Q:  What do you advise a financially fit homebuyer to do to increase their credit score or make themselves more attractive buyers, to qualify for the lowest mortgage rates?

A:  A FICO score of 700 (FHA)/740 (Conventional) or better qualifies you for the lowest rates. In fact, it qualifies you just as well as a higher score, so if you’re at or over 700/740, there’s no loan qualification rationale for investing effort into boosting it.  But these are firm breaking points. The difference between a score of 698 and a score of 700 (in an FHA loan scenario) can cost you a quarter of a point in interest, or thousands of dollars over the life of your mortgage.

I’ve found that people asking about how to boost their credit to qualify for the best interest rates is similar to people asking me how to lose weight: I tell them the truth, then their eyes glaze over when I give them the straight dope, no magic bullets.  No one wants to hear: eat vegetables, cut the sugar, and exercise; similarly, they don’t want to hear pay your bills on time, every time.

But I’ve been asked this question a lot recently, so here goes, anyway!
    
1.    Pull your reports online – get them for free, no strings attached, at the government authorized website AnnualCreditReport.com.  This doesn’t get you your actual FICO scores, but it does get you the content of your report. Look for errors that could be depressing your score, like accounts that don’t belong to you, balances that are actually lower than reported, old debts that are paid off that should have been removed entirely (7 years for credit cards, 10 for bankruptcies).

2.      Consider reopening accounts you thought were open but have been closed because you haven’t used them in so long - it will help boost your utilization ratio, one element of your credit score that is dependent on how much available credit you have.

3.      Pay down some debt.  This both decreases your debt-to-income ratio (36% is the goal, including the proposed mortgage payment) and increases your credit score, if you do it right (see the next tip).

4.     Don’t close any accounts.  Instead, spread your debt out. The ideal utilization ratio is about 20-30% of your available credit overall, and on any given account.  Closing accounts reduces the amount of credit that is available to you, so it makes it look like you’re closer to being maxed out.

So if you have one card that’s near its max and several others that have zero balances and you’re trying boost your score a bit, quickly, consider balance transfers to spread our your debt more evenly, aiming for 20-30% of the available credit on each card.

5.     Use your credit regularly – and pay it on time, every time:  Having a good FICO score doesn't happen because you have sound personal finances, including no debt. FICO scores are a measure that shows that you have a history of responsibly using and managing and repaying your debt on an ongoing basis.

6.      Finally, check in with your mortgage broker.  Have them pull your report and score, as the report they pull is the one they’ll have to go by in the final analysis.  If you’re really close to a score level higher, that would empower you to qualify for a lower rate, they can actually run a credit diagnostic on your score and generate some recommendations for which actions you could take to raise your score by the needed few points. Then many of them can do what’s called a ‘Rapid Rescore’ – once you’ve paid that bill off, they can actually submit a request directly to the credit bureaus to update that information and your score in just a few days.

None of these tips will get someone with a 500 credit score to a 700 (other than a massive debt reduction program).  But if you’re trying to get a little boost to get you over a credit score hump, these can be potent, and save you beaucoup bucks in interest.

It occurs to me that with today's low interest rates, reasonable prices and the large inventory of vacation homes, it is a great time for Baby Boomers to
purchase their retirement home in a sunny environment. It will be years before
these three positive items for the purchase of a vacation or retirement property
will again be in perfect alignment.

This is also true for single family homes in Columbus whether it be a "move up" or first home. Interest rates are so low right now that the monetary benefits are far better than the incentive credits that were available at the beginning of the year.

If you are thinking about purchasing or selling a home, please call us to
discuss the pluses and minuses and a strategy for the present or future. We can help you here in Ohio or advise you about other states.  We can also find a good agent in any part of the country so that you can be assured of the best real estate advice if you want to buy property in an area you are not familiar with.

We promise, straight talk, sound and honest advice and superior marketing every time we consult with you.

For a new purchase, closing within 30-45 days, the 30-year fixed rate ($100-$417K) is 4.125%.  The 20-year fixed rate is 4.00% and the 15-year fixed rate is $3.75!

The Jumbo 30-year fixed rate is 5.125%

These rates have no points or origination fees!

The minimum score on all conforming loans with less than 20% down or 20% equity is not 680.  Scores between 700 and 739 may be slightly higher than those of the special rates being offered.

Of course, all rates are subject to change at any time without notice and are for borrowers who qualify via credit, ratios and standard program guidelines.

The important thing to note is that these are historic rates -- even more beneficial to buyers than the first-time-buyer tax credit of $8,000 from earlier this year!  Between these fabulous rates and the rock bottom real estate prices in the Columbus area, you won't find a better time to buy a home!

