Wednesday, October 7, 2015

Catalog shopping credit lines

Besides the usual lines of credit one can typically obtain there is also a not so well known credit type and that is one used to shop via a mail catalog.  Most likely not going to be around much longer since you can purchase almost anything online these days but still it exists.  This type of credit account is a line of credit that can only be used to purchase metchandise from a specific retailers catalog.  Catalog shopping credit accounts are probably the least desirable type of credit account one can obtain because they tend to have higher than average interest rates and fees. In addition catalog shopping credit accounts can only be used to purchase merchandise that has a higher than average markup as well.  The most well known company still offering these types of credit accounts is Fingerhut.

Tuesday, October 6, 2015

Homepath Program

The Homepath Program is provided by Fanni Mae and offers special financing to potential home buyers on foreclosed properties owned by Fannie Mae and along with special discounts home buyers receive other exclusive benefits.

Among these benefits is the Fannie Mae Firstlook program that give buyers a 20 day period to consider properties prior to them being marketed to investors.  This program is offered to owner occupant buyers and gives them the opportunity to make offers without investor competition.

Another special benefit for Homepath buyers is the ability to utilize local housing assistance programs such as HUD to fund a down payment or to put towards the purchase of a property which is not typically allowed by banks when seeking a conventional mortgage.  With a Fannie Mae Homepath loan you can request up to 3% closing cost assistance towards your purchase.

In addition Homepath also offers investors special financing programs for the purchase of multiple properties.

So whether your an investor or even a first time home buyer the Fannie Mae Homepath program is definitely something to heavily consider.

Sunday, October 4, 2015

Improve Your Credit Score Before Buying a Home

    Several months before you begin to look for a home, you should take steps to get “credit approved” for your loan. Start by making a list of all your existing loans and credit cards, with the company names, account numbers and monthly payment amounts. This will help you to analyze the information shown on your credit report. Include all closed loans and credit cards if these records are available.

1) Get a Financial Check-Up

    Make an appointment with a good mortgage lender, and request a full credit approval. As a part of the approval process, your credit report will be ordered. It will include data from the three main credit reporting agencies – Equifax, Experian, and Trans Union. The report will show three credit scores – one from each agency. The interest rate and type of loan available to you is related to your credit score.

    The assistance of a mortgage professional to help you to understand your credit report and offer suggestions on how to improve your score is invaluable. For the average person, interpreting a credit report and dealing with errors is a daunting task. Credit reports are filled with frustrating jargon and codes. They are not written for the general public to read. Even more intimidating is the task of communicating with credit agencies to dispute or correct information.

2) Correct Mistakes

    Credit reporting agencies often have mistakes in their data. The information in your credit file is input by computers. A computer weighs your data using complicated mathematical formulas to arrive at a credit score.

    Nearly everyone has paid bills late for one reason or another. Perhaps a bill was sent to a wrong address, or you have had a dispute with a vendor. It is likely that you have some issues on your report that should be disputed or corrected. Each of the websites of the three main agencies has a dispute resolution page. Feel free to use it.

3) Deal With Real Credit Issues

    You may have had serious credit problems at some point in the past. Reviewing this may be emotionally draining, and will bring up the underlying situation that caused the credit problems. Get advice on how long the issues will remain on your report, and how to re- build your credit worthiness.

    Or, you may have a persistent habit of overspending. In this case, you should talk with a financial advisor or personal counselor to help you work out of debt, and establish better habits. The National Foundation for Credit Counseling offers low cost assistance for serious credit problems. If you place yourself under their supervision to handle your debts, you will not be able to obtain new credit during the work-out period – which may be years. Before doing that, ask a mortgage lender or financial advisor if there is a way to redeem your credit without their supervision.

4) Check Your Credit File

    A law, passed in 2005, requires the three main credit agencies to provide a free credit file disclosure each year. It has been suggested that you could order a file from the first agency in January, one from the second in May and one from the third in September. The central site where your file can be ordered is annual credit report dot com. The purpose of this law seems to be to help people find out if they are a victim of identity theft. This enables you to monitor your file for any new credit that did not come from you.

