Four Ways to Optimize Your Credit Profile

Whether you’re looking for ways to dig out of your financial hole or ways to avoid getting into one, the importance of actively managing your credit and debt profile has never been greater. Americans have become well-versed in asset management but not necessarily liability management. Until recently, easy access to credit has made our current generation feel immune to the real risks of overextending your credit.

In today’s difficult economic environment, as banks get more restrictive about who gets approved for credit and which consumers get the preferred rates, we are advising all our clients to spend more time analyzing the types of credit they have and how it is used. The reality is, we all need to change our behaviors and adapt to the realities of the current environment. When it comes to liability management, here are some simple first steps to take from credit consultants, Approvalguard.com:

1. Understand How Credit Works. Now is not the time to be content with understanding 80% of what you need to know about your credit. Ninety-four percent of consumers are challenged with understanding the basics of how personal credit works. In most cases, they build credit over a lifetime of trial and error. Invest some time in researching and understanding the current credit climate and/or contact your financial advisor or a trained credit professional.

2. Continually Evaluate and Monitor Your Current Credit Profile. The second step is to evaluate your current credit and debt profile and establish a plan based on your short- and long-term credit needs. Continually monitoring your credit report and profile is no different or less important today than getting a physical exam by your doctor.

3. Optimize Your Credit. Each of your debts should be periodically reviewed and analyzed. Are there options you can take to improve your overall credit profile so that you’re more desirable to creditors for their preferred interest rates? Should you consolidate some of your debt? Once you strengthen your credit and debt profile, do you have options on your home, auto and credit cards to negotiate lower interest rates and terms that would save you money monthly?

4. Rethink New Purchases. Excellent credit is like an insurance policy. When you need to use it, you want to qualify for the preferred interest rates and terms. Maintaining your credit “insurance policy” is critical for special purchases like a home, car or major appliances when needed. Don’t wait until there’s an immediate need because your chance of making a material change in your profile overnight is very difficult.

Remember, the credit environment just isn’t what it used to be. There has never been a more critical time to build, optimize and manage your personal credit and debt profile. If you would like to learn more, please e-mail us, and be sure to pass this article along to your friends, family and colleagues. We can all benefit from this important information.

Winchester Market Stats as of 12/03/09

Local Winchester, MA real estate market activity and real estate trends.

Number of properties currently on the market in Winchester as of 12/03/09

Single Family Homes: 64 Properties
Condominiums: 24 Properties
Multi-Family Homes: 4 Properties

Number of new Winchester Real Estate listings in the last month:

Single Family Homes: 6 Properties
Condominiums: 4 Properties
Multi-Family Homes: 0 Properties

Average sale price for Real Estate sold in Winchester, MA over the last 6 months:

Single Family Homes: $789,777
Condominiums: $376,068
Multi-Family Homes: $602,500

Treasury Announces New Short Sale Process

The U.S. Treasury Department on Monday released a plan to speed up and encourage Short Sales as a means to help families avoid foreclosure. The new guidelines do represent a significant improvement over the current situation.Short Sales have been difficult to close, and these new measures are a huge step in the right direction. One major highlight: A lender must give a yes or no answer to an offer within 10 days. Also included: a moving allowance, incentives for sellers and lenders, commission rules, and a stipulation that releases sellers from debt liabilities. Here's an initial Reuters news story outlining the new policies.

Winchester Market Stats as of 11/13/09

Click here to view all listings

More information on Winchester homes:

Number of properties currently on the market in Winchester as of 11/13/2009:

Single Family Homes: 75 Properties

Condominiums: 24 Properties

Multi-Family Homes: 3 Properties

Number of new Winchester Real Estate listings in the last month:
Single Family Homes: -16 Properties

Condominiums: -9 Properties

Multi-Family Homes: -2 Properties

Average sale price for Real Estate sold in Winchester, MA over the last 6 months:

Single Family Homes: $808,939

Condominiums: $391,932

Multi-Family Homes: $497,500

Tax Credit to Benefit Both First Time Buyers and Current Homeowners

Congress extends deadline to June 30, offers $6,500 for existing homeowners

By Annalisa Burgos, FrontDoor.com | Published: 11/03/2009

First time homebuyers aren't the only ones who can claim a tax credit when they purchase a home. Under a bill approved by Congress this week, current homeowners will be able to enjoy the tax break too, if they qualify.

