Blog – Page 635 of 789 – Mike Pfefferman

24

Mar

Home Buyer Tips

How the Truth in Lending Act Protects You When You Take Out a Mortgage

How the Truth in Lending Act Protects You When You Take Out a Mortgage If you’re planning to get a mortgage, it’s critical that you know your rights under the law. The Truth in Lending Act (TILA) is a piece of federal legislation that governs how mortgage lenders can and cannot operate their businesses.

So how does the Truth in Lending Act protect you, and what are your rights under this legislation? Here’s what you need to know.

Your Lender Must Give You A Timely Loan Estimate

A Loan Estimate (previously known as a Good Faith Estimate) is a document your lender provides you that details information about what kind of a mortgage you’ve applied for. Your Loan Estimate includes terms such as your estimated monthly payment, your estimated interest rate, and whether or not your mortgage balance is able to rise even if you make payments.

Under the Truth in Lending Act, your lender is obligated to give you a good-faith Loan Estimate within three days of when you apply for your mortgage. If your lender fails to provide your Loan Estimate within three days or fails to fix reported errors within 60 days, you can sue for damages and report the lender to the federal government.

Your Lender Must Notify You Of Rate Changes

The Truth in Lending Act states that your mortgage lender is required to give you an annual percentage rate estimate within 1/8 of one percent of government guidelines. Your lender must use the government-approved mathematical formula to provide your rate estimate.

If your estimated rate may be subject to change, your lender is obligated to disclose the first possible change you’ll see to your interest rate, and the maximum degree to which it may change. Your lender is also required to disclose the maximum possible changes for subsequent rate adjustments.

There Are Strict Rules About How And When Lenders Can Charge Late Fees

If your lender typically administers fees for late payments, TILA will specify that your lender must notify you – in advance – the date on which a late fee will be imposed and how much the late fee will be. TILA states that no late fee can exceed 4 percent of the amount past due, and a payment is only considered late if it is 15 or more days past due (or 30 or more days past due if you prepaid your interest). Your lender also cannot charge you a late fee on top of a late fee.

TILA is a powerful consumer protection law that gives would-be homeowners a great deal of power. By knowing your rights under TILA, you’ll be able to confidently negotiate with lenders and avoid any unnecessary problems. Contact your local mortgage professional to learn more.

23

Mar

By support

Home Mortgage Tips

5 Steps Towards a Better Credit Score You Can Take Today

5 Steps Towards a Better Credit Score You Can Take Today When it comes to finding the best mortgage, your credit score is a major determinant as to the kinds of rates and conditions you can get. Lenders quite understandably want to manage their risk. But for a number of potential homeowners, these practices and policies can be a barrier to home ownership.

The good news? If your credit score isn’t great, you can easily improve it and get better lending terms. Here are five steps you can take right now to give your credit a boost.

Get Your Annual Credit Report And Dispute Errors

Simply disputing errors on your credit report is one of the easiest ways to give your score a boost. The FTC says that 1 in every 5 Americans has errors on their credit report that have an impact on their score. By simply disputing errors on your credit report, you can give your score a small boost almost overnight.

Miss A Few Payments? Talk To Your Lender

If you’ve missed a payment and it’s more than 30 days past due, chances are your lender has already reported the missed payment. Once a missed payment is on your credit report, the fastest way to remove it is to talk to your lender. Get a written and signed agreement that if you pay the overdue balance, they’ll report the account as “paid in full.”

Ask For A Credit Increase

Your credit utilization ratio – the amount of credit you’ve used compared to the total amount available to you – makes up 30% of your FICO score. In general, experts say that using more than 30% of your available credit can harm your score. If you can’t immediately pay down your debt below that 30% threshold, one great way to improve your credit utilization ratio is to ask for a credit limit increase.

Get A Co-Signer To Help

Having someone with good credit co-sign your lending agreement is a great way to improve your credit. When you get a co-signer for your credit card or car loan, the better quality credit line may help boost your score. Just make sure you stay on top of payments – otherwise both you and the co-signer will see your credit scores fall.

Keep Good Debts On Your Report

While it is important to review your credit report and have any negative items removed, you’ll want to ensure that any positive entries – debts you’ve paid in full – stay on the report. When your credit report shows debts as paid in full, your score increases because it shows that you’re a responsible borrower.

Improving your credit score doesn’t have to take years. These five strategies can help you to boost your credit and qualify for better mortgage loan terms. Contact your local mortgage professional to learn more.

22

Mar

By support

Home Mortgage Tips

Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security

Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security If you’re nearing retirement, you’re likely starting to think about your savings and retirement plan and how you can ensure a financially secure retirement. With your peak income-earning years largely behind you, you’ll need to work with what you have in order to ensure a livable retirement income. That’s where a reverse mortgage may be a sensible option.

How does a reverse mortgage work, and how can it help you to have a more financially secure retirement? Here’s what you need to know.

A Reverse Mortgage Is Tax-Free And Saves Your Social Security Benefits

Social Security benefits offer a basic form of income for senior citizens, but if you tap into your Social Security too early in your retirement, you could use up your available benefits in a short span of time. Deferring Social Security until later on in your retirement means that you’ll get an extra 7 to 8 percent per year you defer, which is why you’ll want to save your Social Security for as long as possible. But in order to do that, you need another income source to live on.

A reverse mortgage is a tax-free income source that you can use to fund the early part of your retirement, allowing your Social Security benefits to mature. Best of all, a reverse mortgage frees up your budget so you can invest more of your funds and collect returns later.

You’ll Never Owe More Than Your Home’s Value – And There’s No Set Repayment Date

A lot of loans have high interest rates and fixed repayment periods. This means that if you use credit cards or take out a personal loan, for instance, you’ll be locked into a set repayment date or won’t have a high enough borrowing limit – or if you do have a high borrowing limit, you’ll find that interest charges quickly add up.

Reverse mortgages have no set repayment date, which means that you can use the money from a reverse mortgage as needed without having to worry about repayment. You’ll also never owe more on your reverse mortgage than what your home is worth, so you’ll never find yourself underwater.

A reverse mortgage is a great way to ensure that you have a safe, stable retirement – and it can add an extra layer of security on top of your social security benefits. Are you considering taking out a reverse mortgage on your home? A qualified mortgage advisor can help – contact a mortgage professional near you to learn more.