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Wednesday, November 30, 2011

Foreign buyers scooping up U.S. homes

By Les Christie
NEW YORK (CNNMoney) -- Hey, wealthy foreigners! Want to live in the U.S.? Buy a home here.
International purchases of American homes are ramping up, and a new Senate bill designed to boost the ailing real-estate market would encourage globe-trotting investors to buy even more.

The bill, co-sponsored by Charles Schumer (D-N.Y.) and Mike Lee (R.-Utah) would grant a U.S. visa to international investors who agree to spend at least $500,000 on residential real estate here.
If passed, the legislation could add to a surge in homebuying by international purchasers over the past year or two that's already given some local U.S. markets a welcome boost.
Growing international interest
Foreigners spent $82 billion buying up U.S. homes in the 12 months ended in March, up 24% from a year earlier, according to the National Association of Realtors (NAR). That represents 8% of total U.S. sales.
In places like South Florida, international buyers already account for a whopping 25% of the market. California, Texas and Arizona also attract many foreign buyers, as do Hawaii and New York.
South Florida condo sales have been surprisingly strong, said Brad Hunter, chief economist for Metrostudy, a housing analytics company. "And the majority of those sales are to South Americans and Canadians," he said.

Your local forecast

All that international buyer activity has been a tonic for the anemic Florida market. Housing starts were up nearly 20% in the three months ended Sept. 30, according to Metrostudy.
In Manhattan, there's been a steady baseline of foreign condo buyers, said Jonathan Miller, CEO of Miller Samuel, a New York appraisal firm. They generally account for about 15% of investors, but in recent years, the buyer mix in New York City has shifted, he said.

clear skies,
Doug Reynolds

Tuesday, November 29, 2011

How do Distressed Properties Affect Market Value in the Sacramento Area?

Doug Reynolds, a Sacramento Area Realtor, discusses the topic with a local appraiser.  Ryan Lundquist, Ludquist Appraisal Company, explains the complexities of how distressed properties (bank owned forclosures and short sales) affect the overall prices in the Sacramento Area real estate market.  Give Ryan a call or email if you have any questions about the value of your home (http://sacramentoappraisalblog.com/)
clear skies,
Doug Reynolds

Monday, November 28, 2011

'Buyer's market' expectation leaves homebuyers disappointed

By Jim Buchta, Star Tribune
MINNEAPOLIS -- Jessica Harrison thought she knew what to expect when she decided to look for a house: a buyer's market.
And why not? Prices in Minneapolis, as in much of the country, are down sharply since 2009. And with so many foreclosed properties for sale, Harrison was certain she would find a good deal fast.
Instead, the Minneapolis teacher waded through countless homes during what became a two-year search. Most needed too much work. When she found a move-in-ready house, she lost out to bids she couldn't match. Harrison tried to buy a home through a short sale, too, but the deal fell through after six months.
She finally reached a deal on a tidy house in south Minneapolis and expects to close at the end of this month.
"There were multiple properties available, but I wanted to get a house that I could move into," Harrison said. "A lot of the houses needed a lot of work, and I didn't have the money or resources to do that."
Homebuyers no longer can assume that it's easy to buy a cheap house in a good location. Make no mistake: There are still more sellers than buyers. But the decline in listings and the quality of the options are slowing the search for those on the hunt, as would-be sellers hold on to their homes until the market improves. U.S. home listings in September fell to a four-year low, according to Realtor.com.
"(Buyers) have to be patient until the right home comes along," said Ryan Haagenson, a sales agent with Re/Max Results in Minneapolis. "And ready to pull the trigger when it does."
Homebuyers can run into complications during their search in other ways. Often, they may come across houses that appear available but already have an offer. When an offer is made on a house that is foreclosed or going through a short sale, a third-party approval is required, usually a bank.
In those cases, the agent isn't required to change the status of the listing from active to pending.
During a recent house hunt for a client, Sarah Fischer Johnson, a sales agent with Edina Realty, found 28 three-bedroom townhouses in Shakopee, Minn. They were priced from $250,000 to $350,000, but nine already had offers awaiting lender approval.
"The data would lead any buyer to believe that it's a buyer's market," she said. "No, and that's the sad part."

clear skies,
Doug Reynolds

Tuesday, November 22, 2011

What should I be looking for when I’m buying a home?

