11 Ways to Improve Your Credit Score

Purchasing a house is closely related to having a good credit history and putting your finances in order. According to an article in Business Insider, the average household credit debt for Americans in 2009 was nearly $20,000, and recently has been reduced to approximately $15,000. Reducing credit debt takes time and often depends on spending habits.

Business Insider’sSimple Guide To Improving Your Credit Score” offers 11 tips to help you start rebuilding your credit.

  1. Start with the largest debt first. A big portion of your credit score is based on your revolving debt. Paying off a big chunk of it would most likely save you from paying high interest rates.
  2. Make payments on time. Whatever you do, do not miss a payment. Payment history makes about 35% of your credit score, so it is crucial to meet those due dates.  
  3. Get creative if you miss payments. Call your lender and try to convince them to remove the red flag from your account. However, don’t make this a regular practice because you might get away with it once, but next time it might hurt you.
  4. Pay more than the minimum balance if you can. Paying the bare minimum on your balance will not help you much, so try to put a little extra towards what you owe. This way you will pay off your debt sooner while avoiding increased interest rates. 
  5. Consider a secure credit card. A secured credit card is a good option if you intend to rebuild your credit score. You will be asked to pay a certain amount upfront, which is used as collateral, and receive a credit card with that amount available to spend. Do your research and try to find a card without an application fee and with a low annual fee. Image
  6. Apply for a credit builder loan from a local bank or credit union. Another credit-building strategy is a credit builder loan. With this type of loan you will not get access to the money right away. The money will be put in an interest-bearing account, and the bank will hold it there while you make monthly payments on the balance. Once you pay off the balance, you get the money.
  7. Get an authorization on someone else’s account. You can use your spouse or a family member’s account to build some good credit on your record. Make sure you approach someone you trust because if they are not reliable, your credit score might be negatively impacted as well.
  8. Fix errors on your credit reports if you find any. If credit bureaus have different information on your record, this can completely hurt your score. Take advantage of the annual free credit report from Annualcreditreport.com which contains a report from each of the three credit bureaus.
  9. Keep old accounts open even if they’re paid off. Closed accounts will show on your record and can play a factor on your score. FICO recommends that you keep paid off accounts open because it is an evidence of a long-term good behavior on your end.
  10. Track your score for free. There are services that provide updated scores monthly where you can track your improvement over time.
  11. Do not take additional credit to pay off debt. Applying for new loans to pay off current debt is not a good idea. In fact, it will hurt your score instead of helping you get in a better shape.

The main thing to remember is that rebuilding your credit score will not happen overnight. You will need to be patient and consistently make the right decisions until you reach the score you desire. In the meantime, consider these tips from the Business Insider and learn more online.

For any questions about mortgages or a consultation with one of BluFi’s mortgage bankers, we would be happy to talk to you. Call us at 1-800-644-7779.

Understanding the Five C’s of Credit – Why it matters to you

Have you ever wondered how a lender determines if you qualify for a loan or not? Of course, lenders look at your creditworthiness and although you may think that this is solely based on your credit score, there is actually a lot more taken into consideration. Lenders look at what is referred to in the industry as the five C’s of credit to determine your creditworthiness. We found a simple and straightforward definition of the five C’s in Investopedia.com. The use of the five C’s incorporates real data about you and also subjective impressions about you.

Here are the five C’s defined and how lenders use them:

  1. Character – This refers to your reputation. It may be determined by where you work and for how long, your level of education or possibly your references. Different lenders can use different criteria to determine an individual’s character.
  2. Capacity – This refers to your ability to repay a loan and takes into consideration your debt-to-income ratio – your monthly debts compared to your monthly income. Generally, lenders will have specified cut-offs that will affect the interest rate you qualify for or if you qualify at all. You will be considered more of a risk as your debt-to-income ratio rises. The reasoning behind this is that the higher your debt-to-income ratio is, the less likely you are able to cover unexpected expenses or loss of income which may affect your ability to make your monthly mortgage payment.
  3. Capital – Your down-payment is your capital. The more you put down on your home, the less likely you are to default or stop paying on your loan. Your capital is a measurement of how much you have invested in your home. The more you are personally invested in your home, the more likely you are to pay off your loan and less likely to default. Beautiful family portrait
  4. Collateral – This refers to any other assets that you may have which could be other properties or cash. Having other assets will help you secure a loan, and implies that you have the ability to fall back on these assets in case you come across unexpected expenses or loss of income. Having more collateral implies that you are more likely to make your monthly payments and less likely to default on your loan.
  5. Conditions – These are the conditions of your loan which include interest rate, principal and term.

