Happy New Year!

Thanks for visiting our blog and website in 2008… we look forward to helping you with all of your real estate and mortgage related questions in 2009!

Credit Card Companies Closing Accounts

Have you had a credit card company notify you they were cancelling or closing an account you had with them?

Many card issuers are doing just that. Credit-card companies lose money on dormant accounts, and as they feel the economic pinch, they’re more apt to close them. Unfortunately, closing a credit card account can lower your credit score. The length of time your accounts have been open is the third most heavily weighed factor in your FICO score (after timeliness of payments and the amount you owe). Plus, eliminating a card reduces your available credit, which could also lower your score.

Some card companies will consider reopening inactive accounts, especially if the account was recently closed and the customer had been with the bank for a long time.

Tip: If you have a lot of other cards and a credit score of 720 or higher, one closure won’t have much effect on your score. But if you have a slim credit history and few cards, it’s wise to make sure your oldest accounts stay active. So use your card at least once every three or four months. Then be sure to pay it off every month so you’re not racking up big interest charges.

What about you? Have you had a card canceled by your credit card company? Tell us about it. Were you able to get them to change their tune? Use the comment link below to sound off. Your email address will NOT be revealed when your comment is published here.

Real Estate Auctions: Be Careful

When you go to an auction and THINK you're bidding on a property, remember one VERY IMPORTANT thing: The highest bid doesn't necessarily mean you've won…Stacy Johnson explains in this video (runs 1:18)

Have you had a situation like this? Bid on a home or property at an auction and think you'd won the bid, only to find out later, you don't get the property? We'd love to hear your experience. Just use the comment link below and tell us about your auction experiences with real estate. Your email address will NEVER be published at this site.

How the Fed Rate Affects Mortgage Rates

Fixed-rate mortgage rates, though not directly tied to the Fed Funds Rate, have been responding positively to market rate cuts over the past few months.

Just as an overview, the Fed Funds Rate has a strong (if not direct) affect on the following:

• credit card rates
• adjustable-rate mortgages
• interest on savings accounts
• Prime Rate (home equity lines are based on this)

If you're considering refinancing or purchasing a home, now is the time. With rates at these levels, you'll enjoy more house or mortgage for the same payment. Just lowering your rate 1% on a typical $200,000 mortgage can save you about $125 a month or $45,360 for the life of your loan.

And don't forget, housing prices are the lowest they've been in generations. The opportunity to purchase a home with a low price and low rate is unprecedented. Real estate investors who do their homework and invest wisely can also get deals they couldn't have even dreamed about just a few years ago.

Thanks to the Fed Funds Rate dropping to the lowest level in history, mortgage rates have also dropped.

Waiting may be one of the costliest decisions you've ever made!

Appraisals: Who's to Blame for Low Estimates? Who exactly IS at fault when an appraisal comes to a less-than-desirable valuation? And what IS a home appraisal based on?

Appraisals are typically handled through a title company and appraisers are often selected from a network of appraisers with which the title company is affiliated. They’re an unaffiliated third party. Often times, there’s confusion because the homeowner is informed about the cost of the appraisal by the mortgage company/banker, when actually there is no mutually beneficial relationship.

So if an appraiser sets a value on your home that comes in too low to move forward with the home loan, the mortgage company nor the mortgage banker can benefit in any way.

So Who's to blame? Unfortunately there’s no real person to yell at. The current nationwide trend of decreasing home values is to blame. Right now, home values in some locations are appraising at 40% under the price at which they initially sold.

Have you had an appraisal done on a property you own that you thought was extremely low or off-base? Sound off. Tell us about your experience by using the comment link below. Your email address will never be shared on this site to protect your privacy.