Doug Reynolds, a Sacramento Area Realtor, discusses the topic with a home inspector.  Kelly Morris, Morris Certified Inspections, answers the question by explaining to pay attention to your instincts, look at the overall condition of the home, and make sure you look at the costly items (roof, air condition, heater, water heater).  Don’t forget that the internet can also provide some useful information.  Call Kelly today to schedule and inspection and mention this video to him to get $50 off your next home inspection.

clear skies,
Doug Reynolds

Monday, November 21, 2011

How much money do I need for a down payment to buy a home in the Sacramento Area?

Doug Reynolds, a Sacramento Area Realtor, discusses the topic with a local loan officer. Erick Perpich, loan officer with Republic Mortgage, talks about the different options of VA 0% down payment, FHA 3.5% down payment and Conventional 5% down payment. You do not need to have 20% down payment to buy a home. It simply is not true and sometimes a poor decision for the buyer as well. Give Erick a call or email today if you are looking to see how much of a home you could purchase and exactly how much down payment and closing costs you would have. (http://www.republicmortgage.com/eperpich)

clear skies,
Doug Reynolds

Knowing When to Refinance

Published: October 20, 2011

REFINANCINGS made up 79 percent of all 2011 mortgage applications as of early October, according to the Mortgage Bankers Association, about the same level as last year but well above the 54 percent average of the last decade. Many of these applications have come from so-called serial refinancers in a constant search for the lowest possible interest rate.

Industry experts warn against rushing into a refinancing, especially if you’re a first-timer.
“The first question I ask people is, ‘What are your long-term plans — what are your plans for this house?’ ” said David Boone, a first vice president for residential lending at Provident Bank in Jersey City.
If you don’t plan on staying in your home long enough to recoup the closing costs of a refinancing, it may not be worth the effort, he said, adding that it takes about a year, on average, for that to happen these days. (A homeowner can expect to pay an average of 3 to 6 percent of the outstanding principal in refinancing costs, according toLendingTree.com.)
“You have to do the math,” Mr. Boone said. If, for example, closing costs are $2,000 but your monthly savings will be $200, you will break even in 10 months.
Homeowners may also want to forego a refinancing if the difference between their current mortgage rate and new loan rate is a quarter of percentage point or less, he said — although other mortgage experts say the gap should be closer to a percentage point.
Borrowers will need to consider other financial goals, like saving for college or retirement. “Think about it in a big-picture kind of way,” said Betsy Billard, an adviser at Ameriprise Financial in Manhattan. “Make sure it makes sense all around.” Can the monthly savings from the refinancing be invested and used toward these goals? How will the refinancing affect your tax bill?
After these issues have been discussed, don’t jump at the first advertised low rate dangled in front of you, Ms. Billard said, advising borrowers to shop around for a broker who can offer a variety of loan choices.
Phillip Loria, the president of Amerimutual Mortgage, a broker in Astoria, Queens, says borrowers should also resist becoming fixated on obtaining the lowest possible rate. “Sometimes people get caught up in that eighth of a percent,” he said, mentioning one recent client who calculated savings of $90,000 over the life of his refinanced loan. When rates ticked up an eighth of a point, the client held off — even though he still would have saved some $88,000 over all. “They try to time the market so perfectly that they end up doing nothing,” Mr. Loria said.
Here are four questions that borrowers should consider carefully before proceeding with a refinancing, according to experts.
HOW SECURE IS YOUR JOB? If you feel you could be out of work in six months or a year, then don’t use up savings to cover fees or increase the down payment. “You don’t want to rob yourself of liquidity because you’re throwing it all in your house,” Ms. Billard said. A follow-up question could be: “If you think you could potentially be out of a job in six months, how will the refi work for you?”
WHAT ARE THE SAVINGS? Get a good-faith estimate from your lender and make sure it includes all the costs involved. Then compare these numbers with the amount you would save in the first year of the new mortgage. (Look at the difference between your old monthly payment and your expected new one and multiply by 12.)
WHAT ABOUT THE RATE? Are you getting it locked in — and for how long? How many points are you paying to get a lower rate? Ask to see a rate sheet, Mr. Loria said.
WHAT’S THE RIGHT TIME FRAME? If your children are heading for college in nine years or your retirement is likely in 15, your mortgage term should match up. Most mortgages are made in five-year increments, but some lenders will offer more variety. “You actually can get a 23-year loan,” Mr. Boone said. “You just have to ask.”
clear skies,
Doug Reynolds