Whether you are buying your first home, a second home or refinancing your existing home, the five C’s of credit will be taken into consideration by lenders evaluating your credit application. Knowing how the five C’s impact loan approvals will help you improve these factors so you get the loan options and rates you want.

Where do you think you stand with your five C’s of credit? Do you think you are ready to take a step toward home ownership? Find out more information about our home loans and start the process here: http://www.blufi.com/resource_center/buying_a_home.html.

BluFi Unveils FAB(ulous) Approval Program For Home Buyers

Many real estate markets have become very competitive in the last year, with bidding wars, cash buyers, and a need for fast closings. To help our clients keep their edge in this environment, BluFi Lending is excited to announce our new Forward Advantage Buyer (FAB) approval program. It is designed to help homebuyers stay competitive by providing underwriter approval before buyers look for their dream home. We think it’s FABulous because once the home buyer finds their perfect home, they can immediately put down an offer with no waiting.

Here are the highlights of FAB:

  • The goal of the program is to get homebuyers appropriate loans for their budget, based on verified numbers. Like all of our programs, transparency is fundamental!
  • FAB comes with a full home loan approval by an underwriter minus appraisal, title, and escrow so borrowers can immediately put in an offer when they find a home.
  • With a FAB approval, BluFi can close on a loan 17 days after the buyer chooses their dream home and opens escrow.

How is FAB better?

  • With a FAB approval, homebuyers know the true loan amount they qualify for. No guess-timates followed by disappointment. Our clients know their qualified numbers up front.
  • Real estate professionals and sellers are more confident in FAB-approved buyers because an underwriter-approved loan means a quick close.

How is FAB different?

  • FAB is the strongest approval available because it is based on verified credit check and documentation and is approved by an underwriter prior to finding an actual property. More preparation up front means FAB approved buyers are able to make offers and close on loans much faster.

“The FAB program is our way of putting families in the right home with the right loan,” said BluFi Lending President and CEO, John Lee. “We’re helping our clients stay competitive when they shop for their home, but we’re also acting as a responsible lender. In the past, many people were given loans that were too expensive without the proper education on their options. With early input from underwriters, the FAB program will help borrowers make smarter financial decisions and choose the loan, and the home, that’s perfect for them.”

If you have any questions about the FAB program or would like a free consultation with one of BluFi’s mortgage bankers, we would be happy to discuss your needs. Give us a call at 1-800-644-7779.

 

Overview of the Housing Market – an Interview with Real Estate Professional Jeanne Redlinger

 

We sat down with real estate professional Jeanne Redlinger from Richard Realty Group to discuss the latest trends in the housing market and get her thoughts on buying a home. Jeanne has more than 10 years of experience in the industry and has some great expert advice for home owners. We hope you find her tips valuable! If you have any additional questions, please leave them in the comments section below.

