28
Feb
By First Rate Financial Group
Mortgage

8 Ways To Maintain A Great Credit Score

8 Ways To Maintain A Great Credit ScoreHaving an excellent credit score is very useful. The following are some tips on how to maintain a superb credit score.

Open Credit Accounts When You Do Not Need Them

If you don’t have any credit accounts, you will have a low score. The best time to open them is when you do not need them. Keep a small balance on them and pay it all off at the end of each month to avoid paying interest.

Charge Up To Half The Credit Limit Then Pay It All Back Within A Few Months

If you must use a credit line, only use half of it and pay it back quickly.

Buy Big Ticket Items With A Credit Card For Cash Back And Points

Even if you can pay cash for a big ticket item, you may find it beneficial to buy it with a card that gives a reward for making a purchase like cash back or rewards points. Then pay off the balance as quickly as you can.

Ask For An Increased Credit Line

For credit accounts that you have been paying on time, call the customer service department and tell them you are thinking about buying something that is slightly above your credit limit. Ask them if they can extend the limit. This usually works even if you do not actually buy something.

You can attempt to raise your credit limit this way about once per year. As you increase your available credit capacity while maintaining all accounts in a “paid as agreed” status, your credit score should go up.

Move Credit Balances To A New Card With Zero Interest

Many credit card companies offer a zero-interest period for transfers of credit card balances from another card. After doing this, transfer this balance, once again, to another card that has a similar offer before the zero-interest period expires.

Close Old Accounts When New Ones Are Open

Having too many credit card accounts can lower your score. Keep about half a dozen cards. Close the ones that you transferred the balance from to zero interest cards.

Use Automatic Payments To Make Sure Bills Are Paid On Time

Never miss a payment or pay late. You may want to use automatic bill payment systems to make sure you never let a bill slip by.

Monitor Credit Card Activity For Unauthorized Use

Monitor all credit card activity in real time. Immediately take action if you notice an unauthorized charge. Monitor your credit history file on the three credit bureau services of Equifax, Experian, and Transunion.

Your trusted home mortgage professional can provide you with additional guidelines to improve and maintain your credit while preparing to purchase or refinance your home. Be sure to contact this valuable resource if you have any questions.

28
Nov
By First Rate Financial Group
Mortgage

Mortgage Challenges For Self-Employed Home Buyers

Mortgage Challenges For Self-Employed Home BuyersIt’s no secret that mortgage lending institutions look favorably on steady paychecks and positive debt-to-income ratios. That can leave many self-employed prospective home buyers feeling anxious about getting approved for a mortgage. But just like the 9-to-5ers who get regular paychecks, self-employed people earning a good living can get approved with a little due diligence.

The primary concern of mortgage lenders is not necessarily where your revenue comes from, it’s confidence that you can meet the monthly obligations. A lender probably wouldn’t see a significant difference between someone who was paid every two weeks and another paid monthly. Why should a self-employed earner be any different? While there are differences, that doesn’t necessarily have to be a bad thing.

Self-Employed Mortgage Applicants Face ‘Different’ Scrutiny

When reviewing a self-employed person’s mortgage application, the lender can expand their consideration to items related to your business. Factors such as stability, longevity, location, and viability are issues that can come into play.

This type of review mirrors that of steady paycheck earners in terms of length of employment, history of layoffs and other potential revenue setbacks. There really isn’t a higher standard for self-employed mortgage applicants. You enjoy a different professional life, and the process reflects those differences. That being said, there are a number of things you can do to put your best foot forward toward mortgage approval.

Strengthen Your Self-Employed Mortgage Application

First and foremost, every mortgage applicant must be able to demonstrate an ability to meet the monthly payments on paper. There is no way around the debt-to-income ratio. And although many self-employed people exercise some lifestyle flexibility in terms of tax deductions, your numbers have to prove you can take on a mortgage. That being said, there are important items you may want to consider when applying for a home loan.

  • Revenue Stability: Volatile swings in revenue are not generally persuasive. Lenders tend to like steady and positive growth reflected in your business and personal earnings.
  • Tax Returns Matter: This can be particularly problematic for people who find creatively legal ways to make revenue tax exempt. Home offices and company cars can lower your taxable income, but they also reduce your ability to pay the mortgage, at least on paper. Plan ahead by strategically filing strong earned-revenue tax returns.
  • Consistency Matters: There are a few ways to demonstrate consistency. It can be level monthly earnings or multiple years of tax returns in the same business. Your income may only be considered if it fluctuates in a way that frightens lenders.
  • Good Credit: Some cash-oriented people tend to discount the value of credit scores. The adage that “cash is king” may apply to the down payment, but a poor credit history can hurt your chances with lenders. Think “credit is king” when applying for a home loan.

Being self-employed does not mean you are at a strategic disadvantage when applying for a mortgage. But keep in mind that the home loan review can be slightly different. As always, your best next step would be to consult with your trusted home mortgage professional to go over your personal situation.

12
Aug
By support
Mortgage Tips

Three Proven Ways You Boost Your Credit to Get a Mortgage Approved

These 10 States Have The Biggest Mortgage DebtCredit problems are unfortunately common, and they can make it difficult for you to obtain a mortgage. Even if you are able to obtain a mortgage with your credit issues, the rate may be rather high in comparison to what you may qualify for if you obtain a mortgage without fixing your credit problems. While some issues may take a while to fix, you may be able to see a decent increase in your credit rating when you follow a few easy steps.

Pay Off Outstanding Derogatory Credit Items

When you review a copy of your credit report, you may notice that some items have an outstanding balance due. If the account is in good standing, the outstanding balance is not a primary issue unless you have an excessive amount of debt. If the account is not in good standing, such as if you have a series of late payments or a collection account being reported on the credit report, you can see a boost in your credit rating when you pay off these debts.

Settle Judgments

Legal matters can also be reported on your credit report, and they may be settled or still outstanding. An example of this would be if an electrician serviced your home, and you did not pay the bill. The electrician could file a lien against you. A settled judgment may still be a ding on your credit rating, but it is far better than having an unsettled judgment. If you notice that you have a judgment reported on your credit report, you may consider taking the necessary steps to settle it and get back in good standing.

Pay Off Small Balances

If you can afford to do so, it can improve your credit rating to pay off small balances. A portion of your credit rating will be determined by the number of open accounts and the number of accounts with balances that you have. By focusing on the small balances, you can often see a quick improvement in your credit score. There may also be a benefit to closing these accounts after they have been paid off.

Before you apply for a mortgage, it is wise to request a copy of your credit report. You want to remove any items that you find on the report that do not belong to you. For those derogatory items that are yours, you can follow these steps to help improve your credit rating with fast results.