Depending on your credit score and your buying habits, you might receive a few or a lot of pre-approved offers in the mail. But there is something else that determines whether or not you get them.
Pre-approved doesn’t necessarily mean that you will get credit or that you will get the terms mentioned in the offer. All it means is that you are in the category of people who fit the marketing strategy of the company offering credit.
Here’s how it works.
You fit the profile of the marketing list that is sold by the credit bureaus to someone looking for more customers. Maybe your credit score is in the range they specified. Maybe your income fits what they have deemed their ideal customer. You might have a certain amount and type of debt they think makes you a good customer for them.
Or maybe you just had your credit pulled for some kind of purchase. When you apply for credit, there is a much larger chance that your information will be sold to other creditors who offer the same type of credit.
I just had it happen to one of my clients today. He applied for a mortgage and I had his credit pulled. Within a day, he got a phone call from a guy who said, “We pulled your credit.” This was a lie since I was the only one who had pulled it but the guy had a shocking amount of information about my client, including his phone number and email address.
The guy was really smooth and almost had my client applying for the same loan I am doing for him because he thought he was talking to someone in my office. When he realized they guy wasn’t working for me, he ended the call but had already given him a fair amount of personal information.
If it sounds invasive and covert, that’s because it is.
The point is that your personal information is being sold to as many people as the credit bureaus can sell it to. Even though they can’t sell your social security number, they can sell most everything else and the rest of it can probably be found on your social media sites (mother’s maiden name, birth date, first car, etc.).
So now that they have enough information about you to sound logical, they can call you or send you offers in the mail, some of which look like they are from your current creditors if you don’t look too closely. They know your credit card balances, your mortgage company, approximate credit score and plenty of other information.
Then they send you offers. The offers always sound great because they assume you will qualify for the best terms they offer. I wonder what percentage of the people who respond to the offers actually get those ideal terms. My guess is that it’s pretty low.
If you don’t qualify for their best terms, you may get a decent offer anyway. Maybe you will get a lousy offer. Or maybe you will just get an extra ding on your credit because you allowed them to pull it before they said no.
The bottom line is that pre-approved offers can be okay but it isn’t really that hard to locate the type of lenders you need so wouldn’t it be better to just locate them yourself? That way, you are in control of who you talk to and you know who you are calling instead of wondering if you are being scammed by a cold caller offering you money.
Fortunately, there is a way to stop the pre-approved offers if you don’t need extra paper for starting fires in the winter. And it’s really easy to do.
All you have to do is go to https://www.optoutprescreen.com/ and you can either opt out for 5 years or permanently. Opting out for 5 years can be done online. If you want to opt out permanently, there is a form to fill out and mail in. The website and ability to opt out are mandated by the Fair Credit Reporting Act.
If you ever decide you want to receive pre-approved offers again, whether it is because you’re lonely without all that mail, need a stranger to talk to on the phone or just because you need more offers to make sure creditors are still interested, you can always opt back in.
When you opt out for 5 years, there is a really easy way to keep track of when it is time to renew. It is when you start receiving offers again. My 5 years is up and so is my volume of mail. I guess it’s time to go back in and turn off the junk mail faucet.
Last week I announced that non-prime loans are back and in this post I want to give more information about one the loan types that fit into this area: bank statement loans.
This loan type is specifically for business owners and independent contractors.
It was designed to help in those situations where there is enough income but where income taxes won’t work because there are too many write-offs, resulting in a low net income on your income taxes.
Using bank statements to prove income can make it possible to buy a home or refinance one even though banks can’t help you.
These loans can be done with business bank statements or personal bank statements. This can be very helpful for those who don’t have separate bank accounts for their business and personal money.
This program can even be done if you have a regular job and a side business. In that case, we would get pay stubs to show income from your job and bank statements to show income from your business.
It wasn’t too long ago that I did one where the borrower had a regular job and a had a side job as an independent contractor. In that case, his taxes hadn’t been filed yet so the only way to get him approved was by using the bank statement program. It worked beautifully and I was able to get him about $200,000 in cash out of his property and still reduce his monthly payment.