  1. Can you provide an overview of the market right now (what are some common trends you are seeing – rates, inventory etc.)?
  • As most of us have seen, rates have increased in the last month or so. Inventory has increased a bit as well. It hasn’t been as chaotic with all the multiple offers on so many properties that we’ve seen in the last few months.  Properties are staying on the market a little longer and sellers are still getting great offers. While things are easing up, it is still fairly competitive.
  1. Considering the competitive market right now, what are your top tips for buyers to make their offer more appealing to a seller?
  • Keep the escrow period short.  Offer 30 days or less and make sure your home loan lender can perform before committing to this timeframe.  That’s one of the reasons my buyers choose BluFi, because they stand by their word when it comes to closing dates.
  • Present an offer with a fully approved loan.  Many times buyers will just make a quick call to a lender and get their prequalification letter, but sometimes that isn’t good enough, especially if you’re up against other buyers for the same property.  Use a lender that puts together a very detailed approval that can help sellers feel more comfortable choosing your offer over other offers.  Using a BluFi loan with a client we even had a VA loan approved over an all-cash offer and three other conventional offers with no money down!  We had a positive experience with a BluFi’s loan officer who was always available to answer questions in a timely fashion and guide us throughout the whole process.
  • Communication is huge in this process.  You always want to keep the sellers and their agents comfortable and confident that everything is moving ahead as scheduled, so your agent and lender should both be strong communicators.
  1. What are some things buyers should be wary of when they are looking to purchase a home? 
  • Start with a home inspection.  It’s crucial to know the condition of the property. Read through all of the disclosures!  This is your chance to find out anything that could affect your purchasing decision.  You don’t want to find out any major problems after you close.
  • Make sure you’ve discussed your financial situation with a lender like BluFi and you’re confident that when you present an offer, you’re in a position to close the deal.
  1. What’s the best advice you can give for someone who is looking to buy a home?
  • Coming from a lending background myself, always understand exactly what you are approved for before you start looking.  No sense in looking at property that’s too expensive.  I started in the lending industry back in the mid 70’s through the 80’s. Then in the year 2000 I worked again in the lending industry for more than three years before I decided to get my real estate license and sell homes. My lending background has helped me tremendously in recommending great lenders to my buyers.  It’s one thing to make an offer and get it accepted.  It’s a whole other thing to make sure you have a solid loan in place to close the transaction.

Jeanne concluded with these real life examples to share her experience with our team at BluFI. The extra vote of confidence and recommendation from Jeanne is so appreciated! Thank you, Jeanne!

Jeanne Redlinger Realtor, Richard Realty Group

Jeanne Redlinger
Realtor, Richard Realty Group

“I also want to mention a couple of transactions that were closed by BluFi for my clients this past year.  One involved a woman who was on workman’s comp, had social security income, a daughter with a disability who also had social security income, and a small salary working at a store.  Our lending team at BluFi was able to get this family a down payment assistance loan through the state of California.  They went above and beyond to put this difficult transaction together.  Their efforts mean this family now has a beautiful place they can call their own.

I also had another buyer who ended up having to present an offer on a property and close in 21 days.  It had to move fast. BluFi made it happen within that tight time frame and made another family so happy.  This particular family made offers on eleven other homes before they got this one.  Each time our BluFi mortgage banker was available to put together the preapproval letter and never let us down.  I can always count on the professionals at BluFi Lending to be there whenever my clients need them.”

-by Jeanne Redlinger
Realtor, Richard Realty Group
Contact: 760-518-4434 (m); jeanneredlinger@gmail.com

BluFi Recognized by the Asian American Community for its Leadership and Service

John BluFi ABA Award_croppedBluFi is proud to announce some of our latest activities related to the Asian American community:

Award: BluFi Lending President and CEO, John Lee, was awarded the Emerging Business Award at the California Asian Business Summit’s kickoff gala dinner, held Thursday, September 19th at the Westin Gaslamp Quarter Hotel. The award is new this year and was created to honor individuals who demonstrate community leadership and to recognize outstanding businesses experiencing rapid growth. While we’re proud of our company’s notable success, we’re especially grateful to be honored for our community leadership, and appreciate this recognition from the Asian Business Summit.

The summit was organized by the California Asian Pacific Chamber of Commerce (CAPCC) and the Asian Business Association (ABA), San Diego, and brings together corporate, business, and government leaders to explore global economy issues and highlight the impact that Asian Pacific businesses have on the California economy. Both the ABA and the CAPCC serve to empower the Asian and Pacific Islander business owners and professionals throughout California, and work to create opportunities to help their businesses thrive.

John has been recognized as a community leader in San Diego since establishing BluFi Lending in 2009. Despite the challenges the financial and mortgage industries have faced since this time, John has built a thriving lending business founded on integrity and transparent lending.

Sponsorship: Another organization dedicated to the Asian American business community is the Asian Real Estate Association of America (AREAA). This year BluFi Lending sponsored its 2013 AREAA National Convention. The event focused on the latest real estate trends, business strategies, market innovation and networking. It took place in Los Angeles on September 19-21, and featured prominent guest speakers including Lisa Ling and approximately 2,000 real estate industry attendees from around the world.