    If you take advantage of the free credit file reports, you should check them for mistakes. Use the credit report that you reviewed with your mortgage lender to compare with the data in your credit file. Keep in mind that the free credit file disclosure is not a credit report. It does not include a credit score.

5) Understand Credit Scores

Less than 620 – Poor

620-680 – Average – You may need to put more cash down on your loan.

680-720 – Good

720 – 800 – Excellent

800-850 – Seldom seen

6) Play by the Rules

    The information in your credit file is scored by these factors:

35% – Payment history – Paying bills on time is very important. Today many people use auto draft or pre-written checks through online banking to pay bills. These help to prevent late payments. If you want a good credit score, do not pay late!

30% – The relationship between your available credit versus how much you have used is an important factor in your score. If you are over 50% drawn against your available credit, this will count against you. For this reason, it helps to keep old credit card accounts open, even though you do not use them. They build up the total amount of credit available to you, relative to what you have charged.

15% – The length of credit history on each loan has an effect on your score. A more seasoned loan is scored higher. For this reason it is not a good idea to open credit cards offering low initial rates, then close them after a few months and open new credit cards.

10% – The number of inquiries made on your credit report affects your score. Each time you open a credit card or new loan, your credit information is pulled. Keep these to a minimum. A recent law has made it possible for people shopping for homes or autos to have multiple inquiries, from the same industry (mortgage or auto), done over a 30 day period without penalty. However, to be on the safe side, do not allow your credit report to be pulled unless absolutely necessary.

10% – The types of credit used may hurt your score. Loans from finance companies, signature loans, furniture loans and some retail store loans are considered a poor judgment because of their high rates, and may count against you.

7) Improve Your Credit Score

    It is easy and necessary to borrow money. We customarily make everyday purchases using credit cards, and set up loans for homes, cars and other purchases. Your credit score is especially important in the purchase of your home. It will affect the type of loan available, down payment required, and interest rate charged. A low score can cost you thousands of dollars in additional interest over the years. Even insurance companies factor your credit score into their decisions. More than ever, you need a good credit score, or you will pay the price.

    Finance providers, rental agencies, car dealers, insurance companies and credit card companies are not going to help you improve your credit score. In fact, they have an economic interest in charging you a higher rate. It is up to you to be proactive about understanding and improving your own credit score. A good time to start is when you begin the mortgage approval process for a home purchase. It is a good habit to have.

Mortgage Interest Rate Analysis

    In the very beginning of the month of August the mortgage interest rates remained quite stable. Except a few mortgage program interest rates most of then remained unchanged to what it was in the last week of July. Interest rates of mortgage programs like 10-Year Treasury and 30-Year Treasury were down by 0.06% and 0.04% respectively. And the interest rate of programs like USD LIBOR 6-month and USD LIBOR 1 Year were up by very nominal 0.015% and 0.022%. Other than these, the interest rates of 30 year fixed average, 15 year fixed average, 5/1 ARM average, 3/1 ARM average and some other programs remained unchanged.

    On the third day of the month most of the mortgage interest rates fell down by units in decimal due to change in market conditions. But the interest of short-term mortgage loans like USD LIBOR 6-month and 1-year were raised up to 5.318% and 5.230%.

    During the first 15 days of the month the mortgage interest rate fluctuated a lot. Though the average fluctuation rate was very low but it kept on fluctuating up and down. On most of the occasions the short-term loan interests got affected and kept changing everyday.

    Analysts believe that the decline in the mortgage industry is due to the higher unemployment in the recent times. Some believe that the recent drastic drop in mortgage market is due to the tighter lending standards and cooling home prices. This fall in the mortgage interest rate has in fact started to affect the sub-prime lending too.

    Due to the fall in mortgage interest rates the U.S. mortgage applications rose for the second straight week. Experts believe that the recent disturbance in the mortgage market is the reason behind the rising applications. The housing sector and the homebuilders market are down and so are the financial companies including mortgage companies. Last week, the fall in the mortgage market spread to the financial markets with a rapid speed and provoked the fear that tighter credit will have a bigger impact on consumers, markets and the economy.

