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Archive for May, 2013

What Happens When The Appraisal is Less Than The Purchase Price

Home AppraisalAn appraisal is a documented analysis of the value estimation for the home.  A licensed appraiser will by assigned by the lender to prepare the home appraisal report.  It recognizes fair market value based on the recent sales in the neighborhood, and is required for a mortgage loan approval to ensure the value of the property.  Homes sold in the last 90 days will provide the greatest weight in the sales comparison approach.

So what happens when the appraisal is less than the purchase price agreed upon?

If your home appraises for an amount that is lower than your purchase price there are 3 options

  1. Negotiate a new purchase price that take into account the appraised value
  2. Buyer increase their downpayment to cover the difference
  3. Buyer may choose to cancel home purchase contract through the appraisal contingency

Appraisal contingencies are also exercised to exit or renegotiate contracts when an appraiser identifies repairs that are required to complete the appraisal.

 

Posted in: For Sellers

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How Are Credit-Score Points Earned?

FICO ScoresHow Are Credit-Score Points Earned?

The official FICO scoring model runs from 300 to 850 points.  But your score will very based on the type of credit you are applying for.  There are differing score-models for each type of inquiry:

(in order of risk preference)

  1. Credit request for a mortgage – BEST
  2. Credit request for a car loan
  3. Credit request for a credit card account
  4. Credit request for a store credit card or consumer loan – Worst

Mortgage and Auto Loans are considered more positive because the debt they create will reduce as monthly payments are applied.

Credit requests for credit card loans usually hit the scores the hardest.  This is because the debt balance is expected to go up every month until there is enough account history to show otherwise.

Once a negative condition hits your credit report, the damage is done. Paying a collection account will not regain the points you have lost.

Credit Score Breakdown

65% is tied to 2 things

  1. Payment History
  2. Credit Utilization
  • The amount of money you are borrowing and whether you are paying your creditors back is the primary source of high credit scores

15% is tied to the amount of time you’ve had credit in your name

  • The more time you have spent managing good credit the higher your score will be
  • First time borrowers bring an added layer of risk

10% is scored on the type of credit used

  • Auto loans and mortgage loans are scored as a positive.
  • Credit Cards are negative.
  • Pay Day loans almost ensure credit score deficiency.

10% is scored on a category deemed “new credit”

  • This is an assessment of the most recently opened accounts and the types of credit that have been applied for.
  • It also scores on how long it has been since you opened an account.
  • At the maximum this category is worth 85 points to your FICO.

A mortgage credit inquiry will lower your credit score by 5 points.  You can have as many mortgage credit score inquiries as you want for 14 days and you will only receive one reduction for 5 points.

Posted in: Condos, Credit, First Time Home Buyers, For Buyers, Household Finances

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How much do credit scores drop with a mortgage late payment?

FICOIn the last few years Trans Union, Experian and Equifax have disclosed more specific information about the damage to credit scores after mortgage late payments.  Here are some examples for a FICO credit score:

30 day late payment – damage to credit score

780 score drops to around a 670-690
720 score drops to around a 630-650

90 day late payment – damage to credit score

780 score drops to around a 650-670
720 score drops to around a 610-630

Foreclosure – damage to credit score

780 score could drop to 620-640.
720 score could drop to 570-590.

How much do credit scores drop with a mortgage late payment?

Notice how much risk is attached to a consumer with a recent 90 day late payment;  even with a start point of a 780 credit score, a 90 day late payment is not much different in impact than a foreclosure!

Posted in: Credit

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Tulsa County Tax Sale

Tulsa County Tax Sale

Tips for Buying at the Tulsa County Tax Sale

The biggest Tulsa, OK, real estate event of 2013 could very well be the Tulsa County Tax Sale the second Monday of June.  The June resale auction is pursuant to Oklahoma Statute Title 68, Section 3135 and is referred to as The Commissioner’s sale. This year there are currently 1264 properties scheduled to go up for auction in the Tulsa County Tax Commissioner’s Sale.

This represents exciting opportunity, but there can be some pitfalls if diligent research is not completed. Properties in some instances have valid Federal, State or City liens which would have to be settled separately from the purchase auction.

Here are a few tips:

  1. Register – Tulsa County Treasurer’s Office at the Courthouse (500 S. Denver, 3rd Floor)
  2. Have your money ready
  3. Learn the guidelines for purchasing county properties
  4. Get a list from the Tulsa County Treasurer’s office.  There is a list on their website, but it is insufficient and out of date
  5. Go see the property
  6. Carefully review the Tulsa County bid form
  7. Contact the Delinquent Tax Department at 918-596-5070 with questions, or check here for answers

Tulsa County Tax Sale by Zip Code

  • 74106 – 238 properties to be sold
  • 74126 – 186 properties to be sold
  • 74110 – 155 properties to be sold
  • 74115 – 101 properties to be sold
  • 74115 – 101 properties to be sold
  • 74063 – 66 properties to be sold
  • 74127 – 49 properties to be sold
  • 74112 – 46 properties to be sold
  • 74107 – 41 properties to be sold

Tulsa County Tax Sale by Building Type

  • 743 Residential Houses
  • 58 Commercial Properties
  • 34 Residential Duplexes
  • 23 Residential Condos
  • 5 Mobile Homes
  • 3 Out Buildings
  • 3 Multi-Unit Properties

Tulsa County Tax Sale Opportunities – Highest Values

  • 8321 E. 61st Street – $8,881,600
  • 7625 E. 21st Street – $2,274,400
  • 8338 E. 61st Street – $2,270,700
  • 311 E. 2nd Street – $954,000
  • 6209 E. 110th St. – $735,000

 

Posted in: For Buyers

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