Walter Shkolnik
If you have a home loan, and you think that your property went up in value by ten percent or more since your took out that loan, you might be a good candidate to refinance. It can save you money on your mortgage payments; improve your terms, or both. Here is why:
When you take out a home loan, bank uses your home as collateral for the loan. The more expensive the collateral is, the lower the bank’s risk that you will default on the loan and walk away from that collateral. So, if over the years, the collateral grows in value, bank’s risk is reduced and therefore you should be able to qualify for a lower rate. If your home went up in value by ten percent or more, banks will consider your home loan to be a less risky investment, and therefore should be able to offer you a lower rate. This is assuming that you kept the same job and income, made all of your payments on time, and market interest rates are the same or lower.
Lower interest rate can benefit you in several ways. You can either refinance and lower your monthly payments, or refinance into a shorter loan term, which means you would be making the same monthly payment, but you would pay off your home sooner. For example, if you have a 30 year fixed loan, you could refinance it at a lower rate in to a 25 or even 20 year loan, and keep your payments about the same.
Before deciding to refinance your home loan, you need to consider the cost of doing the refinance, and then compare it to savings. If it is costing you $5,000 to refinance, and your savings are only $25 per month, it is not worth it because it would take you over 16 years to just brake even. But if your savings are $250 per month, or 5 years worth of mortgage payments, it is probably a good idea to refinance you home loan at that time.
Walter Shkolnik is a Loan Consultant employed by Express Capital Funding Group, www.expfunds.com. He has over ten years of experience Financing Real Estate transactions.
http://www.articlesbase.com/mortgage-articles/home-loan-refinance-when-is-a-good-time-to-refinance-a-home-loan-128678.html
Showing posts with label Lowest. Show all posts
Showing posts with label Lowest. Show all posts
2007-08-20
Tips on How to Keep Your Credit Score from Lowering
by Thane Rutledge
If your credit score is under 630 or so, then you have a problem. If it's in the 500 area, you definitely have a problem. If you have a score in the 400 region, well, you have your work cut out for you.
While working as a loan agent, I came upon credit issues with clients everyday. I saw great credit and bad credit, exceptional credit and abominable credit. By working with so many credit issues for such a protracted period of time, I learned a lot and I'm happy to pass that info on to you.
Believe it or not, it's a lot easier than you might think to at least maintain your score but it's also not that hard to improve your score. There's really no great mystery to it. Having credit worthiness is the heart of our capital system today and needless to say, if you don't have good credit, then you won't get a mortgage, a HELOC, a credit card, a car loan, not even an ATM card without limits. Taking care of your credit is important
Okay, enough preamble. This article will give you basic, simple, yet practical tips that can help you to keep your credit score from lowering and allow you to even improve it. Let's get started.
1. Not a lot of consumers know this but according to the Big Three of the credit world, Equifax TransUnion, and Experian up to approximately 30% to 35% of your credit score is determined by your payment history. This didn't always used to be the case but it is now. Believe it or not, if you miss just one month's payment on a tradeline, it can drop you 100 points. That 100 points could be the reason why you get that better interest rate on your home equity line of credit or that car loan or that business loan.
2. Here's the simple yet powerful secret of getting a good credit score: your credit rating and score is made up of your demonstrated ability to pay all your bills on time. Pay your bills within the time allotted to you by the company that extended to you the credit. Prompt payment in housing and car loans have especial weight but lenders certainly don't diminish the demonstrated ability to pay a credit card consistently on time. Okay, first thing to do proactively besides paying your bills on time is to get a copy of your credit report. Mistakes on credit reports are common my friend. In my experience, about 1 in 5 have an error although the industry tolerance is 1 in 10. That's nonsense. It's worse than that. If there are any mistakes on your credit, they can be fixed. You'll need documentation to prove your claim but if it's clear and you make it easy for the credit company, they will remove mistakes and that will automatically cause your score to go up. At the end of every credit report are the names and address of the Big Three. Contact them and get it started.
3. Avoid bankruptcy and foreclosures. A bankruptcy will lower your score from 150 to 200 points. If at all possible, avoid it. Bankruptcy statements on your credit report actually stay there for for up to 10 years. Foreclosures around nine to 10.
