ASK AN EXPERT: Loan Officer

News 13, the Morning News and scnow.com are committed to helping you make ends meet. Along those lines, we will be bringing you a regular series of online question and answer chats called Ask An Expert.

This week, we feature Kelly Britt-Cauble, assistant vice president and retail sales manager for First Citizens Bank. She will focus on lending issues for both consumer and commercial borrowers.

(This chat is no longer active, however we will offer another opportunity to have your questions answered soon.)

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10:45 a.m.
Francis in Andrews asks ...

I am 3 months behind in my mortgage payments and would like to apply for a home modification loan. My current lender will not work with me and I don't know what to do or who to go to. Please help me, I don't want to lose my home.

What you are dealing with at this time is unfortunately extremely common. We have financial institutions that are not willing to help consumers prior to them getting into financial difficulty , however, they are not willing to help after you are in the situation you are now in. Based on the information that you have provided, I am going to give you a few bullet points of options you might want to try.

• Contact the financial institution again to see if they would defer one or two months payments to the end of your loan? This really should be your priority to get face to face with the financial institution to nail down any options or work out a plan.
  
• Ask them to produce the original mortgage that you signed. While they are doing this, it could postpone the foreclosure. At times when mortgages are sold the original paperwork tends to get lost in the shuffle at times.
  
• Do you have an existing relationship with your local banker? Try speaking to them about options that they may have for this situation.
  
• Have you mentioned this to a family member, local church, civic group that might be able to help with at least one payment? Perhaps you could use something as collateral for them to loan you the money?

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10:56 a.m.
J. Cecil in Wallace asks ...

I have a mortgage with 1st Citizens and I have lost my job due to the no demand for our product. We are just making our bills. Our mortgage is three fourths of my wife's take home pay. The president said we are the ones that can refinance and lower our payments to one third of our income. Who can I contact to start this process, before it is to late?

I am going to assume, based on the information given, that your mortgage is residing at First Citizens and has not been sold off. If this is the case, you need to contact the branch that processed the mortgage. You are making the right move at this time to be proactive and upfront about the situation you are in. Since the mortgage is held at First Citizens, your situation will be looked at on the local level. Because of our Position of Strength, First Citizens has not had to accept any government assistance, therefore some of the options that the President is speaking of, may not play into your specific situation. However, as I discussed before, your situation can be looked at on a more personal level.

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11:14 a.m.
Brenda in Pembroke asks ...

I want to get a loan to update my father's home which I will be moving into. My credit score was 550 the last time I checked. What do I need to do to get that up and do you think I will be able to obtain a loan for this project? The things that are messing up my credit are things from five or more years back and most of those are old medical bills that I am trying to clear up.

First know, that you are not alone in this type of situation. Credit scores can be difficult to deal with, especially when it comes to trying to raise them. It sounds like you are on the right track though with paying off the medical bills. To establish good credit, it takes several combinations to make a good score. Paying all of your bills on time is 35% of your score. So you can see how critical that would be to the overall score. Next is the amount of debt that you are carrying. Your goal should be 43% or less debt to income. Take your monthly debt and divide your income into it, this will give you that amount. Those that have 43% ,or less, debt to income, generally have a good chance of receiving a loan.
I personally like to have my customers pull the free credit report at AnnualCreditReport.com this is the website that should be used to help you determine what is on your report and gives you the opportunity to fix it online quickly. If you need more guidance on the credit report, take it to your banker and ask for their assistance. That is what they are there for.
As for qualifying for a loan to fix your father's home, you need to increase the credit score to at least 640 before trying to qualify for a loan. The interest rate will be lower on that type of loan the higher your scores are. The last thing you want is a loan with a high interest rate that will absorb your income. A Home Equity Line is the way to go when you are ready for your improvements. That is a low rate with flexibility.

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11:48
Tanya in Timmonsville asks ...

I am trying to finance a used manufactured home. I've called a few banks a no one will finance me because my credit score is 619 (I was a victim of identity theft in 2003, and besides that my credit is great). I own my land, and could tie it into the mortgage. I also make more than $40,000 a year and have been at the same job two years. I also have about a 10 percent down payment. I feel like I have done everything right but I still can't get a mortgage. I'm not trying to buy beyond my means, and I truly can afford the payments. The dealer said he can get me financed by a finance company at 12%, but in my opinion that is outrageous. Do you know of a bank that would give me a mortgage on a used mobile home with a lower interest rate using my land as collateral? I even tried FHA, but they only loan on new manufactured home and land purchases, or defaulted FHA loans. If you could give me some advice, that would be great.

I can see your dilemma. How unfortunate for you to have to deal with it for so long. There are banks that do finance manufactured homes. However, you are correct on the interest rates. They do run higher. First Citizens offers a 9.25% rate at this time with the land included.
I am sure your credit score will come into play with applying for the loan, but if you have documentation proving the identity theft, that should help you through the process.
One last bit of info, check your debt to income ratio. This could be what is playing a part in the loan process as well. Take your debts and divide your gross income into it and hopefully you are less than 43%.

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2:30 p.m.
Billy III in Asheville asks ...

I was considering refinancing my condo at a lower rate and wanted your opinion on, at what point should I go test the waters with this. I am currently at 5.75% which isn't bad but should I only consider it if I could lower by a full percentage point?

This is one of the most frequently asked questions so thank you for sending this in today. First, consider how long you intend on staying in the condo or using it as an investment. If it is short term, less then three years, you should not refinance. You would be spending more money in closing costs and would not be able to gain the money back in time. To support this, use the amount that you would spend on closing fees, points, etc. and divide by 12. This should give you the amount of months it will take you to gain your money back. Next, take the amount that you would save on the monthly payments if you refinanced over the term of the loan. Compare which of these will save you the most money. If you plan on keeping the property for the entire term of the loan, then you are correct, make sure it is about one point difference. One other factor you need to look at, take years off your mortgage instead of just lowering your payments. With the rates being as low as they are, you could actually cut years off the mortgage which could truly save you in the long run. By reducing the term of the loan, you also will reap the benefit of a lower interest rate.
By the way, we can still work with you personally even though your property is out of state.

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3:51 p.m.
Joe in Orrum asks ...

If I now have bad credit due to repossessions what can I do to get a car loan? How can I improve my credit?

One of the easiest ways to build credit is to use what we call a secured credit card. We have all heard credit cards are "bad". Not in this case. It works like this, you would set aside $650.00 into a savings account. You would apply for a $500.00 credit card with the bank. A hold will be placed on the $650.00. It is still your money, it is still earning interest, however, it is securing the credit card. Use your card for small purchases and payoff card each month. This will allow you to build credit and establish the relationship with your banker. Your banker should be assisting you with improving your credit scores and setting goals for you to get back on track. While your credit scores are building, take this time to save your money for your down payment towards the vehicle.