How your Credit Score Affect your Mortgage
[28/06/2009 8:45 pm]

Your credit history has a giant impact on the mortgage rates that you get and the terms that it will have. Lenders will go over your entire history with a fine-toothed comb. They will focus on your credit report, and your credit score. Your credit report is where all of the details concerning how you handle credit is kept.

This report will show any debts that you have had in the past years and how, when and if you have paid them according to schedule on time every month. This report will also show if you have ever filed for bankruptcy. Your credit score is derived from the information on your credit report. The lender will have a formula that they use in order to find your exact score. Some lenders use a slightly different formula for their own purposes. Your credit score will tell the lender whether or not they should trust you with a loan of any size. These scores range from around 300 to 900 and most people fall somewhere in the middle of these two numbers.

Your credit score is come to by putting together several mortgage calculator different factors. The lender will look at how well you have been at paying your debts on time. If you have a habit of paying your bills late each month this will hurt your credit score tremendously and the worse your credit score is the worse the terms of your loan will be.

If you have had credit for a long time this looks good on your credit report and will help your credit score, assuming of course that you have been responsible with your credit. And the more available credit that you have the better you will look to lenders. If you have maxed out all of your credit they might think that you are too close to being unable to pay off your debts therefore less likely to be able to pay them back according to schedule.

Before you apply for a mortgage or any other type of loan you should take some time to go over your credit report. The lender is going to and if you can get to it first and then do some damage control. Sometimes credit reports have errors on them and if your does there are some things that you can do to fix this problem. You do need to take care of this though because your credit report is key to you getting approved for a good mortgage loan.

You will need to get a copy of your credit report from all three of the big credit bureaus. They d sometimes differ somewhat and you need to make all of these reports look fabulous.

When you are going over your credit report you need to look for any inconsistencies in the payment dates or amounts. If you have made any late payments or missed any payments recently write them down as well as an explanation because you will probably need this for the lender. And the number one way to get your credit report and your credit score in better shape is to start paying all of your bills on time each and every month.

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   Insulate your home of this mini windfall while it lasts
[03/07/2009 1:07 am]

Recent economic issues have forced mortgage rates to decline, therefore buying a home is a very attractive option for those who can take advantage of the low rates. Locking in a fixed rate means that your mortgage payment will not increase for the life of the loan. Almost 75 percent of all home mortgages are fixed interest rate mortgages.

History

  • 1. Since 1983, 15-year fixed rate mortgages were highest in July of 1984 (14.75 percent) and lowest in June of 2003 (4.84 percent). Currently, the mortgage industry is backing a plan to lower the 30-year mortgage to 4.5 percent as reported by the Associated Press and MSNBC.com. This is in response to the crisis presently impacting the housing market.

    Significance

  • 2. Not everyone can qualify for a low fixed mortgage rate. Consumers who do qualify have strong credit scores and cash for down payments. Homeowners who would like to refinance may also take advantage of low fixed mortgage rates. Having equity in their home helps, but they still need a strong credit score to qualify. The lowest fixed mortgage rates are available to consumers with a credit score of 740 or higher and a 25 percent down payment.

    Types

  • 3. Most low rate mortgages are for 30 years, but a 15-year fixed mortgage rate is typically lower than one for 20 or 30 years. Borrowers would have to qualify based on their credit score, down payment amount and income requirements. The shorter the loan, the higher the payment, no matter how low your mortgage rates may be.

    Considerations

  • 4. Fixed rate mortgages offer higher interest rates than adjustable rate mortgages, or ARMs, as the lenders feel the risk is greater. They are also easier to understand than adjustable rates which are tied to an index rate and move accordingly. Fixed rate mortgages offer less flexibility than ARMs and typically have higher initial monthly payments.

    Benefits

  • 5. Having a low fixed mortgage rate enables you to budget your expenses without any surprises from your mortgage company. Fixed mortgages do not increase over time like adjustable rate mortgages. Having a consistent monthly payment offers more security, and fixed rate mortgages are commonly used by first-time home buyers. Obtaining a low fixed rate mortgage is a practical way to buy a home if you can meet the rigid lender requirements.

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    Take advantage of low mortgage costs - invest in your home

    Running a home is an expensive business, racking up and average £11,455 a year, or so says Sainsbury’s Home Insurance.

    However, the research had one small piece of good news, while other costs are shooting up, the mortgage is keeping things to a dull roar, because it has fallen quite a bit in the last couple of years.

    And since these payments account for a whopping 60% of all household expenditure, that reduces the overall cost of running a home significantly. So how can you best take advantage of this mini windfall while it lasts? Sadly, not all costs are going the way of the mortgage, so it’s probably best not to blow the household budget on a new kitchen just yet: energy prices, in particular are alarmingly high at the moment, with gas now costing an estimated 26 per cent more in just two years and electricity 14.7 per cent. However, with careful use and rationing of energy, even this increase can be put in perspective. Looking back to 2004/05, the total cost of running a home rose by 12%, so even with rampaging energy costs we are still in a far better position now. This makes it and ideal time to address any home improvement tasks and repairs you’ve been putting off, all of which will add value to your home when you come to sell. A few of these could include:

    Insulate your home

    If you’ve not already done it, this should be the first step in investing in your home, both to help lower those energy costs and to help the environment by reducing C02 emissions. The task may be cheaper than you might think, as every household in the UK is now eligible for at least 50 per cent off loft and cavity wall insulation, thanks to a government green initiative. Direct Gov has some useful info on your rights, and where to apply for financial assistance.

    Change your energy supplier

    There are so many energy tariffs to choose from nowadays that if you’ve not recently switched, the odds are you could be getting a better deal. There’s some excellent advice here on how to go about it with minimal cost and hassle.

    Repair and renovate

    Once you’ve worked out how much you’re likely to save from your reduced mortgage payments, work out a budget to go into your home improvement pot. Then write a list of everything that’s in need of fixing, sprucing up or replacing around the house and start researching the cheapest options. You might be pleasantly surprised at what you can now afford.

    Adv. – Despite rising interest rates, now is still a good time to refinance your home. If your current mortgage offers unfavorable terms, why not explore refinancing while rates remain below 6%? Visit LowRateMortgageToday.com to find the best mortgage opportunities out there.

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