Saturday, November 19, 2011

Ten things you need to know about buying or selling a home

By Deborah K. Dietsch of the Washington Post


After staying put during the economic recession, you might be tempted by stabilizing real estate prices and low mortgage interest rates to sell your house and buy your next place. What you might not realize is how long and complicated the process of buying and selling a home has become. New lending regulations, appraisal procedures and consumer expectations can throw up roadblocks for even the most seasoned flipper. Many homeowners who haven’t sold or bought a home in the past few years will find that many of the old “rules” have changed. Residential real estate experts suggest homeowners become aware of the new rules before listing their current property and searching for a new home.
1. A bigger down payment might be necessary.

Buyers seeking homes in upscale neighborhoods may have to come up with a higher down payment, since jumbo loans aren’t available in the amounts that they used to be. “You used to be able to borrow up to $729,750 in high-cost areas inside the Beltway, but now the maximum is $625,500. If you exceed the limit for the area, your loan becomes nonconforming,” said Catherine Smith of First Home Mortgage in McLean. “There are fewer sources for that money, and interest rates are higher.”
Documentation of income and reserve funds is required of all loans, but the process is more stringent for securing a jumbo loan. “Lenders want to make sure the borrower can handle unexpected expenses, loss of income or other financial bumps in the road after closing,” said Debbie Polcyn of First Savings Mortgage in Bethesda.
2. A buyer’s market? Not entirely.
Home prices and mortgage rates are down, but buyers might not be in the catbird seat in some sought-after neighborhoods, where properties are worth almost what they were between 2005 and 2007. In August, median sales prices of houses in the District reached almost 88 percent of their peak value, prices in Northern Virginia rose to nearly 80 percent of their high and those in suburban Maryland climbed to nearly 67 percent, according to the George Mason Center for Regional Analysis. But within each county and, indeed, each neighborhood, there can be a lot of variation.
“Inside the Beltway, it is somewhat balanced between a buyer’s and a seller’s market because there are fewer buyers out there and less inventory,” said agent Jamie Koppersmith of Century 21 Redwood Realty. When priced right, he said, homes can still attract multiple offers. Confirming this reality is agent Anslie Stokes Milligan of McEnearney Associates, who said she fielded seven offers earlier this month on a rowhouse near Dupont Circle.
3. Sellers, don’t put off those remodeling projects.
Call it the “HGTV effect.” The proliferation of home improvement shows on cable television has increased buyers’ expectations of finding homes in move-in-ready conditions. Except for do-it-yourselfers intentionally looking for a fixer-upper — with a lower price to match — buyers want older homes to look like new.
They now expect sellers to have renovated older kitchens and bathrooms, replaced windows and refinished floors. “There is intolerance among today’s buyers for properties that haven’t been updated appropriately,” said realtor Morgan Knull of ReMax Gateway. “Granite on countertops is no longer an upgrade — it’s an entitlement.”
4. Home staging could be worth the extra cash.
“Besides new paint, staging is the best return on investment you can make,” said agent Rachel Valentino of Keller Williams. Particularly for vacant homes, she said, “It’s difficult for most buyers to walk into an empty house and see how their furniture would be placed. You have to do the legwork for them.”
With so many buyers searching online for properties, well-decorated rooms with visual impact are critical to standing out from the crowd. “If the photos look depressing, buyers may never walk inside the front door,” said Knull. Staging, he adds, is most valuable in properties with small or unusual spaces.
Professional stagers both rearrange owners’ furniture and redecorate from scratch, but their services don’t come cheap. A two-hour consultation with staging advice typically costs $200 to $300, and outfitting the main rooms with rented furnishings can cost $5,000 or more. “The national average to stage a vacant house is about 1 percent of the asking price,” said Monica Murphy, owner of Preferred Staging in Potomac Falls, Va.
5. Appraisals might not match price expectations.
The days of cherry-picking a friendly appraiser to assess a property within 24 hours are over. In 2009, a practice known as the Home Valuation Code of Conduct went into effect to ensure that homes are appraised fairly, without the influence of lenders and third parties. The policies are still in place for conforming mortgages sold to Fannie Mae and Freddie Mac, and they have created unintended consequences for appraisals.
Now lenders often outsource the process to third-party appraisal management companies to avoid any conflict of interest. Since the appraisal fee is now shared between the management firm and the appraiser, the appraisal can cost more, with the higher price passed on to buyers and sellers. “Not only is the consumer paying more but getting lower quality,” said Ken Chitester, spokesman of the Chicago-based Appraisal Institute. “Top appraisers won’t do the job for less than they used to be paid, and often the selected appraisers are the least experienced professionals available.”
In some cases, appraisers might undervalue the property because they are unfamiliar with the community in which the house is located. Realtor Kimberly Cestari of W.C. & A.N. Miller found one of her listings in Chevy Chase was appraised at $100,000 less than the sales price because it was a rambler in a neighborhood full of colonials. “I found a rambler of similar value in [the nearby neighborhood of] Forest Hills and the appraisal went up. It was a nail-biter,” Cestari said. “The onus is now on the listing agent to provide the appraiser with relevant comparables to show them how we arrived at the price.”
