Obtaining a mortgage is no easy feat in today’s market. While sale prices are down, borrower qualifications have become more restrictive than ever thanks to the housing bubble and its effects on the economy. Banks have become weary of handing out home financing to any person with an open hand. While you may not fall into this category, a steady income and down payment are no longer the sole qualifiers that guarantee a mortgage. This discrepancy has left many would-be homebuyers in a frustrating limbo mode, asking, “Why can’t I buy a house?” –Fortunately, a few financial giants are working to fix the problem. In partnership with CoreLogic, the Fair Isaac Corporation (FICO) has created the FICO Mortgage Score, a new way to measure creditworthiness and mortgage qualifications.

continue reading “FICO Mortgage Score — What You Need to Know” »

You are most likely weighing the pros and cons of a short sale vs. a foreclosure. If you, like many other Americans right now, are coping with a challenge to meet your mortgage payment. This may be due to one or a combination of these common struggles: 1) job loss, 2) increasing rates if you are in an ARM loan, and 3) decreasing home values. It is most likely that you are deeply concerned with how either of these ugly terms will affect your credit score and which one may be the better choice of the two burdens. Instead of being intimidated, you are at least getting educated on your choices and the consequences. Though the reality of a short sale or foreclosure is not positive, researching what you will face is a good start to finding the best solution to your individual situation. continue reading “How Does a Short Sale or a Foreclosure Impact Your Credit Score” »

Credit Score Guidelines in the ever changing housing market, if you want a mortgage, it can help for you to know your credit score.

So you are ready to take that challenging step to refinance your current mortgage or purchase your dream home; but do you know what your credit score is and how it will stand up to Lender’s current guidelines? With the obvious strain on the housing market today, Lender and Investors are really cracking down on the level of credit risk they are willing to accept. When you seek out a mortgage, each Lender that you go to will pull your credit report, and you are entitled to receive a copy of this so that you can see where your score ranks and how it will hold up in their approval process. continue reading “How Lenders View Your Credit Score for Mortgage Approval” »

The news is filled with talk about loan modification and President Obama’s Making Home Affordable plan, and in a nation where over 3 million people are past due on their mortgage payments, a solution to their woes is something worth talking about. Loan modification is being pitched as a way to help troubled homeowners reverse their progression toward a short sale or foreclosure.

While loan modification may be a perfect recourse for some, it should be noted that not all homeowners will qualify for a loan modification and even then, some who do would be better served pursuing a different option.

In order to qualify for a loan modification your mortgage must have originated before January 1, 2009, you must live in the home, your monthly mortgage payment must be more than 31% of your pretax income, you must prove financial hardship, and the amount you owe on your home cannot exceed $729,750. If you do qualify for loan modification, your loan servicer will reduce the interest rate on your mortgage until your monthly payments drop below the 31% threshold. This new interest rate can go as low as 2% but if that is not enough to get below 31% they may extend the life of the loan or offer to defer a portion of the amount you owe until the loan matures.

continue reading “Loan Modification Might Not Be an Option” »

With mortgage rates plummeting, homeowners are flocking to lenders with hopes of refinancing their home loans at a lower interest rate and saving loads of cash in the process. On a $250,000 30 year loan, refinancing from 8% to the record lows in the 5% range that were reported in early January would lower monthly mortgage payments by nearly $500. Over the course of the entire loan, this amounts to over $170,000 worth of savings.

Most people, however, will not be able to qualify for a refinance loan and an even larger percentage will not be able to get approved for the best interest rates.

Having a good credit score simply isn’t good enough when it comes to getting the best rates on a refinancing loan. Most people consider a 720 credit score to be a good score, says Chris Freemott, president of All American Mortgage, but to get the best rates, borrowers will need a credit score of 740 or higher.

continue reading “A Good Credit Score isn’t Good Enough When it Comes to Refinancing your Mortgage” »