The Chichi Ahia Group at Keller Williams Real Estate has formed relationships with many of the area's finest financial institutions and will remain involved in every step of the financing process to insure that the highest level of service is maintained. It is not commonly known the extent to which the financing vehicle chosen can impact one's overall financial outlook.

To Schedule Your Private Consultation, Call: (215) 757-HOME(4663)

I’m sure you’ve heard from the news, your friends, your family and co-workers how horribly confusing the mortgage world can be.

In the last couple of years, over 100 mortgage companies have either gone out of business or went bankrupt.  Most mortgage programs have either been discontinued or the guidelines for qualifying have radically changed. Local banks have become more strict and many brokers are suffering from a reduced number of lenders to chose from.

What Types of Mortgages are Still Available?

Conventional

• Good credit
• The best interest rates
• These are the loans you see advertised on TV and in your local bank

FHA

• Government secured mortgages
• Very flexible with credit scores
• Interest Rates very close to Conventional

Alternative Mortgages

• No Income Verification
• Great for self employed individuals
• Interest Rates are slightly higher due to increased risk

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ATTENTION SMALL BUSINESS OWNERS
Business and Commercial Financing Still Exists!

• Commercial Property Refinance and Purchase Loans
• CASH OUT Re-Financing
• 30 Year Amortization
• SBA and business lines of credit
• Private and Hard Money

Many people lack knowledge about their credit scores, arguably the single most influential number in their lives. In fact, Forty-nine percent of 1,013 consumers polled do not understand that credit scores measure credit risk, according to a 2005 survey by the Consumer Federation of America and Fair Isaac Corp., the company that created the most widely used credit score formula called FICO.
The pie chart on the right shows the five categories that make up a FICO credit score. The detail below will educate you about what exactly goes into your credit scores.

1) Payment History: 35%
This category includes payment history information about several different types of accounts such as credit cards, retail accounts and installment loans. Many factors are considered including number of past due items on file, amount past due on delinquent accounts or collection items and severity of delinquency (how long past due). Below is a chart depicting the weight assigned to each year of an individual’s payment history:

2) Capacity (Amount You Owe): 30%
The FICO scoring model weighs capacity heavily because it knows that the majority of Americans who go bankrupt charge up their cards to the limits before they file. The FICO model considers three separate components of an individual's credit when assigning capacity points:

1. Installment balances compared to the original loan amounts.
2. Revolving account balance compared to an individual's revolving credit limit on an account-by-account basis; and
3. Total revolving account balances compared to an individual's total revolving limits.

It is in your best interest to keep balances low on all revolving credit and pay off debt within open accounts instead of closing accounts and consolidating it into one or two accounts with higher balances.

3) Length of Credit History: 15%
Even if you no longer want an older account, you should think twice about closing it. Lenders are looking for borrowers with long credit histories. Also, people with new credit should be cautious about opening many accounts. Rapid account buildup may look risky because of uncertainty in handling the credit.

Hard inquiries, or requests from creditors for a copy of a report, are tracked on the credit report for 24 months. But, only the inquiries from the most recent 12 months are included in the FICO score calculation.

4) Types of Credit: 10%
This category looks at the overall mix of credit such as credit cards, mortgages or consumer finance accounts. You should try to balance the mix but are advised not to open new credit accounts for balancing purposes unless necessary. It is unlikely that adding accounts will improve their credit scores.

5) New Credit: 10%
Approximately 10% of your credit score is based on how many recent new accounts you have established. This factor reviews:

1. Number of accounts
2. Length of accounts
3. Recent requests for credit report
4. Length of time since credit report inquiries were made by potential lenders

You should do all rate shopping in a two-week period since you can inquire an unlimited amount of times and it will only count once in that time frame. Also note that if you check your credit scores by going directly to the credit reporting agency, it will not affect your credit scores.

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5 Ways to Boost Your Credit Score

EVERYONE KNOWS BUILDING good credit takes patience and persistence. If you pay your bills on time and keep your card balances low over the long haul, you'll be rewarded with a solid score.

But what about quick fixes? Many of these tricks are scams. But there are a few sneaky ways to legitimately give your score a boost when needed. Here are five ways to do it:

1. Increase your credit limits
Credit utilization, or how much of your available credit you're using, affects 30% of your credit score, otherwise known as your FICO score. It isn't surprising, then, that credit experts insist you keep your balances low if you want to increase your credit score.

But here's a trick: Asking your creditors to increase your credit limits will have the same effect. Should the creditor agree to do it, the increase in available credit will automatically lower your credit utilization ratio, says Craig Watts, a spokesman for Fair Isaac, the company that calculates FICO scores.

Just how much of a boost your score will get is hard to predict. It depends on many other factors, including how long you've been using credit and how responsibly. Needless to say, using up those higher limits to get into more debt isn't a good idea.

2. Be an early bird
So you pay your credit cards in full each month. That's great, but as far as your credit report is concerned, you're still in debt. Why? Because each month creditors report to the bureaus your latest statement balance — i.e. what you racked up each month before you pay your bill in full, explains Watts. That dollar amount will appear on your credit reports and will be picked up by the FICO formulas. So if, for example, the balance on your latest statement was $2,000 and you sent the credit-card company a $2,000 check, your credit report will show you had a $2,000 balance for that month, not $0.

A smart way around that: Pay your card bills before the next statement date. That's typically mentioned on top of the bill, right alongside your due date. Because of the grace period creditors give — usually 20 to 25 days — your statement date is typically 20 to 25 days before your actual due date. (You can find out when your next statement date is by logging onto your credit-card account online or calling your creditor.) Once you know your statement date, pay off the full balance a day or so in advance. The result: The creditor will report $0 to the bureaus, bringing your credit utilization as low as possible and improving your score.

3. Use old cards occasionally
Obviously, the longer your credit history, the higher your score can be. (That's assuming you're doing all the right things like paying your bills on time.)

What you may not know: If you haven't used a credit card for more than six months, the creditor may start reporting the account as inactive. That doesn't mean the account will disappear from your report, says Watts. But when an account is inactive it isn't factored into all FICO formulas. One example: The credit utilization formulas typically don't pick up inactive accounts. Even if your balances are low or $0 on these cards, that won't be reflected in your credit score. "If you have open credit-card accounts, using those cards occasionally will keep them active with the bureaus and contribute to your credit score," Watts says.

4. Piggyback
If your credit history isn't all that long or spotless, adding a credit account with a long, positive credit history to your report will certainly boost your score. But how do you all of a sudden add an old account to your report?

It's easy. Just ask someone — a friend, relative or someone you trust and who trusts you — to make you an authorized user of a credit card they've had for a long time and handled responsibly, says credit expert Gerri Detweiler, author of "The Ultimate Credit Handbook." "If I get your card with my name on it, the whole entire history from day one will show up on my report as well," she says. "That's pretty beneficial. Even if they had it for 20 years, I'll get that 20 years of history."

The good news: Because you are only an authorized user, you are not liable for any card balances, Detweiler says. And the original card holder doesn't need to give you the card itself, so they can be sure you won't rack up debt in their name.

5. Mind your utility bills
It used to be that you had to skip paying your utility bills for months for that negative information to pop up on your credit report. Most utility providers — from phone companies and wireless carriers to electric suppliers — only reported delinquent accounts, Watts says. Not anymore. An increasing number of utilities have started reporting to the bureaus the same way as creditors do, which means paying your electric and cable bills on time has to be just as important as your credit-card bills.

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