Decoded for consumers: truth about credit scores Houston Chronicle
By now, you're probably aware of the wide use of credit scores, and how this three-digit number can determine whether you get credit and under what terms. But there is a lot of misinformation about scores, too, and what you don't know can hurt you.
You could end up unnecessarily paying interest on credit cards or lowering your score in attempts to improve it.
Here are some of the myths:
Myth: You must carry a credit card balance for a good score .
This fallacy is prevalent. Fenona Blackett of Glen Burnie, Md., heard it from a mortgage broker. Blackett, a medical accountant, stopped using credit cards about five years ago, partly because she didn't like paying interest.
"You don't have that debt. It's like a weight lifted off your shoulders," she says about being card-free.
But when she was in the market for a house about two years ago, a mortgage broker advised her to get a credit card and carry a balance from month to month to boost her score. Blackett did. She got the house, but also needlessly paid interest on the card for months.
Getting The Best Mortgage When Buying A House
by Peter Daas
Getting a mortgage is a big financial decision. Getting a home goes hand in hand with this decision. A mortgage takes a while to pay off, so you need to think long and hard about the kind of mortgage you will choose for your home purchase.
A mortgage isn’t only a long term decision, it is also not an easy decision. There are complex factors to decide on. Things such as type of mortgage, interest rates, with or without balloon payments… these are all factors that come into play. Even seemingly small differences can end up saving you thousands of dollars or costing you thousands of dollars in unnecessary payments.
Be sure to always consult an expert before deciding on a kind of mortgage. As a consumer, you handle mortgages every couple of years, maybe less. A mortgage expert has studied mortgages and handles mortgages day in and day out. He can tell you what the market has to offer for you, how to get the lowest rate and how to choose the best option in your situation. If you pick someone you can trust, he will also protect you against the mistake of taking on a loan that you can not afford.
A mortgage provider looks at roughly three things when looking over your application. The income compared to the debt, your proposed down payment and your current credit rating, judging from your credit report. You can find a lot of information online and offline about all three of these factors. Credit scores can be improved significantly if it’s too low for your application and every day there are more possibilities to include the down payment in your mortgage or buy with little money down.
Another tip is to always, always, always check your credit rapport when applying for a mortgage. Sometimes you find a mistake on your credit report. If you don’t notice it and correct it when you see it, such a little flaw can end up costing you thousands of dollars that you could have saved in interest and added fees. Just take the time to get your credit report. When you find a mistake, the time taken to do the research is a very small price to pay in exchange for the money saved. Be prepared and take the time to research mortgages. This way, you can be sure you are making the right mortgage decision.
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What is the best mortgage advertisment you have seen?
I am a Mortgage Broker looking for some good ideas for advertising. What is the funiest or best mortgage ad anyone has seen? Any loan officers out there with any creative new ideas?
If you are looking to advertise mortgage services online, try Regional Mortgages
http://www.regionalmortgages.com
Its an informational website that has a directory of local mortgage professionals. They allow for one mortgage rep per zip code.
If you live outside of Texas, I would entertain looking at mirroring his concept. If executed correctly, consumers will see less of the cornball and more of ther offerings as they have successfully done here. Of course the key ingredient that 99% of companies resist is the fact that guys like Texas Lending spend at a much higher clip than the standard broker. Average ad expenditures against revenue typically are 11%. These guys have to be pushing pretty close to 18% in order to break through the clutter in a large market like Dallas/Ft Worth and to keep the accelerator all the way down. If you can spend enough, and you have the right creative, you'll win. Most places decide they dont want to spend the right amount to break through and they never win.
What is the best mortgage to go for in London banks?
I am a first time house buyer and need to find a mortgage wihtin the next 16 weeks. I would like to know what banks are doing the best mortgage deals at the moment, can anyone help?
The woolwich life time tracker is a good one but go on moneysupermarket.com and they will give you the best deals on the market
Do a mortgage search on google. It will come back with a comparable table.
I would suggest that you get an idea from moneysupermarket.com, and then get yourself an independent adviser.
Are you aware that the banks you get in London also appear in other towns and cities over the UK?
Who is best to get a home mortgage through?
Would it be best to go through banks, credit unions or other lenders that mortgage brokers might suggest? What are competible and reasonable mortgage rates? Is 6.25% legit for an first offer or should I definitely keep looking?
