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Check Your Credit Rating Before Getting a Mortgage

Check Your Credit Rating Before Getting a Mortgage

Tara Lynn Wagner said that it is very essential for you to determine your credit score before securing a mortgage loan if you want to avoid paying more money.

Most people especially women know their Social Security number, their weight but when you ask them about their credit scores, they are not aware of it.

CEO Amanda Steinberg, founder of Dailyworth.com, said that loans are needed to buy a vehicle or a house because it is quite impossible to obtain them in cash. But in order to get the best term, it is important that consumers should know their credit scores before securing a mortgage. She said that it might cost you to pay tens of thousands dollars more if you do not check your credit rating before securing a mortgage.

To illustrate her point she cited this example. There were two women who wanted to secure a mortgage amounting to $200,000. The first woman was Susie. Susie’s credit score was 740 points. Her high rating qualified Susie to get a 30-year mortgage at 3.9 % interest. She was paying $953 per month. The second woman was Jane. Jane had a credit score of 640 points. She was also granted a 30-year mortgage at 4.75 % and paid $1,043 monthly. The total difference in the payments of two women for 30 years was more or less $35,000.  This is quite big, says Steinberg. The big difference was the result of the credit scores of Susie and Jane.

There are three steps to take before taking a mortgage. First is to check your credit score. Then, if it is excellent maintain it. Finally, if it is not good, do something to improve it.

Steinberg says that aside from paying their dues on time, the consumers have to control their spending habits because the credit companies are checking their spending to determine their credit scores.

She further added that consumers have to spend only about 20% of the available credit or they should not go beyond 90% of the available credit.

When is the Best Time to Buy a Home and Are Interest Rates Best Now?

Take Advantage of Low FHA Mortgage Rates

In the past week, mortgage rates reached another low record. This is one of the news regarding the terrible economic condition. The current rate on FHA mortgage declined to 3.990% with an annual percentage rate of 5.318%. This is once again another big chance for individuals and families who have existing FHA mortgages and for those who are thinking of getting an FHA mortgage.

If you are one of those with an FHA mortgage in your house, you can take full advantage of the streamline refinance program for your mortgage. This program will help you save extra money from your mortgage payments. Oftentimes, FHA streamline refinances do not ask for a new appraisal that is why the process takes faster than a usual refinance program. If you are paying your mortgage at a rate of at least 4.5%, you can inquire from different mortgage servicers to know the amount of savings you can have when you decide to refinance.

On the other hand, if you do not yet own a home as of this time but are thinking of purchasing one, now may be the best time to go for it. Even without enough funds to put in a down payment, you might be able to obtain a mortgage via the FHA. This type of mortgage may only ask you to pay at least 3.5% of your dream home’s purchase price as your minimum down payment. Because of this, FHA mortgage is popular to many homebuyers. There are also many mortgage servicers these days that are willing to assist you in getting an FHA mortgage especially if you have a good credit standing.

The housing market is offering the best mortgage rates so far. Although this may not be a good sign for the economy, it can benefit existing homeowners and those who have been planning to purchase their own homes but are waiting for the most affordable rates.

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Do I Have to Have a 20% Down Payment for a Home Mortgage Loan?

Home mortgages didn’t used to have such a high down payment. Back in the late 2000′s we say the heyday of the 0% down loan. It was not uncommon for people to just put down 2-5%.

But, then all of a sudden things changed. And if you’ve been around in the last 5 years, it’s easy to see why. Does the term Mortgage meltdown ring any bells?

Well, since the subprime loan debacle, and all of the bad loans out there, lending standards have gotten tighter… should I go as far as say waaaay tighter.

I’ve heard of 40% downpayment with a minimum 750 credit score to get the best interest rates.

For the average, however… I’m seeing a 20% downpayment needed.

The Effects of a 20% down payment Requirement from Potential Homebuyers

Future homebuyers may be required to put a 20% down payment according to the newly proposed rules. The purpose of this is to prevent another possible financial breakdown.

The rules that are being proposed are ways to put into effect the Dodd-Frank Wall Street Reform and Consumer Protection Act launched in the U.S Congress in the past year. One of the many rules are to ask for a 20% down payment in order to ensure that the home loans being sold by the banks in the secondary market are safe, said Robert Fletcher, the Ohio Association of Realtor’s executive officer.

