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Show -- tfage 2 TV Home Magazine, THE DAILY HERALD, Friday, January "ft 1996 Tna bottom Sine: How does your ereeM rate? Establishing a credit rating has become a necessity for virtually everyone. However, there is a strong misconception about poor credit ratings. Many people feel that a bankruptcy, foreclosure, judgments or a series of delinquencies can completely eliminate their chances to obtain any type of loan, not to mention a home mortgage loan. This is not true. It is a fact that a large number of people fall into a bad credit rating, either through a misuse of lines of credit, mismanagement of credit accounts, or perhaps a sudden loss of income or injury has created an unexpected inability to pay. If the credit delinquencies on your report are legitimate, there may not be much you can do to erase what has already occurred unless, of course, you were to physically go back in time to undo what has already been done ... and everyone knows how dangerous that can be. In fact, it would be hard enough to get one of those built by an odd- ball neighbor (who, just by chance, is actually a scientific genius of "Einsteinian" caliber), let alone get the timing right for a bolt of lightening with the necesit sary six point three will take to bring you back. And let's not even get into the problems that would occur if you were to actually meet yourself while back in time. Depending on which Hollywood movie you base your facts on, it could turn grue jig-a-wa- some and should always be avoided whenever possible. Besides, there may be an easier way. First of all, many people with poor credit may still qualify for a standard conventional, FHA or VA loan. Here are a few facts about credit reports and mortgage loans: Any delinquency, including Financing A Home and collection remain on your will accounts, credit report for seven years. paid judgments A bankruptcy is rated on the report for seven years, but mention is made on the report for up to 10 years. Most conventional loans, as well as FHA and VA loans, require a good credit rating for a minimum of two years. A good rating consists of no mortgage lates in the past 12 months, no unpaid collections or judgments, and less than three additional lates recorded. Since no two credit reports are alike, it is difficult to outline exactly what could be approved on a conventional loan program. A borrower is often approved even with several late payments if there are other strong compensating factors, such as good job history, assets or a higher down payment or equity in the home, A borrower with a bankruptcy can still qualify for a conventional loan as long. as it has been at least two years since the discharge. A chapter 7 bankruptcy is when all debts listed in the papers are completely wiped out, and is usually discharged within a few months of filing. A chapter 1 3 bankruptcy is when the debts are restructured for a time, and monthly payments are made. Once all debts have been paid, or the allotted time has expired, the debts are then released and the bankruptcy is considered discharged. Oddly enough, a borrower who has filed a chapter 13, and repaid much of his debt, usually ends up having to wait longer to qualify for a mortgage loan than with a. chapter 7, since the two-yetime period does not begin until after discharge. Some FHA loans allow for less time after discharge on a chapter 13, as long as a solid track record of repayment has been established. After bankruptcy, a borrower must then establish credit, and make all payments on time for the two- - year period. A foreclosure usually requires at least three years of clean credit. If you make your payment late, or after the grace period allowed for you to repay a credit card or installment loan, this will not necessary be reported to the ar credit bureau. The credit report will only show those that are at least 30 days late. Contrary to what many consumers are told, it is possible to have late payments removed from your report, even if they are legitimate. This may take several phone calls to the creditor, but many are willing to restate their ratings if they feel a customer has had an overall clean track record, or agrees to get caught up on their payments (in general, the nicer you are to them on the phone, the more willing they may be to work with you on the rating). Once a creditor agrees to remove the late report, it is best to call your local credit reporting agency, order a new report, and give them the name and phone number of the creditor to verbally confirm the removal of the late. This way, the removed. late is immediately Otherwise, it would not take place until the next reporting cycle, up to 60 days later. By then, it would be more difficult to start over again if the report was not cleared. If you do not qualify for a standard conventional, FHA or VA loan, there are still many choices before you. Other portfolio loans are classified into credit ratings of B, C or D (also referred to as "hard money loans"). There are even loan programs that might be able to handle the worst of credit ratings, with the necessary compensating factors. One loan I closed was for a borrower that currently had about a dozen collections amounting to over $35,000, and their home was in Joys of real estate job include meeting people I'll call her Blanch. One of the real joys of the real estate business for me has been the people I meet, and Blanch reinforced that feeling as I sat across the table in her kitchen talking about her needs. Blanch's husband had died about a year before, and her large house and yard were beginning to lose the joy they had represented for years because of the time and care they took. Blanch