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Archive for October 13th, 2006

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Mortgage Interest Rates: Qualifying for the Best Mortgage Interest Rate
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, October 13th, 2006

By Louie Latour

Mortgage interest rates are on the rise; however, you can still qualify for competitive interest rates if you invest the time. The interest rate you will qualify for depends mostly on the state of your credit, your debts, and your monthly income. Here are several tips to help you qualify for the best mortgage interest rate.

The most important aspect of your mortgage application is your credit. Before you apply for a loan you should request copies of your credit reports from each of the three credit agencies and carefully review these records for errors. If there are discrepancies or negative information in your credit reports this will adversely affect your credit score and the interest rate you will qualify. If you have negative information in your credit records you should negotiate with the creditor to have this information removed. Any mistakes in your credit records need to be disputed with the individual credit agency and the creditor responsible for the error.

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Mortgage offers vary widely from one mortgage lender to the next, so it is important to compare rates, terms and closing costs for each mortgage you consider, not just focus on the interest rates. The time you invest shopping for a mortgage will save you a significant amount of money over the life of the mortgage, regardless of your financial situation. It doesn

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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How Do I Know When My Mortgage Application Is Approved?
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, October 13th, 2006

  • income
  • tax records
  • employment history
  • rental history
  • credit report
  • bank statements
  • any legal problems
  • loan amount

All of these factors and more are used to decide if your application should be approved. A lender may approve you for one type of loan and not another. Lender requirements can vary between loans. The same lender may require a minimum 680 credit score for one type of loan but a 600 credit score for another loan.

Counter Offer

Sometimes a lender will not approve your loan as you want it, but gives you a counter offer with terms that they think make more sense.

For example, a borrower may request a cashout of $150,000 from their property. A lender may counter offer a $75,000 cashout instead. This may be because the lender doesn’t want the borrower’s credit burden to be too high.

Conditional Acceptance

When a mortgage application is approved the borrower usually receives the loan conditions that go along with this approval.

Loan conditions are requirements a borrower must meed in order to get the loan.

Some of them are very basic, such as providing a copy of picture identification.

Other conditions may be much harder to do, or involve a lot of work.

A lender may request a letter of explanation about a certain bad debt, or a recent employment gap. Lenders are typically interested in the past 2 years of employment.

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A lender may ask for proof of assets, income, or employment.

A lender may object to the terms of real estate purchase if the purchase agreement is unclear or ambiguous. Lenders can and will hold up a purchase if the offers and counteroffers that both parties make in a real estate purchase are unclear. This can hold up a loan close to the end !
of the p
rocess, so make sure everyone is available to update any documents.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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What Should I Look For On My Credit Report That Affects A Mortgage?
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, October 13th, 2006

By Ben Afzal

Basics

Your credit report lists your credit lines and payment history for the past several years.

If there are errors on your credit report you should take care of them before you look for a mortgage.

Purchasing your credit report should usually cost you less than $50, and often a lot less than this.

Derogatory Credit Items

Your credit report breaks your credit lines down into three different areas:

  • open credit lines
  • closed credit lines
  • derogatory credit lines

The open credit lines are ones that you currently have that have no problems in their payment history.

A closed credit line is one that has been closed at either party’s request.

A derogatory credit line is one where there are late payments.

Late payments are listed as being late by 30 days, 60 days, 90 days, or more.

The credit report will also list each month and year in which a late payment happened, and by how late the payment was. For example, there may be a listing of a June 2005 late payment by 60 days, and a January 2006 late payment by 30 days.

Late payments will tend to reduce your credit history. Occasional lates by 30 days may be understandable by mortgage lenders. This can just be because someone forgot to pay a bill.

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A repeated pattern of late payments is more serious.

If you find errors on your credit report you will need to gather documentation to prove this is incorrect and work directly with the creditor to resolve this. When you have a written resolution of this you can submit this to credit bureaus to clean up your credit.

You may see creditors on your credit report that you don’t recognize. This is often because your debt has been sold to a collections agency.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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What Is My Credit Score And How Does It Affect My Mortgage?
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, October 13th, 2006

By Ben Afzal

Basics

Your credit report usually has three different credit scores.

Each score is from one of the three credit bureaus.

A mortgage lender usually uses the middle of the three credit scores. This is known as a “mid score”.

Your credit scores from different bureaus are usually within a similar range. For example, your credit scores may be:

  • 720
  • 706
  • 691

Sometimes there is a substantial difference between these scores.

Ratings

A credit score over 720 usually gets a borrower the best possible interest rates.

As your credit score declines the interest rates offered by lenders increase.

Mortgage lenders typically offer many different loans.

Each of these loans has a different set of criterion for approval. One loan may require a minimum credit score of 680, while another loan may require a credit score of at least 580.

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Lenders may also make exceptions to their guidelines if there are extenuating circumstances.

There are loans for all types of borrowers, even borrowers with credit scores below 500.

Often times a borrower with a lower credit score may be approved for a loan type but is capped in the amount of money they can get on a loan.

For example:

  • a borrower with a 720 credit score may be able to cashout 100% of their property value
  • a borrower with a 600 credit score may be approved for the same loan but only cash out up to 90% of their property value

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
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Is My Annual Percentage Rate What Determines My Payment?
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, October 13th, 2006

By Ben Afzal

Basics

The annual percentage rate is something that is quoted to you along side your interest rate.

The annual percentage rate is meant to give you a “true measure” of your loan’s cost.

Different lenders can quote you the same interest rate but the loan can cost you different amounts over time.

For example:

  • you are looking for a $500,000 loan
  • Lender A offers an interest rate of 6%
  • Lender A offers closing costs of $10,000
  • Lender B offers an interest rate of 6%
  • Lender B offers closing costs of $3,000

As you can see from this example although both lenders are offering the same interest rate one lender is cheaper. Lender B will charge less closing costs. Closing costs are the charges you need to pay when getting your mortgage loan.

The annual percentage rate adjusts your interest rate to factor in these closing costs.

In this example Lender A would have a higher annual percentage rate than Lender B. In this way you would be able to tell that Lender B was offering you a better deal even though both interest rates offered were identical.

Monthly Payment

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Your monthly payment is determined by what your loan note says.

This is usually your interest rate.

In this example the monthly payment will be the same between Lender A and Lender B. Lender B is still cheaper because they charge less up front.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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