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What s the Score

Your credit score or FICO score (for Fair, Isaac and Company, which created the system) is a number that indicates the health of your credit. The higher the score, the healthier your credit and the more likely a lender is to approve a loan with good terms. Scores can range from 300 to over 900, with the typical credit score falling in the 600s to 700s.

Credit scores take five different financial areas into account. The  five C s of credit that lenders will look at include:

Capacity. Are you able to repay the debt The lender verifies your employment information: occupation, length of employment, income.
He or she reviews your expenses: how many dependents you have, if you pay alimony and/or child support, your other obligations.

Credit history. Based upon your past payment habits, how likely is it that you will make your monthly payment The lender looks at how much you owe, how often you borrow, whether you live within your means, and whether you pay your bills on time.
BEWARE! As your credit score goes down, mortgage fees and costs, interest rates and other costs go up, up, up! A typical 7% mortgage with a few thousand dollars in fees can go up to an 18% monster with many thousands in fees if you have a low credit score.

Capital. Do you have enough cash on hand for the down payment and closing costs Are you receiving a gift from a relative Will you have reserve money left over after the purchase

Collateral. Is the value of the property worth the investment Is it in sufficiently good condition and is the price appropriate for the home If you do not repay the debt, will the lender be able to recover his investment

Character. Have you disclosed all your debts If you had previous credit problems, did you disclose them

Probate Options in California

Losing a loved one is a sad and difficult time for family, relatives, and friends. In addition, those left behind must often figure out how to transfer or inherit property from the person who has died.

To do this, you must usually go to court. And dealing with the courts and the property of someone who has died is very complicated. Sometimes, however, family or relatives may be able to transfer property from someone who has died without going to court. But it is not always easy to tell whether you need to go to court or qualify to use a different procedure.

 This section will give you some general information to help you understand what your choices may be, but we still encourage you to talk to a lawyer to get specific answers about your situation. You can usually pay the lawyer’s fees from the property in the case.

What Is “Probate”?

Probate means that there is a court case that deals with:

o Transferring the property of someone who has died to the heirs or beneficiaries;
o Deciding if a will is valid; and
o Taking care of the financial responsibilities of the person who died.

In a probate case, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as personal representative to collect the assets, pay the debts and expenses, and then distribute the remainder of the estate to the beneficiaries (those who have the legal right to inherit), all under the supervision of the court. The entire case can take between 9 months to 1 ½ years, maybe even longer.

Deciding If You Need to Go to Probate Court and Whether You Can Use Simplified Procedures

You may or may not need to go to probate court to obtain title to property belonging to a dead person.  Figuring out if you have to go to probate court depends on many issues, like the amount of money involved, the type of property involved, and who is claiming the property.

And deciding if probate court is needed may also depend on the how the property is owned (the type of title ownership) or if there is some type of contract with beneficiaries. For example:

  • Type of Title Ownership:  : Sometimes all or some of a dead person’s property passes directly to the beneficiaries because of how the property is owned. So if the property was owned in joint tenancy, if it was community property with the right of survivorship, if it was a bank account owned by several people, or a bank account that is transferred to someone when the owner dies, then, in general, when the owner of the property dies, the property goes to the survivor. Keep in mind that even in these cases, the survivor may have to take legal steps to clarify his or her ownership of the transferred property.
  • Type of Contract:  Sometimes all or some of a dead person’s property does not need to go through probate to pass to the beneficiaries. This is because this property is a type of contract with named beneficiaries. Examples of this are life insurance that pays benefits to someone else other than the dead person’s estate, retirement benefits, death benefits, and trusts.
If the Person Who Died Left $100,000 or LESS

If you have the legal right to inherit personal property, like money in a bank account or stocks, and the estate is worth $100,000 or less, you may NOT have to go to court. There is a simplified process you can use to transfer the property to your name. The value of the property is based on what it was worth on the date of death –not on what the property is worth now.

  • Keep in mind, this process CANNOT be used for real property, like a house. If the person left $100,000 or less in real property, including some personal property, you may be able to use a form called Petition to Determine Succession to Real Property (Estates $100,000 or Less) (Form DE-310).  You will have to file the Petition with the court, obtain and file an Inventory and Appraisal (Form DE-160), and provide notice of hearing.  Talk to a lawyer to make sure you can use this simplified process in your case. Click for help finding a lawyer.