4. Close old accounts. The number of tradelines (accounts) that you have open is a determining factor in your credit score. By consolidating your debt into one credit card if you can and by closing unused accounts, this will help your score. I still remember the very first loan I did on my own. The man had about 15 tradelines open and even though he paid his debts faithfully, his score was only around 540. I got him a debt consolidation loan on his refinance that allowed him to take some of his equity out (he had a lot of built up equity) and he used that to pay off all his debts. Within six months, his score was in the high 690 range. For some lenders, they consider that A-paper territory. You should do the same.
5. Not a lot of people know this but your credit card company sends out a report once a month to the credit bureaus regarding your outstanding balance. By having a low balance, or none at all, you are showing yourself as financially responsible to the Big Three and the consequence? It's then part of their calculation to improve your score.
There you have it. In summary, your credit score determines so much of your financial life. Like I said, getting a car loan, a mortgage, or a school loan is determined in many cases on your credit score. It's even becoming important as a determining factor in gaining employment. The current company I work for asked me to sign a waiver allowing them to check my credit. I was surprised for it was only the second time that has happened to me. I suspect it will become more common.
Now you have the knowledge you need to improve your score and in how to maintain it.
If you'd like a free online credit report? You can get one by visiting http://www.freecreditreportinfo.info a popular credit report site that provides free tips and resources including information on credit scores, credit reports, credit repair and resolving credit disputes legitimately.
www.freecreditreportinfo.info/.
If your credit score is under 630 or so, then you have a problem. If it's in the 500 area, you definitely have a problem. If you have a score in the 400 region, well, you have your work cut out for you.
While working as a loan agent, I came upon credit issues with clients everyday. I saw great credit and bad credit, exceptional credit and abominable credit. By working with so many credit issues for such a protracted period of time, I learned a lot and I'm happy to pass that info on to you.
Believe it or not, it's a lot easier than you might think to at least maintain your score but it's also not that hard to improve your score. There's really no great mystery to it. Having credit worthiness is the heart of our capital system today and needless to say, if you don't have good credit, then you won't get a mortgage, a HELOC, a credit card, a car loan, not even an ATM card without limits. Taking care of your credit is important
Okay, enough preamble. This article will give you basic, simple, yet practical tips that can help you to keep your credit score from lowering and allow you to even improve it. Let's get started.
1. Not a lot of consumers know this but according to the Big Three of the credit world, Equifax TransUnion, and Experian up to approximately 30% to 35% of your credit score is determined by your payment history. This didn't always used to be the case but it is now. Believe it or not, if you miss just one month's payment on a tradeline, it can drop you 100 points. That 100 points could be the reason why you get that better interest rate on your home equity line of credit or that car loan or that business loan.
2. Here's the simple yet powerful secret of getting a good credit score: your credit rating and score is made up of your demonstrated ability to pay all your bills on time. Pay your bills within the time allotted to you by the company that extended to you the credit. Prompt payment in housing and car loans have especial weight but lenders certainly don't diminish the demonstrated ability to pay a credit card consistently on time. Okay, first thing to do proactively besides paying your bills on time is to get a copy of your credit report. Mistakes on credit reports are common my friend. In my experience, about 1 in 5 have an error although the industry tolerance is 1 in 10. That's nonsense. It's worse than that. If there are any mistakes on your credit, they can be fixed. You'll need documentation to prove your claim but if it's clear and you make it easy for the credit company, they will remove mistakes and that will automatically cause your score to go up. At the end of every credit report are the names and address of the Big Three. Contact them and get it started.
3. Avoid bankruptcy and foreclosures. A bankruptcy will lower your score from 150 to 200 points. If at all possible, avoid it. Bankruptcy statements on your credit report actually stay there for for up to 10 years. Foreclosures around nine to 10.
4. Close old accounts. The number of tradelines (accounts) that you have open is a determining factor in your credit score. By consolidating your debt into one credit card if you can and by closing unused accounts, this will help your score. I still remember the very first loan I did on my own. The man had about 15 tradelines open and even though he paid his debts faithfully, his score was only around 540. I got him a debt consolidation loan on his refinance that allowed him to take some of his equity out (he had a lot of built up equity) and he used that to pay off all his debts. Within six months, his score was in the high 690 range. For some lenders, they consider that A-paper territory. You should do the same.
