Variety of Mortgages

Variety of Mortgages

Fixed-rate: Mortgages with a fix interest rate that will not change during the life of the mortgage.

Flexible-rate/variable-rate or ARM: Interest rate that fluctuates up or down according to the index .

Graduated payment: Payments increase gradually over the life of the mortgage.

Balloon: Low fixed payments during the lifetime of the loan with the final payment being a large final payment.

Option ARMs aka Flexible payment ARMs: Gives the option to adjust the loan rate. This type of loan have an interest rate that adjusts every month without adjustment caps. The payments will rise over time.

Interest Only Mortgages: Allows the interest of the mortgage to be paid over time. The principle of the mortgage is not paid at this time.

Mortgage Points, What Are They?

Just what are they? They are fees you (borrower) pay the lender at the time the loan is closed. It is 1% of the mortgage loan.

A loan of $100,000 with three points will cost a payment of $3,000. If you decide to buy points when you close on your mortgage it can reduce your interest rate on the loan. This will make your monthly mortgage payment will be lower.

You have to decide if you can afford to make the up front payment for points. If you plan to stay in your home for a while then it will make sense to pay for the points.

Points: (Credit to the Borrower)

             (Investment to the Lender)

              (Lower interest Rates)

A Credit Grade, Just What Is It? « Angieta9’s Weblog

A Credit Grade, Just What Is It? « Angieta9’s Weblog

A Credit Grade, Just What Is It?

A credit grade is what financial institutions use to measure how a borrower will pay back a loan, credit cards, money, etc. based on the borrower’s past credit history. Credit grades can be affected by many things, such as the borrower’s existing debt and slow past payment history. Another aspect of how a lender decides to make a loan to a borrower is, the lenders take into consideration the Debt To Income ratio (DTI), the amount of the requested loan, and the current lender rate.

When you apply for credit, lenders want to know the risk they would take by lending to you. FICO (Fair Isaac & Co.) scores or credit grades are the credit scores lenders use to find out your credit risk. Each score is based on information gathered by three major credit bureaus (Experian, TransUnion, and Equifax) who keeps a credit profile about your financial history. You have three FICO scores, from each of the credit bureaus. The three FICO scores you have will affect how much and what loan terms the lenders will give you at the time of the loan.

If the information on your credit report changes, your credit scores will change as well.

Be wise when it comes to your credit score, credit scores are used when you apply for a mortgage, a car loan, a credit card or auto insurance, the rate you will receive came directly from your credit score.

Some factors lenders may look at concerning your Credit Score:

The length of established credit

Amount of credit used/verses the amount of available credit

Late payment on credit cards, loans, mortgages & sometimes utility, etc.

Negative information on a credit report: ( bankruptcies, charge-offs, collections, etc.)

Length of time at current address residence

Recent Inquiries

Hear advice, and receive instruction, that you may have wisdom in the end.

Ever Considered a Lease Purchase Home?

Ever considered a Lease Purchase Home? Just what is a Lease Purchase Home? Better known as Rent-to-Own homes or the term most often used is Lease Purchase Homes, Lease Option to Buy Homes, Houses for Lease Purchase and Lease Option Homes. Lease purchase home can be a great way for homebuyers who are credit challenged and would like to purchase a home. It is also great for home buyers who do not have a downpayment to purchase a home. Considering a Rent-to-Own home would allow you to obtain the downpayment and build up your credit.

It is also a way for you and your family to live in a home for one, two, or three years depending on the length of the contract, before purchasing the home outright. In a nutshell is it a way to purchase a home until you are able to handle a more traditional mortgage. There are occasionally move-in expenses associated such as a deposit toward the purchase of the home and/or security deposit. A lease purchase home/option home agreement gives you the option or the right to purchase the home within a specified time and agreed purchase price. At the time of the agreement signing there is usually an amount due at the time of signing. You may have to pay an Option fee, Security deposit and any other payments which go toward the purchase of the home.

Note: You maybe paying a rent higher than the market rate. Remember the extra cash is then applied to the agreed upon down payment amount. Be sure that you fully understand the agreement and make your payments on time. You could risk losing the purchase of the home and any or all of you have paid.

Establishing Good Credit & Good Credit Character

Obtaining credit for the first time can be easy for someone, such as a recent HS graduate or a divorced person, it is important that you establish good credit habits at the very beginning of your credit history.

Good credit habits will come into play when you need to buy a home, an automobile, obtaining a personal loan, even applying for a job position, and starting a business.

How to demonstrate a willingness to repay your debts by charging expenditures on your credit card and paying the full amount that’s due each month:

By applying for a pre-paid credit card which gives the option to report your payment history to credit report agencies. You will be no need to have a credit history for approval. Applying for a couple of gas cards is also another way.

 

Some pre-paid cards spend like a regular credit card. The limit of the card is the amount you load to the card.

5 – Words to Keep in Mind When Building Good Credit Character

Self-control

Responsibility

Commitment

Prompt

Consistency