To use the simplified process for transferring personal property
First, figure out if the value of the property (the estate) is worth $100,000 or less. To do this:

Include:

  • All real and personal property.
  • All life insurance or retirement benefits that will be paid to the estate (but not any insurance or retirement benefits designated to be paid to some other person).

Do not include:

  • Cars, boats or mobile homes.
  • Real property outside of California.
  • Property held in trust, including a living trust.
  • Real or personal property that the person who died owned with someone else (joint tenancy).
  • Property (community, quasi-community, or separate) that passed directly to the surviving spouse or domestic partner.
  • Life insurance, death benefits or other assets not subject to probate that pass directly to the beneficiaries.
  • Unpaid salary or other compensation up to $5,000 owed to the person who died.
  • The debts or mortgages of the person who died. (You are not allowed to subtract the debts of the person who died.)
  • Bank accounts that are owned by multiple persons, including the person who died.

For a complete list, see California Probate Code section 13050 .

If the total value of these assets is $100,000 or less and 40 days have passed since the death, you can transfer personal property by writing an affidavit. There is a special form for this that you can get from most banks and lawyers. Your court’s self-help center may also have this form or a sample you can use to guide you.

Click for more information on the affidavit and for help preparing your own form.

If You Were Married to or Were a Registered Domestic Partner of the Person Who Died

You may be able to use a simple form, called a Spousal or Domestic Partner Property Petition (Form DE-221) to get a court order that says:

  • What your share of the community property is; and
  • What part of your deceased spouse or partner’s share of community and separate property belongs to you.

If the surviving spouse/partner is legally entitled to all of the property, a more complicated probate procedure may not be required. For example, a couple that was married for decades may only own “community property,” which belongs to the surviving spouse/partner and is confirmed by the court in the spousal property petition case.

If the Person Who Died Left MORE Than $100,000

If the dead person’s property is worth more than $100,000, none of the exceptions apply. You must go to court and start a probate case.

To do this, you must file a Petition for Probate (Form DE-111). This one form has different options, such as:

  • Petition for Probate of Will and for Letters Testamentary
  • Petition for Letters of Administration

Talk to a lawyer if you are not sure which option you should choose on this form. Click for help finding a lawyer.

Steps to Take If the Case Belongs in Probate Court

1.  The custodian of the will (the person who has the will at the time of the person’s death) MUST, within 30 days of the person’s death:

    • Take the original will to the probate court clerk’s office within 30 days. Contact your superior court courthouse to find out where the probate court clerk’s office is located.
    • Send a copy of the will to the executor (if the executor cannot be found, then the will can be sent to a person named in the will as a beneficiary).

If the custodian does not do these things, he or she can be sued for damages caused.

NOTE: If there is no will and a court case is needed, the court will appoint   an administrator to manage the estate during the probate process. The   person who wants to be the administrator must file a Petition for Letters of Administration (Form DE-111). The administrator usually is the spouse,  domestic partner, or close relative of the dead person.

2. Someone, called “the petitioner,” must start a case in court by filing a Petition for Probate (Form DE-111). The case must be filed in the county where the person who died lived (or if the person lived outside of California, in the California county where that person owned property).

The Petition for Probate has different options, like:

  • Petition for Probate of Will and for Letters Testamentary
  • Petition for Probate of Will and for Letters of Administration with Will Annexed
  • Petition for Letters of Administration

Note: To start a probate case you will need more forms than just the Petition for Probate form.  Talk to a lawyer for help with your case. Click for help finding a lawyer.

3.   After a probate case is filed:

  • The probate clerk sets a hearing date.
  • The petitioner must give notice of the hearing to anyone who may have the right to get some part of the estate, plus the surviving family members even if there is a will and they are not named in it. Any person who is interested in the court case may file a Request for Special Notice (Form DE-154), which means that they must receive a copy of paperwork filed by the person who is chosen to manage the estate.
  • The petitioner CANNOT mail the notice. It must be mailed by any other adult who is not a party to the case.
  • The petitioner must arrange for notice to be published in a newspaper of general circulation.
  • A court probate examiner reviews the case before the hearing to see if it was done correctly.
  • Once all the paperwork has been reviewed by the examiner and corrected, if necessary, the judge decides who to appoint to be in charge as the personal representative of the estate (also called the “administrator” or “executor”).
  • The personal representative gathers up the assets and prepares an Inventory and Appraisal (Form DE-160) to be filed.  The personal representative usually will also need to contact a probate referee to value the nonmonetary assets. Find the contact information for a probate feferee in your county . (Get more information on probate referees .)
  • The personal representative provides formal notice to creditors with the Notice of Administration to Creditors (Form DE-157) and pays the debts.
  • A final personal income tax return is prepared for the person who died.
  • The probate court figures out who gets what property.
  • A Report of Sale and Petition for Order Confirming Sale of Real Property (Form DE-260) is filed with the court so that sales of real property are confirmed by the court.
  • If the estate earned any money (such as interest or profit in a sale), the personal representative will have to submit a final estate tax return.
  • The personal representative reports to the court on how the estate was handled. This report is a final plan and accounting. The report is scheduled for hearing so the judge can review how the personal representative handled everything. The judge needs to be satisfied that everything has been properly taken care of.
  • After filing with the court any required final receipts to show that everyone received their property from the estate, the court discharges the personal representative from his or her duties.

