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Are You Making Costly Credit Mistakes? – Part Two

Loose Change

Prompt Payment

Your payment history accounts for 35% of your credit score. This is why it always best to pay at least the minimum amount due. If you don’t pay the minimum it will result in the account being flagged as past due. Being past due on an account can lower your credit score by 50 or more points. Similarly a 30-day late payment can lower your credit score by 50 or more points.

Banks are required to mail your notice at least 21 days before it is due. To avoid tardiness make your payment immediately online. Most bank accounts have automatic bill payments systems or payment reminders. Bill pay can be set up to automatically deduct your minimum payment or your account balance from your personal bank account each month. Paying off your credit card will on time will save you money and raise your credit score in the long term.

How Manage Your Debt 

Debt shouldn’t be consolidated; instead have it evenly distributed over all credit card accounts.

To maintain a good credit score, keep balances as low as possible. Aim to be below 50% of your total credit limit at all times. Three to six months prior to applying for a home loan balances need to be kept at 29% or less of your total credit utilization.

Ideally utilization for cards is 5% to 9% of the available limit. Going over your credit card limit, even by $1, will cause a serious penalty.


Click here to read Part One

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Are You Making Costly Credit Mistakes? – Part One

Credit scores are 3-digit numbers used by lenders to evaluate the risk associated with lending money. They have a huge impact on your ability to get loans. Confusion or carelessness can result in higher interest rates, lower credit limits, unwanted fees or major hits to your credit score.
Credit Score Factors

Maintain Your Balance

Whether it is a car loan or a credit card purchase, new debt will temporarily decrease your credit score. On the other hand, balancing your debt load will positively impact your score.

Amounts owed account for 30% of your credit score. The more debt you are carrying the higher risk you appear to creditors. A maxed out credit card could cost you between 10 and 45 points and will lead to higher interest rates.

Many people falsely believe that old credit cards should be cancelled. Credit card accounts shouldn’t be closed except in special circumstances. Borrowers should hold onto old credit cards, even if the rate is not great. Closing an account wipes out all the past history that could be beneficial in maintaining the best scores.

Do not open a lot of credit cards at once. Instead maintain your balance by only applying for and opening new credit accounts when needed. Avoid applying for store credit cards for a temporary discount.These cards tend to have high interest rates and usually won’t help your credit score in the long run.

Click here to read Part Two

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What’s Ahead: 2014 Real Estate Market

What happened in 2013 with the real estate market? What will happen in 2014? We’ve got the answers.

Increase in Prices and Sales
In 2013, home prices rose faster than they have since the housing boom. Nationwide sales were on pace to reach 435,100 new homes sold in 2013, the most since 2008.  Annual nationwide existing home sales were up with approximately 5.1 million, the highest total in seven years and 10% higher than 2012’s total of almost 4.7 million.

Financial / Banking
Nationwide bank failures dropped again dramatically to just 24 in 2013, down from peak of 157 in 2010. Refinance activity also dropped dramatically as interest rates rose. Delinquencies and foreclosures continued to fall. In addition more than 3 million homeowners returned to positive equity in 2013. Government began easing back on its bond buying and stated that its continuance will be data dependent, which could result in high mortgage rates in 2014.

Washtenaw County Improvements
Average sale prices of $249,294 – up 18% over 2012 and up 37% over the recent low in 2009. The average days on the market was 47, which is down from 69 in 2012. Countywide 43% of homes sold at or above their asking price – up from 33% in 2012.

What’s ahead in 2014?

  • New Federal Reserve Chairwoman Janet Yellen and Vice Chairman Stanley Fischer are excellent replacements and are likely to be dovish.
  • Tapering continues and is scheduled to end by 01/01/2015
  • Short-term rates remain at zero until 01/010/15 or as long as unemployment is “elevated” and inflation is “low”. Thus, low but rising interest rates with end of year 30-ryear rates at 5% to 5.25%
  • Trillions in household net  worth recovering and now at a new  record level means more income to spend elsewhere
  • Consumer confidence, while historically low, is up
  • No recession is in the card- Leading Economic Indicators for the USA at the highest level since Great Recession
  • Household formation for first-time home buyer in the 25-34 age group is rising
  • Residential housing permits are expected to continue their climb
  • FHA lowered state-wide maximum loan limit to $271,050.

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The New Year is Here

What will you do this year to increase your business and improve your life? January is the time to re-focus on your business and make the changes needed. Here are a few easy ways to make this your best year ever.

Plan and Track Your Strategy
Spend time every day planning your strategy to keep you on track. Implement a way to measure your goal. This will ensure you are meeting your goals and following through with your plans.

Identify Your Target Market
Choose your comfort zone in the market and be the expert in that area. Finding your niche will help you focus your market plan.

Break Free from Your Comfort Zone
Do one marketing strategy outside your comfort zone. This is the only way you will grow.

Start a New Hobby
Find something that you like and do it. Doing something you enjoy will give you the opportunity to create relationships with new people. New friends are a great way to continue to grow your personal network.

Get Moving
Join a gym, a workout group, or take a class. Spending just a few hours a week on yourself will improve your outlook. You’ll feel better and be more confident, which makes meeting new people easier. You never know where your next customer will come from.

Keep a Positive Outlook
Happy people are much more desirable to do business with. Happiness spread so if you are happy it is more likely your customers and co-workers will be.

Stop Making Excuses
If you don’t make the phone call, you won’t get the business. Don’t let fear stop you from moving forward. You have nothing to lose. Make the call!