Fletcher said that implementing the rule on the 20% down payment will disqualify 60% of potential homebuyers. Since the housing market plays a main role in the economy, removing buyers considered as low risk from the housing market will be a big hindrance to the recovery of the economy, added Fletcher.

In Greater Cincinnati, the average price of houses is at $151,080. With the proposed rules, this will require about $30,216 down payment excluding closing costs. This amount is more than the average price of most brand new cars that consumers can afford.

The purpose of the risk retention requirements like the 20% down payment is to address the challenges in the residential, commercial and loan markets. It seeks to provide a solution to their problems by asking the organizations that are selling securities to maintain an economic interest in the credit risks of their combined and sold assets, according to the rules proposed by the regulating agencies.

Aside from shooing away potential buyers to the housing market, another effect of a 20% down payment requirement on home purchases is that more and more people could not afford to buy a home. It may also cause banks to become less willing to let the consumers take a loan for a more affordable cost. Overall, it will reduce the housing demand, cut house prices and eventually hurt the industry of home building.

On top of the down payment requirement, the proposed rule may also ask the homebuyer to provide a credit history, a proof of income and a documentation showing that the down payment source is valid.

Based on this, you can expect that lending standards are going to remain high for quite some time. If you are looking to buy a house, then you are going to need to make sure you have money to put down, and you will need the credit score to support your purchase.

Could you afford to pay a 10-20% down payment on your home? from CRA NC on Vimeo.

Save More Money with the Best Home Mortgage

Save More Money with the Best Home Mortgage

Do you wish to find the most effective home mortgages? There’s no need to cover high prices, and saving is seriously possible. In this article, you’ll shortly discover the necessary details and methods to find these kinds of big financial savings. Let’s start, as we save big. You can find several different home mortgage lenders available, and they are able to each make a huge distinction. Several charge high prices, and several low costs.

Remember that it’s the interest rate that you are billed, that’s the major factor, but it isn’t the only factor, simply because you also have another factors, such as the hidden expenses that you are charged, that you need to remember, and ensure which you aren’t billed for.

These hidden costs generally are more greater and much more expensive whenever you find the cheapest interest charges. Thus, the important thing here is to uncover an equilibrium of both, and this may result in acquiring the best home mortgages, and saving in the method.

Now, to start this, there’s one thing that you want to remember, and that is that if you wish to get an excellent option, then study is going to be needed. And the more efficient and comprehensive your research, the more likely it is which you will find the best provides and help save within the method.

You will find a number of issues which you can do, and the first would be to get a fantastic array of loan companies. This could be done through a variety of strategies, such as in classifieds where they promote real estate for sale, billboards around the town, television, radio, as well as online. With numerous places, you can make sure to find an incredible choice, and save in the process. So, spend the time, and you are able to find the best!

Getting a Home Loan Regardless of Your Credit Score

Getting a Home Loan Regardless of Your Credit Score

There is nothing more serious than having bad credit and getting a house loan. Why? Because many lenders are prejudice because of low credit score and in a way they need to. Your credit could be seen as a good friend or a worst enemy. It could help you and get you what you want, or it can hurt you and keep you from what you want. When it comes to getting a home loan for people with bad credit there’s indeed hope out there.

Before you will begin to start the application procedure work on your credit standing. You are able to do that by getting an unsecured credit card from a financial institution. Put an account balance of no more than $100 – $200 30 days on it for items which you need like gas or groceries, then pay it back in the end of each month. This can slowly increase your credit history in time.

The next thing you should do is save your cash. Numerous loan companies try to find loan job seekers to repay a payment in advance of about 10% or more to let them know that you are serious about dealing with the financing. Try to cut back on some splendid luxuries for some time and save as much cash as you can for a good down payment.

Finally, when everything else fails depend on a friend or family members that has great credit rating. Maybe they are going to be generous enough to sign the financial loan with you as a co-signer. Their excellent credit might be enough to persuade the provider to give you the loan, given that they’re responsible for it too.

Follow these simple suggestions to obtain the process started for getting the home loan which you want. There are several choices available for people who want a loan and have poor credit. So do your study and take a plan of action to get the house loan you really need.

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