    It has been forecasted that the interest rates for the 80% of homeowners and buyers that qualify for A-paper mortgages will probably remain stable or slightly increase in the near future. Those who are with sub-prime credit or don’t have proper documents to prove income, may face difficulty in getting the loans or they might be charged with higher interest rates or huge down payment.

Zero Down Mortgage Loans

    Zero Down Mortgage Loans – Understanding No Money Down Loans

    In many housing markets across the country, the increase in home prices does not match the average household income. Hence, many people are unable to save money for a down payment. Ideally, mortgage companies prefer applicants to have a down payment of at least 5%, in addition to paying closing costs. Unfortunately, this is an unrealistic expectation. Thus, many homebuyers are taking advantage of zero down mortgage loans.

How Do Zero Down Loans Works?

    Fortunately, many mortgage companies recognize how difficult it is to save for a down payment. Thus, some lenders have created special loan programs that make it possible to buy a home with little out-of-pocket expense. Ordinarily, if you had a down payment for a home, you would obtain better rates. However, because of low mortgage rates, you do not need a down payment to secure a good rate.

    There are many options for a zero down home loan. For starters, some mortgage lenders offer an 80/20 loan. This involves offering a mortgage for 80% of the asking price, and a 20% home equity loan for the remaining balance. This option is very useful; moreover, homebuyers avoid paying private mortgage insurance.

    Additionally, homebuyers may obtain a mortgage loan for 103% of the asking price. This is beneficial because it allows new homebuyers to afford down payment and a portion of the closing fees.

    How to Find a No Money Down Mortgage Loan?

    If you are hoping to buy a home with zero down, contact a mortgage broker. There are various loan programs that offer zero down loan options. However, you must be willing to look for them. If using a mortgage broker, the company can help you find a lender.

    Brokers have access to loans offered by private lenders, government programs, sub prime lenders, etc. Meeting the qualification for a zero down mortgage will vary according to lenders. Some lenders require good credit, no bankruptcies, etc. Meanwhile, other lenders are eager to offer no money down loans to people with less than perfect credit. Working with a mortgage broker can make your dreams of homeownership a reality.

Cash Out Refinance

     If you have owned your home for a period of time long enough to obtain some equity through your monthly mortgage payments and appreciation, you may be considering borrowing off the equity you have established in your home.

     This can be known as cash out refinancing, where you basically refinance your home and get some cash back in the way of a lump sum at the closing table.

     Borrowing off of the equity in your home is done by many people and used for many different things.

     Such as, home improvement projects, new cars, college expenses, family vacations, etc.

     Of course, just like everything else in life, the process isnt one of the easiest of things to do in the world. But if you take your time, do your homework, and find the right lender and loan officer, the task in front of you will be a lot less painful.

     The mortgage industry is a very competitive one, so be sure to shop around and look for the deal that is best for you.

     If you are not interested in doing the shopping around yourself, consider finding a mortgage broker to do the shopping for you.

     A mortgage broker is a person who works as a liaison between the customer and the lender. It is the job of the mortgage broker to shop lenders for the consumer to find the mortgage program that best fits their needs and budget.

     Allow for a few brokers to assess your situation, than base your decision on the one that best fits your needs and budget.

     Keep in mind, most cash out refinances are tax deductible, so be sure to run it by your accountant at tax time.
Negative items on your credit report can have a significant impact on your credit score and ability to obtain credit. Therefore is important for one to understand what they can do to alter or even eliminate those nasty negatives. Some states have their own laws governing the length of time a negative mark will be visible when a creditor or employer pulls your credit report. With that said although the nasty negatives may presently be hindering your ability to borrow at least it wont last forever. The typical timeframes are as follows.

Seven years for personal loans, credit cards, judgements, unpaid child support and collection accounts. Chapter 7 bankruptcy will remain for a period of ten years. Charged off accounts will remain for seven years plus 180 days. The timer begin the first time your account is reported late or unpaid. Collection accounts are considered still to be the original debt and are removed according to the original debts first date of delinquency.

Besides the obvious delinquent credit accounts one may be aware there may be negative information a person is unaware of either from identity fraud, inaccurate reporting or reporting of an account that isnt yours and those will need to be disputed in writing to each of the three consumer credit bureaus.