11
Oct
By Fred Gruber
0 Comments
Homebuyer Tips

Worried about Your FICO Score? 4 Easy Strategies to Fix It Up

If you’re worried about your bad credit, you’ll want to do everything in your power to improve your rating as quickly as possible – especially if you have a major purchase coming up. Improving your credit rating can give you access to better interest rates on mortgages or even help you get that job you’re after.

IMPORTANT! If you are currently involved in a home loan transaction, speak with your trusted mortgage lender before taking any action regarding your credit!

So how can you boost your FICO score quickly and easily? Here’s what you need to know.

Get Your Credit Report And Dispute Any Errors
Credit reporting agencies don’t always keep 100% perfect records, and there’s a good chance that your credit report contains at least one error. One recent FTC study found that 25% of consumers have an error on their credit report and that in 5% of cases, the errors were actually severe enough to impact the loan terms that borrowers were able to negotiate.

You can get your annual credit report from all three credit reporting agencies for free. Carefully read over it. If you see any errors – if your name is misspelled, if they have the wrong address on file, or if there are late or unpaid charges that you didn’t make – you can dispute the items in question.

Still Overdue? Negotiate Payment Terms With Your Creditors
If you’re overdue on a payment, it will weigh heavily on your credit score. As your payment history makes up a full 35% of your FICO score, this is one area where you’ll want to invest a great deal of time and effort.

Contact any creditors you owe money to and ask if you can negotiate your bill. The ideal outcome for you is to have the creditor report your debt as paid in full, so see if you can secure that promise in writing in exchange for an accelerated payment schedule.

Try Maintaining A Lower Utilization Ratio
Your utilization ratio refers to the amount of credit you use at any given time. If this number goes beyond 30 percent, you’ll start to see your credit score drop. Ideally, you should aim for a utilization ratio below 10 percent – this will prove to your lender that you can responsibly pay for the credit you use.

Have Recurring Bills? Automate Your Payments
Automating your monthly payments can be a great way to boost your credit score. Whether it’s your mortgage, your credit card, or your student loan, a pre-authorized monthly payment will ensure that everything gets paid on time and give you a great credit history.

Your FICO score is a number that will determine your eligibility for mortgages and other loans. These are general tips to help with your credit score and improve the overall reporting of your credit.

Call your local mortgage professional to learn about what kind of a mortgage your credit score can afford you.

27
May
By First Rate Financial Group
Mortgage Tips

Whatever You Do, Don’t Make These Common Mortgage Mistakes

Whatever You Do, Don't Make These Common Mortgage MistakesAre you applying for a mortgage on your home? Keep in mind that a mortgage is a major financial decision and choosing one will have a significant impact on the rest of your life.

Many people go into this decision without understanding all of the essential mortgage information they need to know, which means that they are likely to make poor choices that will result in paying much more than they need to.

If you want to save yourself from throwing away your hard earned money, here are a few common mistakes to avoid:

Trying To Bottom Out the Market

Many people will wait too long to make a decision to lock in their mortgage rate, trying to wait until they think that the rates have hit bottom. However, unfortunately most of the time this leads them to wait too long and end up with a higher interest rate.

If you are waiting things out, keep a very close eye on the economic indicators. Your daily newspaper will be a good source of information about the fluctuations of interest rates.

Forgetting About Closing Costs

In addition to saving up a down payment for your mortgage, don’t forget to factor in the closing costs. These can range from two percent all the way up to six percent of the value of your home. Make sure that you have budgeted for this in advance, so that these fees don’t catch you by surprise.

Not Considering All Loan Options

There are many people out there who haven’t considered certain loan products, such as an adjustable rate mortgage, because they just don’t understand how they work.

However, if you do this you might be missing out on an option that would really work well for you. Make sure you do your research and gain an understanding of the loan options available to you.

Looking At Just The Mortgage Rate

Remember that the mortgage interest rate is only one factor that you should consider when choosing a mortgage. Don’t forget to also consider the time frame of the mortgage, the restrictions on lump sum payments and any other important factors.

These are just a few of the common mistakes people make when choosing a mortgage, so make sure to avoid falling into these traps yourself.

For more information about home buying and mortgages, you can call your trusted mortgage professional. 

20
Jan
By First Rate Financial Group
Home Mortgage Tips

What Financial Preparations Should I Make Before Applying For A Mortgage?

What Financial Preparations Should I Make Before Applying For A Mortgage?Getting a mortgage isn’t an easy thing to do. Before a lender will put down tens of hundreds of thousands of dollars, it wants to know that the borrower can handle the loan so that it will get paid back. to this end, there are three things that a potential homebuyer can do to prepare for the mortgage approval process.

Managing Debts

For many homebuyers, managing their credit score is the biggest challenge. Mortgage lenders like buyers with strong credit. While getting strong credit usually isn’t something that can be done overnight, paying bills on time, all of the time can help to build a positive profile.

Using as little credit as possible is also helpful, since high utilization of existing credit lines can harm a borrower’s score. Having less debt can also reduce monthly payments, making it easier to qualify for a larger mortgage.

Managing Income

Lenders look for two things when it comes to a borrower’s income:

  • Stable incomes are preferred, so being able to prove the income with a W-2 form or other documentation is usually required. Self-employed people will typically need to prove their income with their tax returns, so taking high write-offs can make it harder to qualify.
  • A borrower’s income should be significantly higher than his total monthly debt payments. Lenders divide a borrower’s monthly payments including their proposed mortgage into the gross monthly income. If the payments exceed a set percentage, the lender will shrink the mortgage until it considers the payment affordable.

Managing Paperwork

To qualify for a mortgage, borrowers typically need to submit a comprehensive file of supporting documentation. This can include tax returns, pay stubs and bank and investment account statements.

Since lenders frequently want some historical data, it can be a good idea for people considering applying for a mortgage to start collecting documentation months before they actually begin the mortgage application process. That way, they will have everything the lender wants and when the lender needs it.