We recently came across an interesting article at Nurido News. We are not linking to it here because the article provides advice that the experts at Veracity Credit Consultants do not, and will not, endorse.

You see, it starts out on the right path with this truism…

I cannot promise that [credit repair] will be easy…

That’s absolutely right. No matter whether you decided to repair your credit yourself, or make use of a service like Veracity, credit repair requires work. Services like ours can help speed up the process and guide you toward the right path, but even full service firms like Veracity require that you forward letters and keep updated with fresh credit reports.

It’s at this point the article takes a turn for the worse…

The first step is to stop making any payments on your credit cards.

This is something that Veracity never, ever recommends. Paying your bills on time is the absolute best way to ensure good credit for yourself, and no credit repair strategy, whether DIY or paid for, can remove legitimate negative information from your credit report.

To learn more about DIY credit repair, check out our FAQs.

Via the FatWallet.com forums, we’ve found this credit-related question:

I just pulled my CreditKarma score.
Yesterday it was 752.
Today it is 731.

Has this happened to anyone else today? Or did CK change their formula?

I am back to studying my TU report. Maybe I overlooked something?

As mentioned in the Veracity FAQs, your credit score can fluctuate on a daily basis because of several factors. In this case, the poster mentioned that he does have a credit card whose balance fluctuates between $800 and $4,000 each month. Although he doesn’t mention the limit on the card it is likely that this difference in balance could cause a deviation of a few points in a credit score.

This shift could also depend on when the credit card company makes their report to the credit bureaus. If they happen to report in the middle of the month when this poster’s balance is highest, he may find himself with a small ding to his credit.

In addition, unless your credit report specifies that you are getting a true FICO score, the score will depend on the algorithm that the credit report company uses to approximate the FICO score, and it could depend on factors that would otherwise not affect your FICO.

I recently created this info for an FHA loan scenario for a new first time home buyer when he asked how much money he would need to buy a home:

1. Ask the Realtor for the house and condo prices available for your requested area and size needs.

2. You will want to have a minimum of 3.5% of the purchase price of the house available for the down payment in addition to another 3-5% in closing costs. The seller can “make a concession” to pay all or part of the closing costs portion (up to 6%) if they are able and are negotiated to do so by your Realtor.

3. The down payment/closing costs comes from your normal checking and/or savings accounts (or CDs or possibly even stock accounts or retirement accounts if permissible by the account type) and you want to be sure there are no unusually larger deposits that immediately (within 60 days of closing) show up in your regular accounts during this process.

4. The down payment/closing costs can also be a gift from an immediate family member and must be able to be documented already in the gift donor’s account…and not a loan (can be an equity account, stocks/bonds account, checking/savings etc…but not borrowed at all).

5. Ask the Realtor if there are any community programs that still have funds left for first time buyers and what the amounts are and the income requirements if you qualify…and if they are like a loan and will have a monthly payment amount to them…and if they can be used for both the down payment requirement and the closing costs (many first time buyer community programs are either now gone or no longer have funds available).

6. Be sure your credit reports and qualifying FICO are in acceptable order. Though you might easily qualify for an FHA backed loan with lower than “normal” FICO scores, the *best* interest rates go to those with credit scores now of 740 or better!

For a $300,000 purchase:

1. Down payment of $10,500

2. Approximate closing costs will vary depending on the date you close, the title costs for your area, the property taxes/homeowner insurance actual amounts, if you need any discount points to lower your monthly payment (if available)….but approx: $9,000-$11,000.

Total cash to close: $21,500 more or less

3. Monthly payment approx: $2300 as follows:

a. Principle/Interest at 6.5%: $1862
b. Homeowners insurance if about $1080 a year: $90
c. Property tax if $2600 a year: $217
d. FHA mortgage insurance premium: $135
e. (There could also be a monthly association fee for a condo or development area HOA: $40-$250 or more per month added to the above monthly “escrowed” amount)

4. For this amount of monthly payment, you need to show about $4700-$4900 or more a month gross income (income before taxes are taken out) and AFTER subtracting any credit report liabilities (truck payment, credit card payments, loans payments, etc.)

You can have a co-borrower on the loan…even a non-occupying co-borrower. If you do, they should also have an ok FICO score, low amount of debt and a regular W-2 type job or documented retirement income (self-employed income can be more difficult to qualify right now).

5. Your bank account and non-deposited gifts should be at least the $20,000 or more for the down and closing…more is better and you don’t want to be cash poor at the end. Again, the seller can be negotiated to pay the closing costs part..about half of it, so you would need only about $11,000 in your accounts if using the seller for some of this…but also best to have a couple of months of payments left over in your accounts after closing: about $5000 more or so with a $300,000 purchase. ($16,000 to $27,000 in your accounts all told).

6. You will use some of that $10,500 down payment as earnest money when you make an offer so you will want some of those funds already in an account to use for that…usually $1000-$4000. And you will want $250 – $300 available to pay for a home inspection after your offer is accepted.

7. You will also need $350-$500 to pay upfront for an appraisal valuation on the selling price of the home once the inspection is completed to your satisfaction (the mortgage company will often collect a check or credit card deposit from you for the appraisal amount during the loan application process)… this can be refunded at closing by the seller if agreed by them.

Hope this helps in your planning. Keep saving, document any large deposits, and try not to charge anything else of significance on your credit cards before you are finished buying the home…and get help for the down payment/closing costs and larger monthly home expense payment if needed.

Eileen M. Carda is a licensed, fully bonded and Colorado compliant Mortgage Professional with America’s Mortgage, LLC. You can contact her at 303-903-0394 or visit www.eileencarda.com.

Your current interest rate is 6.25% and you have heard that rates might get as low as 4.5%. Does it make sense to refinance now or should you wait until interest rates drop again? The truth is, there is no “golden rule” that applies to everyone but in this market there are some general rules of the road.

Know the NEW Rules: It used to be that if you could fog a mirror, you could get a loan. The rules have changed quit a bit and the loan you may have used to finance the purchase of your home may no longer be available. If you used a low or no money down loan to purchase your home this can impact the rate that you are eligible for based on the programs that are now available. Working with someone who can help you understand the new rules and how they impact you is now more important than ever.

Know your target interest rate: A target rate helps you determine when it is the right time to refinance. Your target rate is a benchmark rate that establishes your minimum monthly payment savings necessary to make up the cost of a refinance within 16 months. Usually it starts to make sense considering a refinance when market interest rates are 1-1.25% lower than your current rate. Once you determine your target rate your mortgage professional will make sure you don’t miss it when rates drop.

Know the value of your home: Some areas of the Front Range have seen their home values decline. You need to get an idea of what the accurate value of your home is to see if you are eligible to refinance. Many people try to use websites like Zillow to research the value of their home. Those people make assumptions about the value of their home based on the information that they find and don’t find out until later when they are in the process of a refinance that their information was wrong. Work with a good, local real estate or mortgage professional in order to help you determine the value of your home because they are going to be the most familiar with local real estate trends in your area or subdivision.

Bill Rodriguez is a Certified Mortgage Planning Specialist with Cherry Creek Mortgage and part of the HomeWISE Team. The focus of the HomeWISE Team is to help their clients build and maintain their Wealth through Real Estate and to provide Investment Strategies and Education for the Mortgage industry. Contact Bill today at 303-877-6323 or go to www.DenverHomeWise.com