FHFA implements lenient employment verification, appraisal requirements

To help homebuyers amid the COVID-19 (Coronavirus) crisis, the Federal Housing Finance Agency (FHFA) has directed Freddie Mac and Fannie Mae to offer more lenient employment verification and appraisal requirements.

The directive, which currently stands through May 17, will help homes to be refinanced, sold and purchased as the nation manages the situation.

What this means is that lenders can obtain employment verification via e-mail from an employer, a bank stub that proves a deposit from payroll, or a recent paystub. Additionally, lenders can “leverage appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.”

As an additional attempt to alleviate some of the stress put on the market, evictions and foreclosures also have been suspended for a minimum of 60 days, and forbearance is being offered to those facing financial hardship.

For more information, click here.

If you live in the Boise/Twin Falls area and have any questions related your home loan, make sure you contact us today. We would be happy to discuss your unique financial picture and try to help in any way we can.

How Boise/Twin Falls can help those in need during the Coronavirus crisis

The Boise/Twin Falls community is resilient and supportive. That is why people across the region are coming together to help those in need as a result of the COVID-19 (Coronavirus) crisis.

The Idaho Foodbank distributes food for more than 400 organizations across the state of Idaho. This includes soup kitchens, senior centers, food pantries and schools. With the current pressure being put on the food supply chain nationwide, the Foodbank expects demand to continue to increase.

This means a lot of people, from the elderly to those who are coming across financial hardships, are going to need help accessing food. The increase in need could be between 30 and 50 percent, according to the Idaho Press.

The Foodbank is calling on anyone who can donate food or money to please do so. A donation of $1 can provide as many as five meals to someone who is in need, according to KTVB7. Additionally, the Foodbank is calling on people to hold food drives of their own for their local food pantry if they can, or on an even larger scale.

If you would like to volunteer your time and are healthy, there is need for that as well. This is because many of the Foodbank’s volunteers are older and they can’t put themselves at risk of catching Coronavirus. This is forcing much of the volunteers to instead stay at home. The Foodbank is taking steps to ensure the safety of volunteers by keeping teams small and practicing social distancing.

We know the Boise/Twin Falls community and whole state of Idaho will come together and get through this trying time. We encourage you to help the Idaho Foodbank if you can by volunteering or through a donation.

If you would like to help, make sure you visit the Foodbank’s website.

What makes up your credit score

The way your credit score is calculated, and how it’s improved, shouldn’t feel like a mystery.

Conflicting information or confusion over certain topics, however, can leave some consumers in the dark.

If you are hoping to whip your credit into shape to meet your financial goals, such as buying a home, here are some truths about how your credit score works.

First, it’s important to know that two major scoring companies, FICO and VantageScore, may take different approaches, but they are on the same page on two major factors that determine credit scores.

Payment history
Because past performance is a strong indicator of future behavior, these major credit assessors pay close attention to a borrower’s payment history.

This factor accounts for 35 percent of your credit score.

Since this portion of the credit report is so influential, it’s important for credit users to make payments on time, every time.

Even being 30 days or more late can put a serious dent in your score. Unfortunately, the damage only increases when payments are further delayed.

Autopay arrangements and calendar reminders are a great way to never let the excuse of forgetting to be a reason for not paying on time.

Credit Utilization
Credit utilization is simply the amount of credit you use out of what’s been made available.

This ratio accounts for 30 percent of your score, and the lower the credit utilization use is, the better.

Financial advisers say it’s best to use no more than 30 percent of your available credit.

Setting alerts to learn about your balance or making an extra monthly payment are great ways to keep your credit utilization in check.

Unlike late payments, catching up and improving your credit utilization is not difficult. Once you pay down high balances, the damage of a high credit utilization is removed.

Other factors
Now that you have a firm understanding of the most influential factors that make up your credit score, it’s important to learn about others that also have an impact.

The age of your credit is important, so it’s a good idea to keep older accounts open, especially if they do not carry an annual fee. You may even consider being an authorized user of an older account if it comes with a good record.

A variety of credit is also helpful. Installment accounts that have consistent amounts due (think car payment) and revolving accounts that vary in amount due each month, are the types of lines of credit you should carry.

Total balance and debt also factor in. Your goal then must be to make incremental monthly steps to pay off your debt, not add to it.

Hard inquiries, which require your consent, affect your score whereas soft inquiries will not move the needle on your credit monitor.

Also keep in mind that the use of free apps that inform you of your score will not impact you, neither will rent and utility payments.

Your credit-building goals are possible by always remembering to pay on time and by keeping balances low. Once that’s your driving philosophy, all the other credit details may fall in place, potentially putting you in a much better spot to reach your financial goals.

The difference between a pre-approval and a pre-qualification

The mortgage process is an exciting time as it represents a step toward the major accomplishment of homeownership.

At the same time, it can be complex and lengthy since it’s one of the biggest financial commitments you can make. With the stakes being so high, it’s important for consumers to be aware of the distinctions between a preapproval and a prequalification.

It goes without saying that those applicants who are already equipped with a preapproval or prequalification are better positioned to be more competitive in today’s real estate market.

But, which one is ideal for you?

Mortgage lenders issue a prequalification as an option to gauge the credit worthiness of their clients. It is by no means an ironclad commitment from the lender that it will loan the money. It is, however, a good indication that the applicant could be approved for a mortgage.

The prequalification is less formal than a preapproval and provides merely an estimate of how much home an applicant may be approved for. This is based on income and budget.

A preapproval is a much more comprehensive approach to test the credit worthiness of a buyer.

When a person is preapproved for a mortgage loan, it means that the lender has carefully reviewed all the pertinent financial records that are needed to make a decision.

Upon being preapproved, the borrower has a good idea on a specific mortgage loan amount. Other details, such as the projected mortgage payment, will be included as a result of a preapproval.

This process is a bit more involved, requiring borrowers to submit extensive documentation.

The great news is that a preapproval carries a lot of weight because it shows that the buyer is ready to make an offer on a property.

Both a prequalification and preapproval are key steps in learning more about a mortgage and being approved for one.

If you’re thinking about purchasing a home in the Twin Falls area, please contact our office to learn more about this program and what you’ll need to get preapproved. We’ll work with you at every step of the way and ensure that you enter the market with the utmost confidence in yourself and what you can accomplish.