To contact David Arocho about this -- or refinancing your current mortgage -- call him at 614-781-3434 ext. 275 or email him at david.arocho@bankofamerica.com.

 I recently returned from the Keller Williams Family Reunion in New Orleans, Louisiana.  Family Reunion is the name that Keller Williams gives its yearly international convention. 

Approximately 7000 agents attended this event.  The highlights were Gary Keller's "vision speech" for the future, a rousing and enthusiastic general session, informative financial forecasts and over 100 classes and breakout sessions to further agents' experience and improve their service to and for their clients.   

On top of the exceptional education opportunities, we found time to enjoy the French Quarter and have coffee and binets at the Cafe Du Monde which is a very popular outdoor cafe.  A brass quartet played some jazz as we enjoyed our coffee and sweets.  We also had an excellent view of the famous St. Louis Cathedral in Jackson Park. 

Later we took the Katrina tour. Viewing the re-building of this great city seemed particularly appropriate since the overall theme of the Family Reunion was "Overcoming Adversity".

Mark your calendars for the annual Pancake Day on Saturday, March 6, 2010 from 8-3 pm.  The event will be held this year at Worthington Kilbourne High School.  Tickets are $5 presale and $6 at the door.  This is the 9th year for Pancake Day which is a joint fund-raiser for both Worthington Kilbourne and Thomas Worthington High School athletic teams.

The money raised from this event helps the athletic teams purchase equipment that is not funded by the school district.  Wolves Inc. and Cards Inc, the umbrella organizations for the high schools, also use the money to fund large projects such as the moving sign outside Worthington Kilbourne.

Plan to attend this event which includes breakfast (or lunch), entertainment, a silent auction and a chance to visit with old friends and neighbors!

I was reading some information from Barbara Corcoran who owned The Corcoran Group (real estate company) in New York City and, in 2001, sold the company for $66M.  She appears regularly on NBC's "Today Show" and is an investor in ABC's "Shark Tank".  (She obviously is a savvy real estate entrepreneur.) Barbara is predicting that the real estate market will make up most of the loss of the last four years in the next 18 months.  I certainly hope she is correct, however I am not as optimistic.  I my experience, real estate prices go down quickly, but tend to go up slowly.

I do agree with her that the absolute best prices for real estate are available today, at least in Columbus, Ohio.  That, in addition to the current 5% interest rates, make it the best time to invest or purchase real estate here. 

Gary Keller, founder of Keller Williams Realty, has been saying for the past few years that the real estate market will begin to return to an upward direction when affordability returns.  I feel that we have affordability in Columbus.  I don't think this has happened yet in Phoenix, Las Vegas and some other high end markets. 

We are also observing a pent-up demand to purchase a move-up property for families hoping to purchase a larger home and also an increase in senior sellers who are looking to downsize.  Hopefully this is a perfect situation for both. 

The good news is this: Columbus, Ohio may not have skyscrapers or Broadway, but it is affordable and, as always, it is a great place to call home.

Changes are coming to the Worthington Middle School programs.   Beginning in the 2011-12 school year there were will be 3 instead of 4 traditional middle school programs.  Perry Middle school, which has been for the last few years both a traditional and alternative school, will now be solely an alternative program. 

Perry Middle School's innovative alternative program, known as the Phoenix Program, has become very popular with Worthington families and will continue to grow under the new plan.  Students who would have attended Perry will now attend McCord Middle School. 

The team-teaching method, which has been in place in Worthington's middle schools since the 1970s, will be discontinued. These changes are being made to save money.  According to a team of educators, who suggested these changes, this will help make the schools more effective and efficient.

What do you think of these changes?  We'd love to hear your comments!

I was going through some articles I had saved over the years and found this small sidebar from a larger article that appeared in the June 2005 issue of Good Housekeeping.  If everyone had read this back then and followed this excellent advice, many people would not be in the financial straits in which they find themselves today and the number of foreclosures might be greatly reduced.

I'm going to reprint the article exactly as it appeared back then.  It's worth reading.

Are you borrowing too much?

by Jennifer Wysmuller

If you need money, a home equity loan can make a lot of sense.  You tap the value of your home to get a cash infusion and the interest is tax deductible.

But it can be too much of a good thing.  Home equity borrowing is at an all-time high, and many people are getting in over their heads, jeopardizing their most valuable asset, says Karen Gross, a law professor who specializes in debt and other related issues.  What's more, banks and other financial companies are pushing these loans more than ever -- one bank intends to entice borrowers with free maid or lawn service.  Worse, some shady companies allow consumers to borrow as much as 125 percent of their home's value.  Here's what you need to know to make sure you don't get stretched too far.