The seller can also help prove the value of the home. “Provide the appraiser with a list of repairs and upgrades to the home over the past four to five years,” said Frank John of Washington Appraisal.
More layers of administration and quality control between lenders and appraisers mean the appraisal process takes longer. “Generally, it takes seven to 10 days,” said McEnearney Associates’ Milligan. “Some lenders require two appraisals for some FHA and jumbo loans.”
6. Start saving your financial records to show the bank.
Lenders now require more documentation than ever to be convinced of financial qualifications. “We have to validate everything,” said Smith of First Home Mortgage. Her advice to a potential buyer? “Become a paper hound. Come prepared with two years of tax returns and two years of bank statements for all assets. Be ready to defend your credit.”
Buyers need a credit score of at least 620, the minimum accepted by Fannie Mae, and many lenders require higher scores. “In general, the lower your credit score, the higher the interest rate will be on the loan,” said Polcyn of First Savings Mortgage.
7. Prepare to spend more time securing a loan.
What used to take two weeks can now take 30 to 60 days, according to several lenders. “The absolute number one reason that the loan process has lengthened is because of compliance with federal regulations,” said Polcyn. She also cites increased loan documentation requirements, more intensive underwriting and quality control processes such as fraud checks as contributors to the wait.
Meeting with a loan officer before you start looking for a house can help pave the way to more financing options and a smoother deal. “Get an accurate snapshot of interest rates and monthly payments before you start shopping,” said Valentino.
8. The home inspection is back with a vengeance.
Waiving the inspection was one way to beat the competition during the go-go market of 2005-07. Now buyers view the top-to-bottom assessment of a home as essential to making sure their investments are sound. Some even see the inspection as an opportunity to get renovations done at the seller’s expense. “People are asking for more and more on the home inspections,” said Cestari. “Buyers are becoming pickier. I’ve had them request the sellers paint the trim, replace the gutters, line chimneys.”
To avoid a second price negotiation over fixes, some agents recommend that sellers pay for their own inspection before putting the house on the market and making the report part of the disclosure package. “I encourage the owner to service the heating and cooling system, and get chimney and termite inspections,” said Milligan. “Those are three big-ticket items that buyers bring up frequently.”
9. Sell or rent before buying
or be willing to pay two mortgages.
Selling one house and buying another used to happen in quick succession, without the need to rent temporary quarters and move a household twice. Buyers who wanted to purchase a home before selling their existing residence often made the contract contingent on the future sale. Or they opted for a bridge loan as a stopgap measure to finance their next purchase before selling.
But as the real estate market has slowed and lending regulations have tightened, both these options have been kicked to the curb. As a result, sellers can be left scrambling to find a place to live after closing.
Renting a furnished apartment for the transitional period in between selling and buying is an option but an expensive one. Oakwood, a temporary housing company with more than 60 properties in the D.C. area, charges $193 to $209 per day for a two-bedroom apartment in the metro area. Another company specializing in transitional apartments, Turnkey Housing Solutions, charges about $145 per night for a similar unit. ExecuStay Marriott, a division of the hotel chain, works with more than 54 apartment communities in the metro area to offer two-bedroom units averaging $199 per night in the District and $135 per night in suburban Maryland and Virginia. Added to those prices are a 14.5 percent sales tax in the District for a stay of less than 90 days and a 10.5 percent tax in Maryland and Virginia for stays of less than 30 days.
To avoid these high costs, Koppersmith suggests that sellers rent their property back from the buyers for a month or two. “This allows the seller to close on the home they are selling, get the proceeds and then quickly put a contract on another home and settle that property as fast as possible,” he said. “Assuming the seller feels confident they can find a home they would like to purchase, this is a pretty good strategy for bridging the gap.”
10. Pick a real estate agent willing to do the homework, because buying and selling take more effort these days.
Buyers and sellers should insist their agents do more than show listings and run open houses. Today, savvy buyers are well-versed in online tools such as Redfin and Zillow, and they look up a lot of listings data themselves. Buyers should make sure their broker is well versed in the latest lending and appraisal practices and able to navigate around potential land mines that could detonate the deal. “There are so many things that can go wrong with a transaction, even when the buyer and seller are organized and well-qualified,” said Knull . “These days, there seem to be more problems than in the past with buying and selling, and everything takes longer to do.”
Knull said agents should be expected to supply appraisers with detailed information about relevant comparables and market trends and to resolve title issues, especially with foreclosures involving complicated chains of ownership.
Realtors should also be expected to understand short sale transactions and be willing to keep tabs on the buyer even after the contract is signed.
“When an offer comes in, you can’t just assume the buyer will get the loan,” said Koppersmith. “We need to look at the financials they provide as well as talk to their lender to make sure they are qualified and will be able to close the transaction. The last thing you want for your seller is to have the property under contract for a month or more, only to have it come back on the market because the loan wasn’t approved.”
clear skies,
Doug Reynolds

