Mortgage Advice: 7 Tips for Establishing Credit

March 29th, 2010 - 
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According to Experian, a credit score is a number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it I will get paid back on time?” The information from your credit reports is used to create your credit score.

Before getting a line of credit, get your free credit report from each of the three major credit reporting agencies (CRAs): Experian, Equifax, TransUnion. Under federal law, you are entitled to one every year. Order online at www.annualcreditreport.com, or call 1-877-322-8228. Check to make sure someone else’s information isn’t mixed into your report. If so, contact the CRA immediately and have them delete it.

Then, follow these tips to help you establish credit and build your credit score:

1.Establish checking and savings accounts and maintain them responsibly.

2.Piggyback on someone else’s good credit by being added to a credit card as an “authorized” (joint) user.

3.Get someone to co-sign a loan for you (e.g., financing a car, or other secured loan) and make your payments on time.

3.Apply for student loans and make your payments on time.

4.Apply for a credit card or a secured card. But, make sure the issuer reports to all three CRAs. Otherwise, the card won’t help you build your credit.

6.Apply for one gas card and one department store card to add to your credit mix.

7.Use your credit cards regularly, but wisely. Make all payments on time because the two most important factors in your score are whether you pay your bills on time and how much of you available credit you actually use.

Establishing and maintaining good credit will make buying a home a lot easier for you. You’d be able to get a good fixed rate loan instead of having to settle for a variable rate sub prime loan. It will also help for times you may need a home equity line of credit for home improvements or a home equity loan for debt consolidation, including paying off student loans.

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Mortgages

100 Mortgage Financing – No Money Down Programs

February 1st, 2010 - 
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Buying a new home with no money down has never been easier. If you are unfamiliar with 100 mortgage financing, it may help to contact a mortgage broker before applying for a conventional loan. At one point in time, buying a home with no money down was unheard of. Today, the majority of mortgage lenders offer a range of zero down loan programs. These loans are ideal for families trying to buy a home with little or no money for a down payment.

Benefits of 100 Mortgage Financing

The benefits of applying for a no money down home loan are obvious. Ordinarily, mortgage lenders would ask new home buyers to have a down payment of 20%, 5%, or 3%. Rising cost of living makes it difficult for middle class families to save money for a home purchase. Instead of alienating the majority of working class people, lenders chose a smarter approach and begin offering a variety of home loans for every need.

With a 100 percent mortgage financing, down payments are not required. The downside is that these loans may carry a slightly higher interest rate. However, if your credit rating is high, the rate increase is barely noticeable. Of course, good credit is not required for getting a no money down home loan. Fortunately, there are loans available for all credit types.

Different Types of No Money Down Loan Programs

Another option for obtaining 100 percent financing involves getting a mortgage loan for 103 percent or 107 percent financing. 107 percent financing is perfect for homes that need a lot of cosmetic repairs.

If applying for more than 100 percent financing, a good or fair credit rating is a must. Typically, 103 percent full document loans require a score of at least 600. A credit score of at least 680 is required for 107 percent home loans.

Self-employed homebuyers can get approved for a stated income no money down loan. These individuals will likely need 12 months of banking statements, tax returns for the past two years, and a credit score of at least 650. Having bad credit will not disqualify you from getting 100 percent financing. Full document bad credit no money down home loans are available to those with credit scores as low as 580.

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Mortgages