Congress voted to extend and expand the popular first time homebuyer tax credit, which was set to expire on Nov. 30. Buyers looking to cash in on the $8,000 tax benefit would have had to close on their purchase by then. Lawmakers also approved increasing income limits. President Barack Obama is expected to sign the bill into law on Friday. The new program is estimated to cost $11 billion. Here are the details:

FIRST TIME BUYERS

Credit: Equal to 10 percent of the home's purchase price, up to $8,000

Who Qualifies:

• Those who haven't owned property in the last three years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until June 30, 2010, to close on the purchase

CURRENT HOMEOWNERS

Credit: Equal to 10 percent of the home's purchase price, up to $6,500

Who Qualifies:

• Those who have owned and lived in their principal residence for at least five consecutive years during the past eight years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until June 30, 2010, to close on the purchase

In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac -- set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.

What this all means is that many more buyers qualify for the tax credit. So what are you waiting for? If you're even remotely considering buying a home, now's the time to do it. Don't let the first time buyers have all the fun.

Information regarding "free" credit reports

Don’t get fooled again: freecreditreport.com aims to make you spend money

By Michelle Singletary
Washington Post / November 3, 2009

I’ve been meaning to pull my credit reports. I, like so many others, am concerned about identity theft or uncorrected errors. When I finally got around to checking my reports, I knew to go to http://www.annualcreditreport.com/. I have not been fooled by those clever commercials for freecreditreport.com with the goofy guy playing a guitar complaining about how his life is messed up because he didn’t check his credit report.


But the Federal Trade Commission has received many complaints from consumers who were misdirected from the official site. Every consumer is entitled to a free credit report every 12 months from each of the three nationwide consumer reporting agencies: Equifax, Experian, and TransUnion.
In an effort to help keep consumers from ending up on imposter sites or falling for promotions for free credit reports that aren’t really free, the FTC is seeking public comment on proposed rules. You have a chance to weigh in. This isn’t a trivial matter. These rules will dictate how you get your credit reports. Most of what the FTC is proposing will make things better, but the agency needs to be tougher.
Said Katherine Armstrong, an attorney with the FTC: “We want to know if we got it right.’’
On one important rule, the FTC has it only partly right. It wants to prevent the credit bureaus from offering any product or service until after consumers get their free reports. The law currently permits them to advertise their proprietary products and services through the centralized source, annualcreditreport.com.
Once you’ve followed directions and entered personal data, you encounter advertising for credit scores and credit monitoring services. Then you have to decline the offers before obtaining your credit report. I had to click through two Web pages of such marketing before getting to my report for one bureau.
Although the FTC said it recognized the potential for confusion from such marketing, it initially chose not to restrict it. Now, the FTC is proposing that any advertising or marketing be delayed until after consumers have obtained their reports and that the credit bureaus remove the links to their websites from annualcreditreport.com.
On the official site, bold red lettering says “Start here to view and print your credit report now.’’ Some people assume they should click on the credit bureau links below that wording. If they do, they leave the free site. Another proposed rule would require that companies prominently inform consumers they have not landed on the official free site.
The FTC should remove all advertising before, during, and even after the process of getting a free credit report. People should be able to get their reports and exit the website without having to go through a gauntlet of sales pitches.
If you’re with me, let the FTC know.
Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com.
© Copyright 2009 Globe Newspaper Company.

Homebuyer Tax Credit Update

An $8,000 federal tax credit for first-time homebuyers that is set to expire at the end of the month inched another step closer to getting extended until April. The Senate voted 85-2 yesterday to move the bill to a final vote, and senior members of Congress said that they expected the bill to pass next week.
In what officials say is a move to stimulate the economy, the measure might even be expanded to give a $6,500 tax credit to homebuyers who have lived in their previous home for at least 5 years.
Prolonging the tax credit is sure to be welcomed by home builders like Toll Brothers and KB Homes, as well as financial institutions like U.S. Bank, whose mortgage-revenue rose nearly 5% last quarter.