Archive for the ‘Mortgage’ Category

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.

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Transcript from the video

“My husband and I had a couple of late payments, inaccurate late payments in our report. We were trying to get a house and it was really difficult. It was really stressful. We were really worried about our future. We were worried about him finishing school. We were worried about not being able to get a house. It’s sad and it was very, very stressful.

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CNN Video provides a video located here for consumers looking to maximize their credit score before applying for a mortgage. According to CNN, in today’s credit environment, a credit score of 750 is likely required to ensure you get the best rates and terms on your home loan.

According to the video, there are a few steps you should take to improve your credit score. Before applying for a mortgage loan, make sure to settle collections accounts, pay off high credit card balances, and avoid opening new lines of credit. In addition, do not close old credit cards even if you are no longer using them because the show a history of credit use which is an important component of a high credit score.

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