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VantageScore Facts For Delaware Home Buyers

Thursday, March 21, 2013
by Katina Geralis

Most Delaware home buyers are familiar with FICO - the traditional credit scoring model that is used by lenders to determine borrowing risk. FICO has dominated the credit scoring market for the past 20 years, but the new VantageScore system is gaining ground!

Per a recent CNN Money article, VantageScore is now used by 4 of the 5 top mortgage lenders in the country. VantageScore is also used by:

7 of the top 10 financial institutions
6 of the top 10 credit card issuers
4 of the top 10 car loan companies

VantageScores have been around awhile, but have been confusing because the scoring range was different than FICO. The latest version of VantageScore solves this.

Going forward, VantageScore and FICO will have a credit score range of 300 to 850, with 300 as the lowest score and 850 as the best possible score.

There are some differences in the scoring models that could benefit Delaware home buyers. VantageScores will count rent payments, utility bill payments and public records in their computations. This will provide credit scores for consumers with little or no borrowing history, who usually fall through the cracks with FICO.

Another big plus of VantageScore: collection accounts will not hurt your score if the balances are zero.

In other respects, the two scoring models are very similar - and neither one is going to tell you exactly how they come up with your score. Nor is your lender likely to tell you in advance which credit score company they will use in their lending decision. Lenders may use both FICO and VantageScore for a more complete picture of credit risk.

No matter what type of score is used by your lender, paying your obligations on time, and keeping your credit use to a minimum, will strengthen your score!

Understanding how credit scores work can help you get approved for a mortgage, and potentially save you thousands of dollars in mortgage interest. For a complete overview of the home buying process, including how to qualify for a mortgage, join us at our FREE first-time home buyer seminars! The next one is in Newark on April 20, 2013! Register here to save your seat!

Always feel welcome to contact me for more information about homes for sale in Wilmington and Newark! I am here to help you with your home ownership goals!

Katina Geralis
Wilmington, DE Real Estate Expert
Keller Williams Realty
Wilmington Real Estate
Wilmington Homes for Sale
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How Much of a Price Discount is in a Delaware Foreclosure?

Monday, March 11, 2013
by Katina Geralis

A recent article in Real Estate Economy Watch poses a popular question: just how good of a deal is a foreclosed home, anyway?

It depends on the condition of the home, and the bank’s motivation, and the home location. The strength of the local economy also plays a role. The amount of discount can also be influenced by the supply of foreclosed homes on the books, and the price that investors are willing to offer on them.

How cheap can a foreclosure get? The amount of reported discount varies by source. Per a national appraiser, the average foreclosure discount was 12.2% off of fair market value at the end of 2012. During 2011, the average foreclosure discount was 13.4%.

But according to the National Association of Realtors, the January 2013 discount levels are about 20% below market value. They estimate that discounts averaged 25% or more during the peak of the foreclosure crisis.

Foreclosures that require repair have seen greater discounts in recent months. According to HousingPulse, the average price for a damaged foreclosure in January 2013 fell to $88,100. This is 17.1% below the average price recorded a year ago, and also the lowest average price for this kind of property in the past four years.

As home inventory narrows, one might expect foreclosure discounts to soften, but in parts of the Midwest and Northeast, we are seeing the opposite trend. One reason is that investors are dominating the foreclosure market, with fewer buyer-occupants entering the fray. It is difficult for a home buyer who needs a mortgage to complete with a cash buyer who can close tomorrow.

When you look at foreclosure discounts city by city, the degree of price discount can be vastly different from the national averages. Here is a sample of where foreclosure discounts stood in major markets at the end of 2012:

  • Baltimore, MD 29.6%
  • Pittsburgh, PA 30.2%
  • Philadelphia, PA 33.3%
  • Boston, MA 33.0%
  • New York, NY 28.2%

Thankfully for homeowners, we are seeing fewer foreclosures and a higher ratio of short sales in the market. But it’s clear that the foreclosures coming to market are being priced aggressively. For this reason, home values in Wilmington and Newark will continue to be impacted by foreclosure discounts. How much of an impact depends on how many foreclosures we have vs. market value sales.

As your professional Wilmington and Newark, DE real estate agent, I have the experience in short sales and foreclosures to help you buy or sell distressed properties successfully! Please contact me today with any questions you may have!

Katina Geralis
Wilmington, DE Real Estate Expert
Keller Williams Realty
Wilmington Real Estate
Wilmington Homes for Sale
Visit My Website
Contact Me
Find me on Facebook
Follow me on Twitter

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