Stick with the tried-and-true formula.  Conservative companies won't lend you more than 80 percent of the value of your home.  Borrow in excess of that, and you may find that you end up owing more than your home is worth -- a big problem if you have to sell unexpectedly in a down market.

Know your home's worth.  Some appraisers hired by lenders may inflate the value of your home.  If you have any doubts, hire an independent appraiser, for about $200 to $500.

Watch out for fluctuating interest payments.  A home equity line of credit usually comes with a variable rate; if interest rates rise, so will your payment.  Before you borrow, be sure to calculate what your highest monthly payment could be.

In case you are wondering if this is a good time to buy a home, this graph should help to put things in perspective!

To help you make a valid comparison, consider this:

Monthly payments on a $200,000 (30-yr) loan in 1981 at 16.5% would have been $2,770.  Today, at 5.09%, your monthly payment would be only $1,084.

Conversely, if you could afford a monthly payment of $2,770, you could have borrowed $200,000 in 1981;  today, you could borrow $511,000!  That translates to being able to buy a $555,000 house today with 10% down for the same monthly payment as a $220,000 home (with 10% down) in 1981!

This graph is courtesy of Brad Rich of Wells Fargo Mortgage.  You can reach him at 614-888-2038 or Brad.R.Rich@wellsfargo.com.

The massive snowfalls we have been experiencing over the past few weeks have turned Central Ohio into a winter wonderland.  Icicles hanging from trees create a magical effect, especially when the sun comes out (this actually happened on Sunday!) and makes the icicles sparkle.

But what about the icicles that are hanging from the eaves of so many of our homes?   Far from being magical, these can be signs of a phenomenon known as "ice damming", which can cause minor or major leaks resulting in roof and insulation rot, ceiling and wall damage, attic flooding, mold and more.

Ice dams usually occur after a heavy snowfall and several days of freezing temperatures.  Warm air that builds up under the roof or in the attic will heat the underside of the roof causing the snow or ice on the roof to melt.  The resulting water runs down the roof under the snow until it reaches the roof overhang, which is very cold.  The melted water then refreezes and forms a dam of ice, behind which the water ponds.  This ponding water can back up under the roof covering and leak into the attic or along the exterior walls.

Prevention

The way to prevent ice dams is to keep the entire roof of the house the same temperature as the outside, or the eaves.  This can be accomplished by increasing ventilation, adding insulation and sealing off every possible air leak that might warm the underside of the roof.  The general recommendation for proper insulation is 1 square foot of vent for every 150 feet of attic floor area.  (This can vary according to area of the country.)  Some experts recommend installing an electric vent fan that works on a thermostat.  The fan will pull outside aire into the attic to keep the inside temperature consistent .

What Not to Do

• Do not try to "chip away" the ice.  This commonly leads to shingle or gutter damage.
• Do not install heaters or mechanical equipment in the attics.
• Do not use salt or calcium chloride to melt snow on the roof.  These chemicals are corrosive and can damage metal gutters, downspouts and flashings, as well as nearby grass and plants.
• Do not get on the roof to try to remove snow or ice.  This can cause roof damage and it is not safe for you!

What to do if ice dams are causing water damage (short term solutions)

• Hire a qualified contractor to carefully remove most of the snow from the roof above the ice dam.  He should not touch the roof with equipment or walk on the roof, if possible.  Cold roofs are brittle and are prone to damage. The contractor may decide to create one or two grooves in the ice dam to allow the ponding water to drain off. 
• Make a "snow melt sock" by cutting the legs off a pair of pantyhose, filling with calcium chloride ice melter and laying it onto the roof so it crosses the ice dam and overhangs the gutter.  This should melt small channels in the ice, allowing runoff to occur.

For more information, the University of Massachusetts has an excellent article at  http://bct.nrc.umass.edu/index.php/publications/by-title/preventing-ice-dams/. 

Other sites with information are:

http://htoyh.com  (Mr. Fix-It Home Tips)

http://diylife.com

http://thisoldhouse.com

Although we believe this information to be reliable and accurate, we cannot guarantee it.  As always, consult an experienced contractor or other expert to determine the best solution for your individual situation.

I spend a lot of my time helping our clients "stage" their homes before putting them on the market.  This involves de-cluttering, deep cleaning, re-arranging furniture, painting, removing wallpaper, removing cooking, pet and smoking odors (as much as is possible) and more.  Some clients are open to this and others simply cannot be convinced that it is necessary.