New office: As we announced previously, BluFi opened a branch in the Scripps Ranch community of San Diego that is managed by bilingual Korean-American Benjamin Lee, and staffed by bilingual employees. The branch caters to the Asian-speaking community in their native languages, allowing for a deeper understanding of the lending process. This trailblazing move further demonstrates leadership and service to the local community by expanding the definition of integrity and transparent lending.

We’re excited to support the growing Asian American community in our business, and appreciate the recognition we have received as a company!

BluFi Appoints Stacy Hunjadi and Mike Cattivera to its Executive Team

As one of the fastest growing direct lenders in California, BluFi Lending is pleased to welcome Stacy Hunjadi and Mike Cattivera. They will be joining the executive team and its dedication to championing a transparent and fast lending process for BluFi customers and real estate professional partners.

BluFi Lending names Stacy Hunjadi as vice president, division manager for California and Mike Cattivera as vice president, director of builder and real estate relationships at the company’s Carlsbad headquarters. As members of the executive team, both Cattivera and Hunjadi will create and develop strategic partnerships and relationships within their areas of expertise.

Stacy Hunjadi and Mike Cattivera

Stacy Hunjadi and Mike Cattivera

Hunjadi has been working in the mortgage industry for more than 21 years. She sees her new role as one of facilitating sales growth and working with the community. Her focus will be on the community, real estate professionals and home buyers in today’s purchase market. “BluFi is a strong leader in the mortgage industry. At the same time, BluFi provides a very family-like atmosphere, with a staff that cares about its relationships with customers and the community,” said Hunjadi.

Cattivera began his career in the real estate industry, but moved to the mortgage business, where he has stayed for more than 25 years. Cattivera will focus on helping BluFi throughout the Southwest U.S. to grow their strategic relationships and support builder and real estate partners. “Two key things brought me to BluFi, their commitment to the local community and their culture,” said Cattivera. “It was important to me to work with a lender with local branches and people who cared about their community.”

BluFi Lending CEO John Lee sees both executives adding tremendous industry knowledge and expertise to the growing team at BluFi. “Stacy has a strong track record of sales success in purchase markets and that takes solid skills in relationship sales, business and reputation management. Her addition to our executive team is part of our continued effort to hire the best talent in the mortgage industry,” said Lee. “Mike’s history of developing win-win strategic relationships will be beneficial as we continue to expand our company.”

 

Five Ways to Save Big on Your Mortgage

According to HSH.com, a mortgage payment is about 30 percent of the average American income. This is likely the biggest bill your family pays every month, making it critical to be aware of the variety of options you have to reduce your monthly mortgage payment. This week we came across an article in Yahoo! Homes, Five smart tips to reduce your mortgage costs, discussing ways to save on your monthly payments.

Consider these five tactics to reduce your mortgage payments: bigstock-Caucasian-couple-in-kitchen-wi-8.7

  1. Refinance – this is the most common way for homeowners to lower their mortgage payments. If your interest rate was higher when you bought your home, refinancing is a good option to look into when trying to save money on your mortgage.
  2. Shorten the term of your loan – often short-term loans have lower interest rates that in the long run can save you money. If you are comfortable with making larger monthly payments, this might be a smart tactic to consider.
  3. Make extra payments – this option might be challenging if you are on a tight budget, but it could shorten the term of your loan. Putting extra money on your principal loan will help you pay it off sooner. Remember that every expense adds up, so if you can save from little things you can live without, use the money for those extra mortgage payments.
  4. Eliminate Private Mortgage Insurance (PMI) – PMI cost varies between .5 to 1 percent of the entire loan. PMI is also based on your home’s value – if you’ve worked on home improvement projects to increase the value of your house, this can compensate for high PMI charges.
  5. Reevaluate the value of your home – if you think your home’s value has dropped since you purchased it, consider reevaluating it. This is a good way to save money on property tax and reduce your monthly payments.

Refinancing is one of the most common approaches homeowners consider when trying to reduce monthly mortgage charges. According to Five smart tips to reduce your mortgage costs, there are other smart ways that can help you save money. To learn more, read the article online.

For any questions about mortgages or to speak with one of BluFi’s mortgage bankers, give us a call at 1-800-644-7779.

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