As of today's rates, depending on where you're buying and how much you're financing, 6.25% is dead-on for the 30 year fixed mortgages today. Assuming no more than 1% origination fee and other costs being reasonable.
I never discourage my clients from getting other offers. You should always talk to a couple places, I'd recommend 1-2 brokers, 1-2 banks, and try the credit union too. In my experience, credit unions have decent rates and low costs. Banks have higher rates and average costs. Brokers will come in on both sides, depending on who you find. Theoretically, a broker should be able to get you the best deal. In practice, not always the case.
But it doesn't sound at all like you're getting screwed or taken advantage of, again assuming that's 6.25% 30 year fixed with reasonable costs.
Your interest rate is based on your credit score and how well you have paid your consumer debt over time.
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home.
In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
I this has been of some use to you, good luck
"FIGHT ON"
and it depends on ur credit score, and ur debt to income ratio and ur job for a interest rate. if u have low debt, a high credit score, you can get 6%. if u buy points you can get 5%.
if u have a high credit score, you dont need to state ur income.
Mortgage Brokers can be good, but be careful and make sure you find out what their fees are and how they are being paid.
If you are new to mortgages, make sure you are aware that loads of banks and lenders make mistakes in their ongoing interest calculations. We all spend so much time looking for the best rate up front, and then just forget about our mortgages once we sign up.
You can use a spreadsheet to track your mortgage and check your statements, or download one of the better mortgagr software packages out there. It could save you thousands.
Sometimes a broker will get a better payment, sometimes a banker. Shop all types of lenders and see which comes out best for you.
While everyone has access to the same programs, there is something called a yield spread that nobody is going to tell you about. Basically, the yield spread is how much the loan originator makes on the back end when your loan is closed/sold. The higher the rate the originator can get you to take, the higher the yield spread and the more money the originator pockets. It's basically a game - the originator needs to guess what's the highest rate you'll accept so as to make the most money. Letting everyone know you are actively comparing offers will help you get the lowest rate.
And another factor in determining your rate is how much money you are putting into the transaction. If you are talking 100% financing, the rate you are quoted is actually decent. But remember, it's not all about the rate. There are fees, too. A low rate with high fees can be worse than a higher rate with no fees. You need to see the complete deal to make your decision.
Best of luck!
Check with the credit unions....since they have low overhead costs, they are usually very competitive when it comes to rates and fees.
============
REPLY TO TOGSHIYOKUNI'S COMMENTS:
I was one of the guys that threw up a rate, and I take offense to what you just wrote. If you look at the answers I've written over time, then you'll know I'm not a B.S.'er.
6.25% w/ 0 pts & 0 origination is not high - even for those with excellent credit. The rates on a 30 yr fixed w/ 0pts, 0 origination on a 1-unit primary residence, with 5% down, and with good credit - 6.125 - 6.250% is the range.
Did I make some assumptions about the borrower? Yes. I assumed he was quoted the 6.25% by a loan officer. He surely didn't just pull it out of thin air. I assumed the LO asked him about the property type, his down payment, his credit, etc. Of course, if the parameters change, eg, bad credit, then the rate will be higher.
You then go on to write that 3/27 ARM may get the borrower into the 5s. If it does, then BARELY - more like 5.875% - 6.000%. Are you familiar with the term inverted yield curve?? Also, why take a 3 yr ARM knowing you'll have to refi it in 3 yrs when for another 0.125% you could have a 30 yr fixed. With such a small gap, even if the borrowers plans are to sell in 3 years, I'd still advise against it - as plans often do change.
www.totaldebtsolutionsllc.com
What is the best way to get a good mortgage rate in California?
I have a friend who is buying a house. He is trying to get the best rate. There are mortgage brokers that are offering a rate that is 0.125% better than the banks. Right now, that is around 6.25% for a 30 year loan at 80% financing. Are mortgage brokers the best deal? Thanks.
I like that your asking about a good mortgage... not the BEST. There is no BEST out there. If your friend likes the rate (more importantly the payment) then he should be ok.
Find a loan officer you like and can trust. When you get the good faith estimate keep in mind that the items from the loan officer are going to be:
Origination, Mortgage Broker Fee, Processing, Credit Report and if they are sneaky an application fee.
