For almost 10 years, I have been writing posts to help people save money and avoid mortgage scams and rip-offs. I have also been writing about repairing and restoring your credit, and how to get a credit score you can be proud of.

But there is always something new to learn! So please post a comment and let me know what you would like me to write about next.

By the way, have you noticed my website and blog posts are not cluttered with annoying ads all over the place? I pay Word Press an annual fee to keep the ads off.

Thank you in advance for your suggestions, ideas, and comments.
Carolyn Warren

Good news that many people don’t know… underwriters DO count the following income sources when you apply for a home loan…

Seasonal Work Some jobs, such as construction, roofing, road construction, etc. are seasonal and it is standard to receive unemployment income during the off season. That is perfectly fine and your unemployment checks count in your annual income. Calculate your annual income for the past two years and then divide it by 24 for your Nannual income.

Overtime Income As long as you can document receiving overtime income for the past 12 to 24 months, you can put it on your loan application. (Whether 12 or 24 months is required depends on the overall strength of your loan application for the automated underwriter.)

Pay Increase For a recent pay raise, explain and document, then you can use your new, higher income to quality. (Your loan officer will help you with this.)

Incarceration Income For people who were in prison, write down your prison job and income, such as: Federal prison, Custodial work, $35/month, 15 years. You use that to satisfy the two=year employment requirement. Then you will need 12 months of employment on the outside, and that is the income figure that will be used to qualify. If you have been out of prison for more than 24 months, do not include your prison job on the application at all, because only a two-year record of working is required.

Recent college grads Your years in school count toward the two-year employment requirement, but you need at least 12 months earning income. If you graduated three months ago and began work immediately, you need nine more months of income to qualify for a mortgage.

The above is an excerpt from Chapter 17, “Income: Qualify Your Earnings Like an Underwriter,” Get the Mortgage You Want Like a Pro.

If you’re planning to buy a home in the next year or two, this is important information to know now so that you don’t get caught unawares.

INCOME YOU CANNOT COUNT ON A MORTGAGE APPLICATION with a bank, credit union, or any loan using government money. (You would need a non-conforming loan available through mortgage brokers.)

Tip money that is “under the table” and not declared on taxes.

New self-employment income that is less than 24 months. If you’re newly self-employed, that is not enough time for the underwriter to average your income or see the income trend.

Inheritance, because it is not an ongoing income. However, you can use it for your down payment and/or closing costs.

Lottery winnings don’t count, because they are a one-time windfall. However, you can use it for your down payment and/or closing costs.

Cash income that is not declared on 1040 taxes. You can’t count secret “under the table” income.

Exaggerated income, surprisingly common. The income on your loan application must match your W2, 1099, tax returns. The underwriter always checks and recalculates, so there is no sense in exaggerating on the application.

For the following income, you must have been receiving it for at least two years:

• Part-time work
• Tip income
• Automobile allowance
• Self-employment income
• Gambling income
• This is not a complete list, just some of the most common types of income that require two years of receiving.

This information is taken from Chapter 17 “Income: Qualify Your Earnings Like an Underwriter,” Get the Mortgage You Want Like the Pros.

$2,500 is now available to be used toward buying a home if your income is below 50% of the median income for your area. Here are the facts:

This is a true grant from the U.S. government housing agency. You do not pay it back.

The $2,500 goes toward your down payment or loan costs, it is not given to you as cash.

To see if you qualify, Google “median income for <zip code>.” Then see if your income is below half of that. For example, the median income for Wenatchee, WA 98801 is $70,800. If your income is $35,400 or lower, you qualify for this grant.

This is for owner-occupied homes, not rentals or investment properties.

How to Get the Grant

This grant comes from the Congress-chartered company referred to as Freddie Mac. They provide money to banks and mortgage lenders. You get this grant from any bank or mortgage lender that uses Freddie Mac money.

Call and ask, “Do you have the new $2,500 grant from Freddie Mac?”

Low Income, not Low Credit

To get the grant and buy a home, your credit must qualify and you must be able to afford the proposed house payment. If your rent is the same as a mortgage payment, I encourage you to look into this with a local mortgage broker.

If you liked Repair Your Credit Like the Pros, you will absolutely love my brand new book that I spent the last three years researching: Book 2: Repair Your Credit Like the Pros DEEPER DIVE. This is not a repeat of the first book, and it assumes you have already read the first book, Repair Your Credit Like the Pros.

Deep dive research went into this book. I interviewed executives at FICO, Experian, and some of the most successful (ethical) credit repair business owners in the country to learn what goes on behind the scenes and what’s working best now in 2024.

