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Do You Know the Score?

Your credit score, that is. Millions of Americans don’t realize that they can save hundreds, if not thousands, of dollars annually by maintaining a good credit score. With a high credit score you’ll qualify for lower interest rates on credit cards, auto loans, home equity loans and mortgages. Landlords and utility companies often check your scores as well to determine your credit worthiness. The savings from a good credit score can be substantial and may make the difference between being able to afford your dream home and having to continue renting.

Credit scores range from 200 to 800, with the top number representing a sterling rating. The closer you are to the bottom, the less chance you have of obtaining a loan at anything resembling a reasonable rate.

If you don’t know what condition your credit is in, you can request a free credit report from any one of three bureaus – Equifax Inc., TransUnion LLC or Experian Group. You’re entitled to one report from each of the three every year. The report will show your current loan and credit card standing. To learn your actual numerical score usually costs about $15. Log on to www.annualcreditreport.com to learn more or order a report.

There are a number of ways you can increase your credit score, according to Washington Mutual bank of Seattle:

-Avoid charging above your maximum limit on a credit card, or coming close to the limit. It’s best to stay at 50% or lower.

-Don’t open multiple new accounts at the same time

-Pay off your debt; don’t switch it to another card
-Pay down large credit card balances

-Don’t miss a monthly payment; pay the minimum if that’s all you can afford at the time

-On the other hand, don’t get into the habit of always paying the minimum

If your credit score isn’t all it should be, heeding any of the above steps should help. For more information and advice, contact the Consumer Credit Counseling Service at http://www.cccsatl.org/.

Florida Home Sales Picture a Little Brighter

Florida homeowners aren’t dancing in the streets just yet. But there is good news on the horizon. Overall, sales of existing homes were up for the third consecutive month in May, according to the Florida Association of REALTORS (FAR).

However, buyers are being very particular about neighborhoods. According to Jack Winston, a real estate analyst with Miami-based Goodkin Consulting, the rising cost of gas is stimulating activity in downtown areas and other locations close to work and amenities. This is good news for Dade county markets like Doral, Hialeah, North Miami and, in Broward, West Hollywood, Miramar and sections of Lauderhill. In Broward, about 651 houses and condos listed for less than $199,000 were bought and sold in May, a substantial increase from 2007.

Part of this activity is being spurred by lowered prices due to the many foreclosures in the area. Although financing regulations have tightened up, buyers who are “moving up” are often able to use the money from the sale of their lower-priced home as a substantial down payment for a foreclosure or home whose price has been lowered for a quick sale.
European and out-of-state investors may also be influencing the increase in sales, especially in markets like Miami Beach which experienced more sales in May than almost any other area in Miami-Dade. However, investors and speculators are generally looking for single property values and are not expected to ignite another real estate boom here as they did in the 90s and early 2000s.

The ABCs of CDDs

Many of you have probably heard about CDDs—Community Development Districts—but may not understand exactly what they are. CDDs are boards that levy fees on homeowners in certain developments in order to build amenities such as pools, golf courses, club houses, etc, without having to raise the local tax rate. They are also used to construct roads and lay in utility lines that serve the homeowners who pay the CDD fees.

The good news about CDDs is that homeowners pay a certain amount every year, rather than being assessed for the entire fee up front. CDD fees are also tax deductible for the property owner, as opposed to HOA fees, which are not. They also enable builders to create upscale communities that wouldn’t be possible without the CDD fees, according to Florida state legislator Ken Littlefield.

However, Littlefield notes that buyers often don’t know the risks and aren’t told about all the things that can happen, such as fees going up or paying for amenities that don’t directly benefit the homeowners. Currently, Florida law only requires a sales contract to include a disclaimer stating that CDDs may be imposed on the property. Homeowners are often surprised to learn that the CDD fees may increase at the developer’s discretion, with no recourse available to them. This is because CDD boards are initially comprised of the developer’s associates and are not required to have any homeowner representation for up to the first six years of their existence.

My advice: if you’re purchasing a home in a self-contained community, be sure to ask your real estate agent, or the developer, if there is a CDD clause in the contract. As I stated earlier, CDDs have been the driving force behind many of the fabulous upscale communities that have been built in our area recently. But, as a homeowner, make sure that you are informed about any possible future financial effects of a CDD.