Land Park, East Sacramento
and Curtis Park Specialist

CAUTIONARY TALE ABOUT PACE LOANS

CAUTIONARY TALE ABOUT PACE LOANS

I just attended a meeting today in which PACE loans were discussed.  For some, these are a great option, but everyone should understand the program in it’s entirety and the repercussions of using such a loan.  Many of the very people who promote these loans have not been trained to give the entire picture, so they may not even know the program as they should. PACE loans are energy efficient loans that are paid by attaching the loan to your property tax bill.  This, in and of itself, might be fine if you are staying in your home during the entire time the loan is in place.  However, if you plan on selling while the loan is in place, you are very apt to experience some hurdles. Government back agencies have said that they will not loan on a property that has a PACE loan on it.  That means that if you sell your home, you must pay off the PACE loan before a new loan can be put in place.  This can be a significant burden if yours is a recent purchase and there isn’t much equity yet.  Also, most PACE loans have an early payoff fee of up to 3%.  So, not only are you forced to pay off the loan, but the additional fee as well. When you are being approached by a salesperson to use a PACE loan, be sure to get a quote from him without using the PACE program – you might find a significant difference in cost.  You also would be smart to get other bids without the PACE loan. If you...

CREDIT SCORES DO’S AND DON’T’S!

Isn’t it amazing how much a little three digit number can affect our daily lives?  Credit scores can influence not only our ability to purchase a home or car, but can affect the quality of our credit cards and our ability to get a job.  Here are some interesting facts about credit scores: Does viewing your credit score hurt your score?  If you are simply viewing for your own information, it doesn’t usually change the score.  However, if your lender is pulling your credit score, it can slightly lower it. Do you want to help your children by co-signing their loan?  While generous, understand what you are offering.  If they come into some tough times and can’t make their payments, you are going to be held liable and it will affect your credit score. Do you want to help your score by closing old or inactive accounts?  Think twice!  This also shortens the history that the rating companies have regarding your diligence in paying on time. You have made your utility and rental payments on time – doesn’t that count for something?  If you hadn’t and they had gone to collections, it could negatively affect your score.  However, making them on time is not typically reported to the rating agencies. You have worked hard to remove those negative records in your credit score.  Now, are those negative records expunged?  Nope.  They can stay on your record for as long  as 7 years. So, there you go!  Keep that credit rating strong simply by on time payments and not overloading yourself with credit debt....