I have written 27 brand new letters to go with this new book. Here is a list of the letters in this book:

1. Letter to correct name.
2. Letter to credit bureaus to correct personal identifiers.
3. Sample Letter to Dispute Merged or Mixed Credit.
4. Letter #1 to delete a derogatory closed account.
5. Letter #2 to delete a derogatory closed account.
6. Alternate Letter to delete a derogatory account with a wrong balance.
7. Follow-up Letter if they failed to delete the account as requested.
8. Letter to delete an account that you previously, accidentally  confirmed.
9. Letter with Proof to Remove False Late Payment.
10. Letter to Creditor/Lender to Delete Late Payment Without Proof.
11. Letter to Credit Bureau to Delete Uncharacteristic Late Payment.
12. Letter for Covid-related Late Payments.
13. Letter to Delete a Late Payment on an Open Account.
14. An Alternate Letter to Delete a Late Payment.
15. Information Saturation Letter.
16. Sample Letter to a Bank.
17. Goodwill Letter if You Feel Like You’re in the 1% Lucky Group.
18. Courtesy Request Letter #1.
19. Courtesy Request Letter #2.
20. Letter to delete derogatory information due to the CARES Act.
21. Metro2 Letter Demanding Deletion.
22. Metro2 Letter to Dispute an Auto Repossession.
23. Letter with Sections 605, 609, 611, 623 for Compliancy.
24. Letter to remove medical account that is less than $500.
25. Letter to Delete a HIPAA Violation.
26. Letter to delete duplicate accounts.
27. Sample Method of Verification Letter. 30

Pick up your copy now, while it’s still brand new, before the price increases.

Unlike introductory guides, this book does not tread on familiar ground. It assumes you have a foundational understanding of credit repair and launches you into a deeper realm of insights and strategies. Each chapter is meticulously crafted to provide actionable steps that propel you toward a clean credit profile and a higher credit score.

I had the opportunity to communicate with a former representative of one of the big three credit bureaus.

I asked about a scenario where the person had good credit but one 30-day late payment had plummeted their credit score.

The person hadn’t meant to be late, but mistakes happen.

As a representative who read dispute letters and made judgment calls every day, how would she handle a letter that said the late payment was in error, that they paid their accounts on time, and that their credit was very important to them?

“How likely would it be for you to delete that late payment?” I asked.

Her reply: “Whenever I saw that the person had a good history of paying on time and there was only one late payment? Yes, I would delete that all day long!”

She went on to say that a low score due to one late payment was not indicative of the person’s credit habits, and that it was unfair to penalize them in a situation like that.

This is interesting, because the person who has a 750+ credit score, who accidentally accrues one 30-day late payment, is penalized much more severely than the person who has multiple late payments scattered all over their credit history. How is that fair?

The system thinks that if a person with stellar credit suddenly misses a payment, then a financial catastrophe has happened (like getting fired from their job with no savings to tide them over) and they are on the brink of many more late payments.

Is that assumption fair? I don’t think so, but that’s the way the system is set up. And not only that…

If a person with perfect credit has a late payment with one credit card, then their other three credit card companies may see that and assume the absolute worst. “Horrors, this person is about to go into complete default on our account! Quick, let’s send them out a notice of an increased interest rate asap!”

Friends, watch your credit. If you accidentally go one day past due, call the creditor immediately and ask them not to post the late payment on your credit report. They will usually charge you the late fee but agree to forego posting to the credit bureaus.

And if you happen to have a 30-day late payment on your otherwise beautiful credit report, send a customized dispute letter directly to the creditor pointing out how you like doing business with them and have always paid on time. If your letter reaches the right person, you have a very high chance of getting that late payment removed.

When the creditor instructs the credit bureau to delete a late payment, it happens pronto without verification required.

For more information on how to Repair Your Credit Like the Pros, see here.

Let’s make 2024 the year of GOOD CREDIT! Happy New Year!
Carolyn Warren

The IRS temporarily suspended the pursuit of taxes during the pandemic years, but that is now ending.

If you receive an automated collection notice from the IRS, DO NOT IGNORE IT. The IRS has leverage that no other creditor has, and they won’t forget, go away, or fade into oblivion.

The IRS has geared up to send notices for individual taxes that were behind before the 2022 tax year. They are also sending notices to businesses, organizations, trusts, and estates that have tax debts up to the 2023 tax year.

This applies to 4.7 million tax payers, 70% of them earning less than $100,000 a year.

Now for some GOOD NEWS.

While you still have to pay back taxes owed, the IRS has announced they will waive accumulated penalties and interest. How generous, right?! I know, but it’s something, and we’ll take it.

You don’t have to apply for your part of the $1 billion tax penalty relief program. The IRS will automatically apply it to your account, but do look at the figures to make sure what they say you owe is only the tax amount and not any added fees or interest.

Again, do not ignore a tax notice from the IRS. Prioritize this! And if you are unable to pay, call and work out a payment plan. The IRS will let people make monthly payments–without interest–so set up that plan and protect yourself from severe consequences.

Statistics are showing a weird anomaly. It makes no sense to me. What do you think?

FACT: 62% of Americans are living paycheck to paycheck. (per LendingClub)

FACT: 74% of Americans are stressed over their finances. (per CNBC survey)

Those two facts tell us well over half of Americans don’t have enough money to be comfortable with their finances. Now check out three more statistics.

FACT: Holiday spending this year looks like it broke all records with both in-store and online shopping. (per National Retail Federation)

FACT: 96% of Americans were expecting to overspend this holiday season. (per TD Bank)

FACT: Only 23% expect to be able to pay off their new debt within one to two months. (TD Bank)

What I’m reading is that people’s actions don’t match up with what their brains are telling them about their money.

The majority are saying they’re stressed about not having enough money, and yet they’re spending even more than before — ? How does that make sense?

I would love to hear your thoughts about this. Please click on comment to post. (The system requires me to allow the post due to too many spambots, but don’t worry, I will read and enable your comment asap.)