Wednesday, November 16, 2011

Sacramento County Real Estate Update November-December 2011

Doug Reynolds, a Sacramento Realtor, provides an analysis of the local market statistics from October 2011. This month discussing how Sacramento's housing market has shown stability for six months. The median price has stayed flat since May.  Inventory is still on the low side at the time. Many all cash buyers are now writing offers on properties. Roughly 1/3 of all sales being bank owned/foreclosures, short sales and regular/equity sales. More information can be found at his website, www.BuyWithDoug.com, as well as his blog and Facebook page (Doug Reynolds Real Estate). Become a fan of his YouTube page and Facebook pages.

clear skies,
Doug Reynolds

Tuesday, November 15, 2011

Real-time Mortgage rate quotes

The home loan comparison website MortgageMarvel.com allows borrowers to obtain real-time interest rate quotes based on the loan amount, the property's value and the ZIP code, all while remaining completely anonymous. Pricing is updated as quickly as it changes — usually daily, but sometimes more frequently, says Rick Allen, director of strategic initiatives.

However, the best and most accurate way to get an exact rate quote for you is to get preapproved with an experienced local loan officer.  They will be able to provide you the best information but the mortgage marvel website is a good guideline tool to reference.
clear skies,
Doug Reynolds

Monday, November 14, 2011

October 2011 Housing Statistics - Sacramento County

Sales activity for October remains flat, prices show similar trend
Sales decreased just .1% from 1,615 units sold in September to the current 1,614 units sold this month. Year-to-year, closed escrows were up 20.4% from the 1,341 units sold last October. Making up the closed escrows this month were 590 REOs (36.6%), 436 short sales (27%) and 588 conventional sales (36.4%). These numbers have stayed relatively level month to month.

The median home sales price barely changed month-to-month, increasing .4% to $164,900 from the $164,283 median sales price of last month. Compared with October 2010 ($179,500), the median sales price is down 8.1%. Closed escrows from conventional financing (550 units or 31.6% of all sales) decreased 2.1%, cash buyers decreased 7.7% (499 units or 28.7%) and FHA financing decreased 5.7% (534 or 30.7%). The average amount of days spent on the market (from list date to opening escrow) 68 days; the median DOM was 39.