Most of the items the loan officer discloses to you are in fact 3rd party fee's and in reality we have little control of this... Especially with a purchase since many of the service providers are picked by the agents.
Appraisal, tax service, underwriting, title/escrow, notary, doc prep etc... Also taxes and insurance.
Expect title and escrow to cost a pretty penny. Keep in mind that the companies that are used are typically picked by the agents but it is a negotiable item in the contract. If you shop around you maybe able to find better pricing. Make sure it is better for both you and the seller or the seller most likely will not be willing to change companies.
Regarding the rates... depending on the loan amount, credit, documentation etc... they may be great or they maybe on the high side. Without knowing the scenario it is hard to tell if the pricing is right in line; however 6.25% is not a bad rate.
Good Luck
Kevin 866-562-6838 x 106
kruorock@firstratelending.com
6.25% sounds pretty decent, but when shopping rates, make sure your friends finds out what the closing costs are too. Some companies offer really low rates but then slam you with costs.
What is the best lender to choose for a mortgage in Florida?
It is so hard to pick a mortgage lender. They can only give you a range of interest percentages. You don't know the rate til you commit to them after you have already paid the application fees. What is the best lender in Florida for would-be homeowners?
An experienced loan officer who will work to find the best program for you is most important. The company which will offer you the best terms usually depends upon your specific situation especially income, savings and & financial history. Ask people if they can recommend one. Often, a quality real estate broker can be the best resource to recommend a few lenders or loan officers after learning a little about your circumstances. (Similar variables make it impossible for anyone to quote you a rate until they know your specifics.) Don't pay any significant application fees in any case. Top lenders do not require you to commit by paying hundreds of dollars (although a few may charge up to $20 to pull your credit reports).
I used to use them exclusively for conforming loan scenarios when I worked in brokerage.
Also, try Third Federal. They have a PMI waiver available and good Jumbo pricing. They were tough to beat if you qualified for their programs.
Good luck.
What is the best way to break into the mortgage business?
Just moved to the tampa area and have a background in sales job shadowed a cousin in his mortgage business in michigan and loved it!! What is the best way to break into the business?
Just look for a Loan Officer position. It is the best way to get started in the sales part of it. From there you can move your way up into management and operations.
What is the best mortgage thing 30 years fixed or 30 years jumbo?
what is the best way to use mortgage. jumbo or fixed.
of course the more years you go, the more interest you pay in the long run
but yeah i have a 30year fixed on my home, and everything is reliable and steady.
dont do jumbo.. cause they can surprise you and increase it some months n it gets all confusing..
go now though! interest rates are decent
Jumbo limits are set by Fannie Mae (OK, technically set by the Office of Federal Housing Enterprise Oversight office) and are currently $417000 for the US lower 48 states, so if you are borrowing more than that on a mortgage you will probably end up with a jumbo.
Jumbos have different interest rates as well, but they change daily so I won't try to quote them to you...
https://www.efanniemae.com/sf/refmaterials/loanlimits/jumboconf/xls/loanlimref.xls
What is the best available mortgage rate available to canadians right now?
What is the best available mortgage rate available to canadians right now. I am looking to get preapproved for a 5 year term with a fixed interest rate. Thanks
Currently 5.05% or 5.09% fixed 5 year rate.
The last two times when I renewed with my bank (TD canada trust), I used canadamortgage.com and a couple of other local mortgage broker sites to get their best rates and then asked and got my bank to match their competative rate. If your bank won`t match, use a local mortgage broker for your mortgage.
What is the best refinance plan to reduce my monthly mortgage payments?
I'm looking for the best plan as in:
- Not getting my face ripped off in closing cost
- Not increasing my current interest rate of 5.8 to something over 8%
- Not having to pay thousands in points
It seems I'm having the same dilemna as when I bought my house and rates were supposedly "low" 4 years ago. I know I can't win, but I simply can't afford my current mortgage payment of $1500+ a month on a house I mortgage $185K for.
Which mortgage stock is in the BEST shape compared to competitors?
I am looking for a thoughtful analysis on what is the best few mortgage companies out there right now. I invest and I see that everything has fallen pretty badly. So based on your research, tell me why you believe that the stock is in good shape.
I better not hear, "Because it can't go any lower", "because I looked at the chart" or because Cramer said it is good.
What are your picks?
None.
No need to try to catch a falling knife. Plenty of easy money lying around.
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