Credit Qualifying for a Mortgage after Divorce: 3 Tips

Very frequently, we get borrowers who have gone through a divorce and due to lack of awareness of the items still on their credit report, are unable to qualify for the refinance or purchase mortgage they were hoping to obtain. You can still get a mortgage after divorce. Here are some tips to make sure this isolated event doesn’t affect your credit score, causing you to miss out.
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Buying a Home After Foreclosure

If you’ve experienced foreclosure you might think you’ll never be in a position to buy another home again. Foreclosure certainly impacts your credit score but it’s only a matter of time before you can once again apply for a mortgage. The question many people have is how long they have to wait before buying a home after foreclosure. How long depends on the circumstances of your foreclosure, your ability to increase your credit score, the type of loan you’re prepared to apply for and the foreclosure waiting period.Continue reading

Climbing Out of Debt – Part 2

In “Climbing Your Way out of Debt Part I,” we looked at the cost of paying down debt by focusing on credit cards with the highest balance before focusing on lower debt balances and loans. This time we examine how much money it will cost over the long term if you pay down credit cards charging the highest interest first. We’ll also examine the costs of emotion when it comes to borrowing money from family members.Continue reading

Climbing Out of Debt – Part 1

Like many Americans, you have a few credit cards and do your best to manage your money responsibly but it seems every month you come up a few hundred dollars short. Trouble is your annual raise hasn’t kept pace with the rising costs of gas, groceries and other necessities let alone discretionary or luxury items like movie tickets, your fitness club membership or trips to the spa. You know if you don’t rein in your spending, you’re debt will grow and climbing your way out of debt will be even more difficult than it is right now. Nobody wants, or likes, to be in debt especially in today’s tough economy. While climbing your way out of debt may seem like achieving the impossible, there are several ways to do it.Continue reading

Good Credit to Great Credit

Many people ask when looking into refinancing their mortgage ask why their credit is considered good, but not excellent. It is a common misconception that simply because you pay your bills on time every month that your credit is viewed as excellent.

There are other important factors involved in credit score ratings derived by credit reporting agencies. For instance, the 3 credit bureau agencies, Trans Union, Equifax and Experian look at how many credit cards you currently have open, how long they have been open, and how much is currently owed with each creditor associated with the credit limit available. These factors can make a big difference when looking to get a refinance approved and the program qualified for. A consolidation home loan refinance is a productive way to pay off credit card debt in full.

Also, it often increases credit scores from good to excellent in a quick time period, since credit cards that were once listed as owed with high balances are reported as paid in full through the debt consolidation refinance program.

Repairing Your Credit Score: Other Options

If you’re interested in learning more about repairing and maintaining a good credit score, particularly if you need to improve your own credit score, then read on. Perhaps, as a potential first-time homeowner, you’re in the market for a mortgage—or maybe you need your mortgage refinanced; either way, good credit is important!

Fixing and repairing your credit score is more than simply paying off debt regularly and in a timely manner, however. Yet it seems to be commonplace for consumers to be ignorant of what affects their credit score and what they can do to repair it and maintain a higher score.

But as already mentioned, there’s a lot more involved with what goes into a credit score. Here are five other, perhaps lesser-known ways you can fix and then improve your credit score.Continue reading

Benefits of Debt Consolidation Loans

If you have a great deal of outstanding debt, there are a number of benefits to getting a debt consolidation loan. Consumers who qualify for debt consolidation loans have the opportunity to begin paying down their debt much sooner than they would without one. Here are some of the benefits of using a debt consolidation loan.
One of the first benefits people experience from using a debt consolidation loan is stress reduction. The most common factor known to create stress is debt. By consolidating your debt into one account you significantly reduce stress in your life because you’ve taken the steps necessary to get your debt under control. There’s a peace of mind that comes with knowing you’re back in control of your spending habits having worked with professionals to create a workable plan for paying down your debt.
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Should You Cancel Credit Card Accounts When Refinancing?

It’s a temptation many of us have when we’re looking to borrow money. Should you cancel your credit card account as a way to increase your credit score? Would closing a credit card account impact your FICO score? While situations vary, the answers to these questions may surprise you. With banks and credit card companies charging more fees than ever before consumers have to be on top of their game. Reading the mail and the fine print on bank and credit card statements could be the difference between paying more in interest and securing an attractive mortgage rate when it comes to refinancing your home.
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How do I get approved for a mortgage & improve my credit?

Quick facts video 2 – How do I get approved for a mortgage loan and improve my credit score?

How does my credit score impact my ability to qualify for a mortgage?

Let’s start with some basic information about credit.

There are three major credit bureaus:  Equifax, Experian, and TransUnion.

These credit bureaus document payment histories for mortgages, auto loans, personal loans, credit cards, and other consumer debt.  They also track and report derogatory information such as collections, foreclosures, judgments, charge offs, liens and bankruptcies.  From this compilation of debt and payment history a credit score is computed.

My credit history (list below) rent, utilities, mastercard, visa, student loans,

OH NO!!! (list below)  collections, foreclosures, judgments, bankruptcies…

Understanding credit scores

Credit scores range from 300 to 850 and have proven to be highly predictive of future repayment performance.  Lenders therefore depend on an individual’s credit score to determine the risk of a borrower defaulting on their mortgage loan.

In the past a credit score of 580 was commonly used as the lowest score acceptable for obtaining a mortgage, however after the 2008 mortgage crisis this score is now considered too risky and a score of at least 640 is now typically required.  Scores above 720 are considered “good” credit since they represent a low risk of default and therefore the best pricing is obtained by borrowers with the highest credit scores.

300 NO WAY!

580 Sorry – won’t work today

640 Acceptable – but by improving your score – you could save!

720 WAY TO GO! That’s going to save you some bucks!

850 Are you kidding? You go you little credit master!

How do I improve my credit score?

  1. Well – make payments on time! This may seem obvious to some, but making your payments consistently on-time over the years is the most critical component of your credit score.
  2. Check your credit on a regular basis and if there are any errors have them corrected immediately.  Federal law entitles you to one free credit report annually which can be ordered at freecreditscore.com
  3. Keep your credit card balances to no more than 1/3 of the outstanding limit. Maxing out your available credit negatively impacts your credit score, even if you pay your bills on time.
  4. Don’t close that account!  Keeping revolving accounts open especially over time improves your score.
In brief 

1. Make Payments ON TIME!!

2. Check your credit at freecreditscore.com.

3. If your Visa limit is $15,000 don’t let your balance go above $5,000.  Maxing out your cards damages your credit score!

4. Don’t close that account, even infrequently used accounts can improve your score.

Thanks for viewing our quick facts Credit video, I hope you found it helpful.  If you have any questions please feel free to call us, our loan officers are friendly and ready to help!

Our loan officers are happy to answer any questions!  So give us a call at 800-Homestead-8! (A text file of this video can be found on our website)