The Total Listing Inventory has been split up to more accurately display the current market. Active Listings numbered 3,477 properties and Active Short Sales Contingent showed 2,162. Active Short Sale Contingent properties are short sale properties on which initial offers have been made and are not entirely “active.” The Housing Market Supply figure for October was 2.2 Months – the same as last month. This figure represents the amount of time – in months – it would take to deplete the Active Listing Inventory (3,477) given the current number of closed escrows (1,544).  According to MetroList® MLS data, the average home was 1,717 square feet. Of the 1,614 sales this month, 148 (9.1%) had 2 bedrooms or fewer, 873 (54%) had 3 bedrooms, 471 (29.1%) were 4 bedroom properties and 118 properties (7.3%) had 5+ bedrooms.
clear skies,
Doug Reynolds

Um, did you get a permit for that?

Description: http://www.signsnowmillcreek.com/vsites/millcreek/user_files/image/handicap-signs/permit-required-blue-sign.jpg

There probably isn't an existing house in the land that hasn't had work done to it — if not a major remodeling, then perhaps some plumbing or electrical work. Either way, how do would-be buyers know if the job was done properly? Or if it was cleared by a local building inspector?

Many jurisdictions require homeowners to obtain building permits to do just about anything. But this is one of the most overlooked aspects of the process.

Owners often leave it up to the contractor to secure the permit. But some contractors cut corners, telling the unknowing client that a permit isn't really necessary for that kind of job or for something so "minimal." Sometimes the do-it-yourself owner knows a permit is necessary but forgets to get one or simply decides not to.

But without a permit, the work won't be examined by a building inspector. There's no way of knowing for sure whether the work meets minimally acceptable construction standards, which are key not just to quality but also to safety.

Enter BuildFax, the construction industry's version of a Carfax vehicle history report. The site collects and organizes the construction records of millions of properties to create what amounts to a background check on the properties buyers might be considering as their new homes.

BuildFax's proprietary property intelligence engine contains building and permitting information from more than 4,000 cities and counties, covering about 63 percent of the country. The database includes more than 72 million residential and commercial properties. Information from urban areas, or places where there is a lot of construction, is updated monthly, other places less frequently.

The service can tell you, among other things, if the remodeled kitchen meets code, when the roof was replaced and who did the work. It can tell you whether the electrical upgrade was done by a licensed electrician or by someone's uncle. And if the furnace should go on the fritz after you move in, it can tell you who installed it so you'll know whom to call to find out if it is still under warranty.

Right now, lenders, insurance companies, home inspectors and appraisers are BuildFax's principal customers. But President Holly Tachovsky said the goal is to provide consumers with the property's "life story" so buyers can use it as a bargaining chip.

"Ultimately, we want to be the source of factual information that helps homebuyers make more informed decisions," she said. "If the seller says he put on a new roof two years ago, you can find out if that's true or not."

The price for all this is $89.95 for three months of unlimited use.

clear skies,
Doug Reynolds

Saturday, November 12, 2011

Is the Zillow Zestimate the correct value for my home in the Sacramento area?

Doug Reynolds, a Sacramento Area Realtor,  discusses the topic with a local appraiser. Ryan Lundquist, Lundquist Appraisal Company, discusses the pros and cons of Zillow and also talks about how to go about finding a qualified appraiser.  Give Ryan a call or email if you have any questions about the value of your home (http://sacramentoappraisalblog.com/)
clear skies,
Doug Reynolds

Thursday, November 10, 2011

Having trouble getting approved for a mortgage ?

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Some borrowers think that because their mortgage application is turned down the first time, they won’t ever be approved.  In reality, some borrowers succeed on the second or third attempt, usually with a different mortgage professional, and often several months later, after they have saved more money for a larger down payment or improved their credit score.
Making sense of the story
  • Before reapplying for a mortgage, borrowers are advised to look at the reasons they were initially rejected.
  • The Equal Credit Opportunities Act requires lenders to give loan applicants specific reasons in writing within 30 days of their decision.  If it’s based on a problem in the borrower’s credit report, the lender must tell the borrower the name and address of the credit agency that provided the information.
  • Talking to the loan officer who denied the application to see how close the borrower was to being approved also can be helpful.  Sometimes the gap is small and could be bridged with a larger down payment or another home appraisal, for example.
  • It also may be worthwhile to shop around for other lenders. 
  • However, first-time buyers may need to scale back their aspirations.  One reason people get turned down for a mortgage is because they try to buy more property than they can afford based on current incomes.
  • Applicants also should look at ways to strengthen their financial picture.  If a borrower’s credit is poor, paying down credit-card balances can help to increase a FICO score. 
clear skies,
Doug Reynolds