And in case you were wondering, these loans have rates fixed for 30 years and for owner-occupied homes, there are no prepay penalties.
At the moment, the minimum credit score for this program is 640. If you need help getting your score up to that, give us a call and we can coach you on what to do to increase your score.
For more details and to see if this program could work for you, call us or fill out the contact form on the Contact page of this website and we can go over your situation to find what solutions are available.
You may remember a couple of months ago when I told you that many of the loan programs that had been available didn’t exist anymore. Whether you remember or not, I have some good news!
Some lenders who stopped doing loans a couple of months ago have come back into the market and started lending again. The programs have changed a little but they are not too different from what was available before.
Of course, some of the more aggressive aspects of their loan programs do not exist today and that is probably a good thing because some of them made those loans a bit too risky. I am all-in to help people who should be able to qualify for a loan but can’t get help from banks. But making risky loans caused some problems around 2008 and we don’t want a repeat of that.
Back to my announcement that non-prime loans are back.
When non-prime lenders left the market and stopped lending, a huge void was created between bank loans and hard money loans. For those who could normally qualify for something in the middle, they either had to pay the higher rates of hard money or they had no options at all.
The huge void that was created when those lenders left is no longer empty. Having these types of loans may not seem like a big deal but for those who can qualify for them, it can make a huge difference in what they can afford, whether it is for a home they are going to live in or an investment property.
In case you aren’t fully familiar with non-prime lending, it is the type of mortgage that exists to help people who fall in between bank lending and hard money. Simply stated, the qualifying guidelines and rates are easier than bank loans and the rates are better than hard money.
They are similar to the old subprime loans but without the major faults of those old programs, like having a 2-year fixed rate and a 2-year prepay penalty.
There are a lot of details that would probably bore you to tears so rather than give you all of them, I will just list some of the highlights:
- All loans have fixed rates for 30 years
- Rental properties can use rental income to qualify
- Bank Statements can be used to prove income
- No prepay penalties on owner occupied properties
Since there are many other details, if you want to know if this type of loan can help you, call us or go to the contact page of our website and submit a contact form.
The purpose of this post is to explain how to avoid a property tax sale for those who find themselves getting behind on their property taxes. There is no doubt that it can be a scary situation but there are solutions.
In California, a property can be sold at auction after property taxes have remained unpaid for 5 years. Depending on whether you are looking to save a property from a tax sale or buy one at a tax sale, this could be good or bad.
For those who have fallen behind on property taxes, it is important to know what to do to avoid losing your property. Knowing the 5-year rule gives you the timeline for when it could happen. If you are two or three years behind, you still have some time but if you have reached the 4-year mark, it’s time to do something now before it’s too late.
Some county tax collectors will let you make a payment arrangement to get caught up on your taxes but if you are too far behind, they may not agree to do so.
Another solution is to get a mortgage on the property to get the taxes caught up. In many cases, the new lender will want to have property taxes collected with your mortgage payment to prevent the same situation from happening again.
Delinquent property taxes don’t go on your credit report so they won’t hurt your credit score. This makes it possible to get a regular bank loan if everything else fits their guidelines. But if you can’t get a bank loan, hard money can be used to solve the problem if there is enough equity in the property.
Fortunately, hard money can be a fast solution to this. I have done multiple loans in the past to help homeowner’s save their property from tax sales. The first one I ever did closed in 4 days, closing on the final day before the auction. It was a close call because the client waited until the last possible moment to try to get a loan.
Yesterday, I got a call from a loan officer who has a client who inherited some properties and didn’t realize that because it wasn’t from a parent, the property taxes had increased after each property was reassessed. The client kept paying the old amount which is thousands of dollars less per year and is now in danger of having their these properties sold at auction to pay the delinquent property taxes.
To make matters worse, the properties this client owns are free and clear (meaning they have no loans on them). Yikes! That could be a disaster!
The loan officer who called me can now help their client save the properties with hard money loans as a temporary solution until a more long-term solution can be found. This will avoid the loss of hundreds of thousands of dollars.
For more information on how to get a hard money loan, regardless of the reason it is needed, fill out the contact form no this website or call today.