I recently went out to the home of a friend who has lost her husband in the past year and was thinking of selling her large home in Worthington and moving to a cozier one in a different part of town.  She had already had a "feng shui" lady out to the house who advised her to paint accent walls, place furniture in a certain way, move pictures, etc.  I gave her suggestions that were quite different because I was looking at her home as a saleable property that would appeal to the largest possible cross-section of buyers.

My guess is that she will take the feng shui lady's suggestions, make changes that will personalize her home, and stay in it.  But the experience illustrates an interesting point:  there is a big difference between decorating a home for yourself and staging a home to sell it to others!  When you decorate your home, you are doing it to suit your taste and personality.  You will probably bring in colors, objects and patterns that you love.  Family pictures will be evident and personal tastes and hobbies will be on display.  You will feel comfortable and "at home" in it because it will reflect you.

This is the exact opposite of what you should do to prepare your home for sale.  Your first goal should be to "de-personalize" each room, i.e. to take your personality out so that prospective buyers can imagine themselves and their own possessions in the home.  Most of the family pictures should be packed away, wall colors should be neutral, decorative objects should be pared down and furniture should be arrange to make the room appear larger.  Walls should be painted in a neutral shade, carpets should be cleaned (or replaced), windows should be washed, woodwork touched up --everything should look fresh and new.

This is not to say that your home should be sterile and unwelcoming!  Although walls and floors should be neutral, a few carefully chosen accent pieces and bright throw pillows will help to make the home appear warm and inviting.  A breakfast bar or dining table might be set with colorful placemats and dishes, a basket of soaps and some candles might be arranged beside the tub, a book might be placed beside a bed or an armchair -- all to help buyers envision themselves living in and enjoying the home themselves.

If all this sounds too much to tackle or too difficult to figure out for yourself, that's why we are here!  We have been doing this for years and can recommend lots of things that will help make your house sell as quickly as possible.  (We can also give you the names of some professional stagers who will do an even better job.)

Unless, like my friend, you decide to stay in your home and decorate it just for you!

If you are "on the fence" about whether or not to sell your home in the Worthington area, here is some information that may help you with that decision.  I am currently working with several ready, willing and able buyers who would like to live in the Worthington area.  They are looking at homes priced from $100 to $300,000.

As of today, there are only 28 homes on the market in all of the Worthington School District priced between $200 and 275,000 with at least 3 bedrooms and 2 baths....Not very many considering the community has 23,500 households!

After looking through the total inventory of Worthington School District homes, I realized that the inventory is very light.  This indicates that there is a shift in this community towards a Seller's Market, one in which the demand far exceeds the supply.  This is great news for anyone who has been considering selling their home but was nervous after hearing the reports on the housing market (on a national level).  It would seem that here, in Worthington, those reports do not apply.

Feel free to give us a call or e-mail if you would like to see what is available in the Worthington market or would like a "Market Snapshot" of your neighborhood.

Worthington Youth Boosters is a wonderful program for children who attend the Worthington school district.  My two children have been participating in programs offered by WYB for 5 years and we keep returning to the program.  My boys have learned skills and sportsmanship from volunteer parents who spare their free time to coach the children.  The program promotes positive participation from the athletes and parents alike.  WYB offers a wide range of sports including cheerleading, baseball, track, wrestling, football, basketball and more.  It is an inexpensive way for children to learn skills to build upon in middle and high schools sports.  The league also offers travel teams throughout the year for additional fees.   To find out more about this great organization you can visit the WYB website at www.worthingtonboosters.com

I was attending a meeting last night of Realtors and Mortgage people.  There were, of course, discussions of the market, who is busy and why and what is going to happen over the next few months.

The unanimous feeling was that the Real Estate market in Columbus is "heating up" in certain price points.  Homes that first time home buyers can purchase appear to be the hottest, then come the homes in the over-$275,000 price range.  The slowest market is the over-$500,000 market, but there are some great "deals" in this area.

The other point that was made by the mortgage people was that rates WILL go up!!!  They all felt that by mid-summer, rates will begin to rise and level off in the 6-6 1/2% range by the end of the year.

What does this mean for all those looking for a home?  Start now, call a Realtor and a loan specialist and take advantage of the market before it's too late!!

The numbers are in for 2010 and, once again, the LaBuda Advantage Team was #1 in the Worthington School District! 