Best of luck to all of you for a happy, healthy, and prosperous year.

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Top 13 Things to Watch for in 2013 – Part Three

What will this year bring? What’s happening now and what does it mean? We’ve got the answers you need—all wrapped up into 13 predictions about topics that will matter in 2013!

10. Housing prices on the rise—The average house price has returned to normal, when compared to long-term numbers. That means housing prices have bottomed out and are even starting to rise in many areas. There are still dips in different seasons or different markets, but the overall trend is improving—and should continue to improve in 2013.

11. Home inventories falling—The number of new homes sitting on the market has come down dramatically. In addition, fewer homes have been coming on the market. The number of existing homes on the market has also dropped dramatically. The bottom line is that the flood of homes on the market has been cleaned up over the last couple of years, and the market is in a much more stable position.

12. Housing starts and sales are up—The good news in home inventories clears the way for new homes to be built again. That’s good news for the labor market and for people ready to move into a new home. And we can see those elements playing out in the improvements in the number of home sales. This trend should continue in the coming months; however, different markets will experience different levels of improvements. That said, there are still a number of people who are working on improving their credit scores or saving up for a down payment. Those people may continue renting in 2013, but may be positioned to enter homeownership in 2014.

13. Lending loosening up—Lending peaked in 2008 and then dropped dramatically as lending restrictions tightened. In recent months, however, lending has begun to loosen…and should loosen slightly more in the coming year as balance sheets are cleaned up, more people have down payments saved, and more people enter the labor force. It’ll be a slow process, but it’s heading in the right direction.

The bottom line is that the U.S. has been slowing but steadily climbing out of the recession. This looks to be the year when the recovery final takes hold in such a way that more Americans will begin to feel it.

That’s good news for the economy, for consumers, and for the housing market in 2013.

> Click here to read part one.

> Click here to read part two.

Source: Mortgage Success Source, LLC

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Top 13 Things to Watch for in 2013 – Part Two

What will this year bring? What’s happening now and what does it mean? We’ve got the answers you need—all wrapped up into 13 predictions about topics that will matter in 2013!

5. Labor market slowly healing—There are a lot of demographics and statistics that look good for employment in the coming year. That doesn’t mean we’ll see a huge growth in jobs or decrease in the unemployment rate, but the trend is moving steadily in the right direction. It’s not where we want it to be, but it’s much better than it was…and it looks to continue improving.

6. Corporate sector is rocking—Profits for the Stock market have been spectacular. That means there is money ready to be spent, which is a good sign for economic growth.

7. Net worth is up—The increases in the Stock market (combined with improving home prices) have helped improve household net worth…which is on its way back to where it was before the recession. That means consumers are feeling better about their financial situations, which leads to feeling more comfortable making purchases again—and that’s good for the economy as a whole.

8. Europe looks better—The bottom line is that Europe has cauterized its wounds. That doesn’t mean there won’t be some hiccups or that Europe’s economy will quickly grow, but it does mean that the big concerns of the past couple years should be under control. That’s good news for the global economy, including the U.S. economy, which depends on Europe for trade.

9. Auto sales are fantastic—Auto sales have been doing better over the last couple of years…and are in a solid position. That position is due to auto manufacturers being lean and ready for growth. In addition, consumers who have been holding on to older cars for years are beginning to make new purchases. That’s good for jobs and the larger economy.

> Click here to read part one of this three part blog series.

Source: Mortgage Success Source, LLC

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Top 13 Things to Watch for in 2013 – Part One

What will this year bring? What’s happening now and what does it mean? We’ve got the answers you need—all wrapped up into 13 predictions about topics that will matter in 2013!

  1. Stable energy and commodity prices—Energy and non-food commodity prices appear to be holding fairly steady. There may be small blips of changes, but energy (and transportation) prices shouldn’t spike in the coming year. That’s good news for the overall economy, as it continues to grow.
  2. Low inflation—Stable energy and commodity prices will help keep inflation in check. That’s good news for Bonds, since inflation is the archenemy of Bonds. And anything good for Bonds is also good for home loan rates. After all, home loan rates are tied to Mortgage Bonds.
  3. Interest rates low for a long time—The Fed is buying $85 Billion a month, which helps keep interest rates low. Even when the Fed starts winding down its holdings, it will do so slowly and transparently—so there isn’t a fear of a huge spike in the near future.
  4. Consumer sentiment is improving—This indicator has come a long way. Better yet, there is still room for improvement in sentiment, so we should continue to see improvement. That progression looks steady but solid, meaning that consumers are less concerned about the direction of the economy and are ready to move forward.

Source: Mortgage Success Source, LLC

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Welcome to Ann Arbor Mortgage, Art Fleischer

We are pleased to have Art Fleischer return to Ann Arbor Mortgage as Senior Loan Officer.

A graduate of Oakland University, Art Fleischer has lived in the area for nearly two decades. Art has extensive experience in the mortgage industry, previously working at Ann Arbor Mortgage. Art took a brief hiatus in 2008 to launch the Coalition for Independent Living, a Livingston County based non-profit providing professional Representative Payee services for people in Livingston, Washtenaw, and the surrounding counties suffering from mental or physical disabilities who need help managing their day to day finances.

Art Fleischer brings a vast experience in the industry and strong work ethic to Ann Arbor Mortgage. He can be reached at art@a2mc.com or 734-669-5880 ext. 5934.

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