent to 37 percent less gas by gently accelerating; and they can lower gas consumption by 12 percent to 14 percent by driving the speed limit.

*Take advantage of cruise control reduces gas consumption by 7 percent to 14 percent, while turning the car off while waiting uses 19 percent less gas.

*Fuel up in the morning, and reduce wear on your tires by ensuring they are inflated at the recommended levels.

*Stay cool; Experts note that turning the air conditioner off does not save gas.


Source: Inman News, Bernice Ross (07/18/08)

This article is from Realtor Magazine Online Edition - Daily News for July 21, 2008

Fed Acts to Assist Fannie Mae & Freddie Mac

A Primer on Credit Scores

While the nation's credit-scoring program is a critical factor in determining what individual borrowers pay in interest on credit cards and mortgages — and even how much they pay for insurance — new research suggests that most Americans still do not understand how the system works.

Respondents to a recent Consumer Federation of America/Washington Mutual Inc. survey largely did not know that credit scores are derived from payment histories, with many participants mistakenly believing that the number is influenced by such factors as income, age, education, and marital standing.

According to Anthony Vuoto of Washington Mutual Card Services, if all consumers took steps to boost their credit scores by at least 30 points, they together would realize as much as $28 billion annually in savings.

Source: Boston Globe (07/11/08)


5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage.

The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe. If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer's oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit http://www.myfico.com/.


What You Can Do to Improve Your Credit

Credit scores, along with your overall income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be.

So, keep your credit score high by doing the following:

1. Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, Knowing and Understanding Your Credit, visit http://www.homebuyingguide.org/.

Factiod & Quote

Mark Twain once said: "The man who does not read good books has no advantage over the man who cannot read them."

Fact: If you turn off the T.V. and instead study or read for just one hour per day, after 5 years you will have studied for 1,825 hours, the equivalent of about one normal working year involving forty-five 40-hour weeks. Wow! Think of what you could accomplish if you did that!