couldn't stand to see her many trees become and her voice trembled a little as she told me how there had never once been a wormy apple until this last year. Blanch had called me that morning to ask about selling her house and buying a condo. As we reviewed her home to determine insect-infeste- market value, I was my most thoughtful. I really cared how she lived the rest of her life, and I knew there were condos and there were condos. Her needs were pretty simple security, reasonable comfort, and sufficient but not excessive room. She wanted just enough to be comfortable without having to devote hours to cleaning and mainte- - d, couldn't help thinking about the different needs we face in providing comfort and shelter for ourselves through the different periods of our lives. After years of raising a family and serving five missions with her husband for her church, Blanch faced a decision she had not anticipated how best to be free from the care and maintenance of a large home so she could tackle the things in life that were really important to her church, her family and her her personal growth. My research for Blanch was not my first venture into condos, but it John Focus on Real Estate nance. The condominium I found for her offered, for the price of a modest house, a lovely one-flounit with family room, two bedrooms and a two-cgarage. It also had a private courtyard, and the buildings did not share walls with each other, so they were very quiet and private. These were not just fancy apartments. or ar As with most condos, a fee was charged for the centralized facilities, but it included her water, sewer, and garbage. All lawn and gardening maintenance were taken care of and there was lots of and beds as were flower grass snow removal in winter and outside paint and building maintenance year round. All in all it was a far cry from hours of mowing, pruning and spraying required by her more conventional home. And not unimportantly these 'homes' were designed for 'over 55'. Blanch would be among her peers something that was very important to her. It was perfect, and it was priced in the $100,000 area very affordable. The week before I happened to sell another condo to a young couple. With one child and a modest income, they were looking for two a chance to build equity things and some place they could call their own. Their selection was a modest two story, two bedroom not new, but neat and for less than $70,000. When we worked out the cost after tax deductions," it turned out that monthly payments would be almost the same as apartment rent. The difference? In a few years when they were ready to buy a larger home, they would have a sizeable down payment with the equity they were building. Now I'm looking for a third condominium this time for a University professor and his wife. As retirement approaches their plans call for travel and extended stays away from home. Their current large six bedroom house is beginning to become a liability something they can't walk away from without complicated arrangements to have it cared for. The unit they are looking for will cost close to $250,000 and will be very com-- , fortable, but they'll be able to leave it without a worry in the world when circumstances dictate. When home, they will enjoy a comfort level uninterrupted by the needs of caring that the current home calls for, and the thing they most want now freedom will be theirs. I could go on with reasons to explore this alternative to conventional housing investment, children starting school, a mission all sorts of questions for which the answer is condominium. For Blanch the question had been 'How do I cope'? A condo was the clear answer, and this afternoon as I prepared my report for her, I was glad we had met. It felt good to help solve a problem for a newfound friend. John Hanson is a Realtor with Century 21 All Pros Realty in American Fork. Questions or comment are encouraged by calling or by at: 756-359- 1, foreclosure. The application for home refinance loan was complete two weeks before the home was t be auctioned. The morning of thi! auction, the new loan was closed t which brought the home out of fore closure and provided enough extr;i to pay off all of the collections. The new loan was on a variabl rate of about 14 percent, but the bor rowers monthly payments on thd mortgage were lower than the pay ments on the other debts, and more importantly, he saved his home. All hard money loans are "loan' to value driven," meaning that the more equity you have in you home, the belter program you will get, and less importance will be put on your credit, job or other assets. ine idea Denma nara money loans is that they are generally snort-teror a oanaage loans loan designed to help you save your home, resolve your credit, and perhaps pay off your other debt. Once this is accomplished, you can refinance out of this loan and back to a conventional loan in as little as one year of clean credit. Since these loans are amortized for up to 30 years, your monthly payment will decrease overall if you are consolidating debt. For example, a car loan of $20,000 and credit card debt of $15,000 might total about $900 per month, even if their interest rates are low. That same $35,000 consolidated into a home loan might require a monthly payment of $375 even if the rate is 1 1 percent or higher. A year of easier monthly payments might be just what it takes for a borrow er to regroup and get back on their teet. Mark Greer is one of the owners of Atherlon Mortgage, loan questions or column suggestions are welcome at his office iij Jamestown Square, Prow, or by calling 373-633m 4. (DjrCDrttfyRcrrtli) 1555 North Freedom Boulevard P.O. 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