5. Not a lot of people know this but your credit card company sends out a report once a month to the credit bureaus regarding your outstanding balance. By having a low balance, or none at all, you are showing yourself as financially responsible to the Big Three and the consequence? It's then part of their calculation to improve your score.
There you have it. In summary, your credit score determines so much of your financial life. Like I said, getting a car loan, a mortgage, or a school loan is determined in many cases on your credit score. It's even becoming important as a determining factor in gaining employment. The current company I work for asked me to sign a waiver allowing them to check my credit. I was surprised for it was only the second time that has happened to me. I suspect it will become more common.
Now you have the knowledge you need to improve your score and in how to maintain it.
If you'd like a free online credit report? You can get one by visiting http://www.freecreditreportinfo.info a popular credit report site that provides free tips and resources including information on credit scores, credit reports, credit repair and resolving credit disputes legitimately.
www.freecreditreportinfo.info/.
2007-08-06
Refinancing a Mortgage to Avoid Possible Debt Problems
By: Joel Cohen
Some people are more financially educated than others. They are very tuned in to budgeting and money management. Debt can occur from numerous reasons and some consumers can pay attention to the signals at a very early stage. If you have obtained a mortgage and you find that for some reason your financial capabilities can't cope with the expenses, refinancing your mortgage might be a reasonable solution.
A Mortgage Can Create a Debt Problem
Debt usually is build because of high interest unsecured loans, credit cards or payments. A mortgage can add to that. If for some reason you find that the mortgage payments happen to be high consider refinancing to a longer term or simply change your repayment plan. Information about mortgage refinance should be obtained before signing any documents to prevent potential loss.
Regardless of the payment terms you chose, a mortgage may cause a debt problem. A person that has a mortgage to repay is so involved in preventing any loss to his home, unconsciously creating a situation where the mortgage turns into the highest priority monthly payment.
Default Payments and Bad Credit
When a mortgage or any payments needed to be made to creditors are in default, the persons credit ratings drop. If you are in a case where you are a few months behind on your mortgage payments you are in a higher risk of your house being repossessed. By taking action in the right time and refinancing, you can avoid bad credit problems. It would be best to first improve your credit and then refinance, but, if you cannot wait consider getting a bad credit mortgage refinance loan.
The Lowest Interest Rate Isn't Always the Best
Although the interest rate is important, I find it to be more like candy for the eye. It is a way to attract clients and a good one too! When you apply for a mortgage be sure you can afford the terms you have chosen and ALWAYS calculate and estimate how much money you will need to pay every month.
http://www.ArticleBiz.com
Some people are more financially educated than others. They are very tuned in to budgeting and money management. Debt can occur from numerous reasons and some consumers can pay attention to the signals at a very early stage. If you have obtained a mortgage and you find that for some reason your financial capabilities can't cope with the expenses, refinancing your mortgage might be a reasonable solution.
A Mortgage Can Create a Debt Problem
Debt usually is build because of high interest unsecured loans, credit cards or payments. A mortgage can add to that. If for some reason you find that the mortgage payments happen to be high consider refinancing to a longer term or simply change your repayment plan. Information about mortgage refinance should be obtained before signing any documents to prevent potential loss.
Regardless of the payment terms you chose, a mortgage may cause a debt problem. A person that has a mortgage to repay is so involved in preventing any loss to his home, unconsciously creating a situation where the mortgage turns into the highest priority monthly payment.
Default Payments and Bad Credit
When a mortgage or any payments needed to be made to creditors are in default, the persons credit ratings drop. If you are in a case where you are a few months behind on your mortgage payments you are in a higher risk of your house being repossessed. By taking action in the right time and refinancing, you can avoid bad credit problems. It would be best to first improve your credit and then refinance, but, if you cannot wait consider getting a bad credit mortgage refinance loan.
The Lowest Interest Rate Isn't Always the Best
Although the interest rate is important, I find it to be more like candy for the eye. It is a way to attract clients and a good one too! When you apply for a mortgage be sure you can afford the terms you have chosen and ALWAYS calculate and estimate how much money you will need to pay every month.
http://www.ArticleBiz.com
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