Do They Really Like Me

GETTING A LOAN

Once you ve figured out what amount of loan you re able to comfortably afford, it s time to talk to a mortgage lender.

Check to see if the home you re considering purchasing is in a special bond assessment district. Some homes in California can be assessed yearly bond fees  for up to 30 years or more  for things like school improvements, levee protection, new roads, street lights and so on.

Home Buyer Hint

Loan Pre-Qualification
Getting pre-qualified for a loan is a pretty casual once-over of your financial situation. You provide a mortgage broker or lender with financial information, and they give you a non-binding letter indicating how much you could possibly borrow.

The lender does not verify any of the information you give them. This gives you a good  jumping off point in deciding the price range you can afford.

Loan Pre-Approval
Getting pre-approved for a loan is a much more rigorous process. A lender will verify all of the information you ve provided including income, debts, employment and cash on hand. The pre-approval process signifies to a seller that you are a very serious buyer. The lender provides you with certain guarantees that they are ready, willing and able to fund a loan.

Check with your real estate agent to determine if you should get pre-qualified or pre-approved for your loan prior to house shopping.

Q-A Series – FIRST STEPS

Q. WHAT STEPS NEED TO BE TAKEN TO SECURE A LOAN

The first step in securing a loan is to complete a loan application. To do so, you’ll need the following information.
– Pay stubs for the past 2-3 months
– W-2 forms for the past 2 years
– Information on long-term debts
– Recent bank statements
– tax returns for the past 2 years
– Proof of any other income
– Address and description of the property you wish to buy
– Sales contract

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes between 1-6 weeks.

Q. HOW DO I CHOOSE THE RIGHT LENDER FOR ME

Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction. Be sure to choose a company that gives helpful advice and that makes you feel comfortable. A lender that has the authority to approve and process your loan locally is preferable, since it will be easier for you to monitor the status of your application and ask questions. Plus, it’s beneficial when the lender knows home values and conditions in the local area. Do research and ask family, friends, and your real estate agent for recommendations.

Q. HOW ARE PRE-QUALIFYING AND PRE-APPROVAL DIFFERENT

Pre-qualification is an informal way to see how much you maybe able to borrow. You can be ‘pre-qualified’ over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender’s actual commitment to lend to you. It involves assembling the financial records mentioned in Question 47 (Without the property description and sales contract) and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

Q. HOW CAN I FIND OUT INFORMATION ABOUT MY CREDIT HISTORY

There are three major credit reporting companies: Equifax, Experian, and Trans Union. Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it’s important to verify its accuracy. Double check the “high credit limit,”‘total loan,” and ‘past due” columns. It’s a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports but some states permit citizens to acquire a free one. Contact the reporting companies at the numbers listed for more information.

CREDIT REPORTING COMPANIES
Company Name Phone Number
Experian 1-888-397-3742
Equifax 1-800-685-1111
Trans Union 1-800-916-8800

Q. WHAT IF I FIND A MISTAKE IN MY CREDIT HISTORY

Simple mistakes are easily corrected by writing to the reporting company, pointing out the error, and providing proof of the mistake. You can also request to have your own comments added to explain problems. For example, if you made a payment late due to illness, explain that for the record. Lenders are usually understanding about legitimate problems.

Q. WHAT IS A CREDIT BUREAU SCORE AND HOW DO LENDERS USE THEM

A credit bureau score is a number, based upon your credit history, that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. The better the score, the better your chances are of getting a loan. Ask your lender for details.

Q. HOW CAN I IMPROVE MY SCORE

There are no easy ways to improve your credit score, but you can work to keep it acceptable by maintaining a good credit history. This means paying your bills on time and not overextending yourself by buying more than you can afford.

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