In a tough economic year, especially in the area of real estate, we managed to sell more homes in the Worthington area than ever before --a total of 62!  Our annual "Thank you, Worthington" ad will appear in the local paper today with photos of most of the houses we have sold and, for the first time, we were unable to fit all of them on the full page!

How could this have happened in this of all years?  Part of it has to be due to the fact that Worthington continues to be a favorite of so many home-buyers.  It has a small-town, community feeling, a charming historic business district, great schools and lots of diverse neighborhoods, all the while being close-in to everything in Columbus for convenience.  The other factor in our success this year, in my opinion, is the fact that we have built a reputation in Worthington, over many years, that has served us well at a time when people are hesitant to take a risk with their largest investment -- their home. 

Of course, we also sell homes in other areas of the city.  We love Dublin, Clintonville and Westerville, not to mention Gahanna, New Albany and the Short North!  Some of our favorite properties have been in Hilliard and Upper Arlington.  Many of our buyers have settled in Powell and other parts of Southern Delaware County.  Columbus has many wonderful neighborhoods and we love to find the right neighborhood for each buyer!

Call us if you have questions about buying or selling in Worthington -- or anywhere else in the greater Columbus area.  We'll be happy to help you!

Data from the Central Ohio Multiple Listing Service (MLS)

The next quarter will be an important piece of the puzzle.  The feds are still keeping interest rates low!  You get more for your home, and it is still a great time to buy.  If you are thinking about it, now is the time to consider a move.

Don't forget the First Time Home-Buyer Tax Credit... $8,000 cash in these buyers' pockets.  Deadline to close is December 1, 2009! 

Everyone has read more articles than they think they ever wanted to read regarding the state of the real estate market.  It seemed there was never any good news.

Well, there is. 

We have sold many homes this year in under 30 days including some that went into contract within a week of listing.

What did these homes or owners do to make that happen?

What did we do to make it happen?

Us first – I attribute the large number of sales we have had this year, despite a challenging market in 2009, to our superior marketing and straight talk.

I attribute the success also to the sellers who listened to the sound advice we gave them as far as how to condition their homes “ahead” of other competitive properties.  More sparkle, more updates, more everything!

These sellers also priced their homes according to our advice.  Pricing that reflected what the market was telling us.  Their homes had to be priced based on 2009 prices and they had to be “ahead” of the competition by 3-5%.

These are the properties that are “in the market” vs. the properties that “are not in the market”.  Those that are in the market are the ones that sell.  Those that are not sit and unfortunately end up taking a lower price ultimately than they would have had they priced the homes in ahead of the market on the first day they were listed.

Making your home attractive to more buyers is the name of the game.  Waiting for a buyer is not.

Unfortunately there are people who are taking advantage of homeowners who are
facing foreclosure.  If you are not able to make mortgage payments now or feel
that it is a possibility in the future, the first call should be to your
mortgage lender/holder.  Find out if they will work with you to set up a
payment plan so that you can stay in your home.  If foreclosure is imminent or
you think you might be able to qualify for a short sale, call a Realtor that
you KNOW you can trust and talk with him or her about your options as far as
selling your property.

Call a Realtor that sells a lot of homes in your area.  Ask your neighbors who
they have worked with.  You want someone who knows your area well, has sold a
lot of homes in your area, is trustworthy (first and foremost) and has been
involved in short sales and foreclosures.

If anyone wants a fee because they will "rescue" you from foreclosure, talk to
your Realtor and/or Mortgage lender first.  Or you can call us or one of the
numbers below and we will refer you to a Realtor.

According to the "Columbus Dispatch" here are some tips to avoid a foreclosure
scam.

• Make payments only to your mortgage broker or lender/holder.
• Do not sign your deed unless you are signing over your house.
• Contact the Better Business Burea or attorney general's office to see if there
  have been prior complaints about the company you are talking with.
• Get all promises, information in writing.
• Do not give out your personal information espectially your social security number.
• Read carefully and understand what you are signing.
  
  Here are some nonprofit agencies you can call to help you should you be possibly facing
  foreclosure.  Each is approved by the U.S. Dept. of Housing and Urban Development.
• Consumer Credit Counseling Service of Columbus.  614-552-2222 or www.cccservices.com.
• Columbus Housing Partnership, Inc.  -  614-221-9990 or www.chpcolumbus.org.
• Homes on the Hill -  614-275-4663or www.hoth-cdc.org.
• Columbus Urban League - 614-257-6400 or  www.cul.org.
• Mid-Ohio Regional Planning Commission - 614-228-2663 or www.morpc.org.
• Empowering and Strengthening Ohio's People - 216-361-0718 or www.esop-cleveland.org.