Mortgage Information Advisor

If you ever applied for a credit card, personal loan or insurance, there is a file about you known as your credit report. This report contains information on you; your name, address, social security number, how you pay your bills.� It also shows if you have been tardy on your payments and even if you have been arrested.

In almost every financial transaction that involves a loan, credit scores are critical and come into play in determining the possibility of extending credit to you. Having a good credit report means that it will certainly be easier for you to get loans and lower interest rates whenever you need them. Lower interest rates usually translate into smaller monthly payments and saving your hard earned dollars on your most important financial matters. To the lending institutions, insurers and employers, having a bad credit report casts you in the shadow as being� untrustworthy, unable or unwilling to live up to the commitment of paying your bills or being branded a financial �deadbeat� which leads to the denial of credit.

Our spending habits and lack of financial control can be the reason why bad things happen to some people and believe me; one should not have to suffer for 7 to 10 years because of foolish financial errors we create unnecessarily.

If you have not established a good credit history, first consider applying for a credit card and use it prudently and make your payments on time. It would be wise for you to request from the institution that granted you credit to report your payment activity to the credit bureau, if they do, your credit history will be established and you are on your way. Now, consider doing this at least 3 or 4 more times and you will find that the longer you maintain good payment habits (on time) your chances of securing a mortgage loan will be augmented by your good credit.

On the other hand, you may consider a secured credit card which requires that you open and maintain a bank account or other asset account at a financial institution as a security for your line of credit. Your credit line represents a percentage of your deposit, typically 50 to 100 percent. Higher interest rates and application processing fees may be a factor in securing this type of credit.� If you do not qualify for credit on your own, ask a relative with excellent established credit history to co-sign an account for you. If this happens, it is incumbent upon you to make timely payments and pay off your account as soon as possible to demonstrate good credit worthiness that could serve as a critical factor when you apply for credit on your own.

In the next installment, we will take a look at credit scores, alternative credit and kinds of credit accounts that come into play with respect to securing credit extended to you. Without a positive credit history, the chances or securing a mortgage loan with favorable interest rates diminishes with lower credit scores.

Remember, a positive credit history is always an asset for you when you apply for a mortgage loan.

Charles A. Forrest, Affiliate Broker�
Related Real Estate Solutions
charles.forrest@homebuyersdirect.net

One of the greatest challenges faced by working people across America today is to have the ability to own and maintain our own home based on many critical factors, chief among which are credit scores, payment history, employment and financial ability. Many of us do not understand that unpaid bills are a critical factor in the denial of credit extension when we apply for a loan and are denied. Some people do not understand and when take for granted and renege on paying our bills, it can cause us to miss out on the opportunity for home ownership based upon data secured and maintained by the three main credit bureaus from our creditors.

Now, in order for you to secure a mortgage loan, it is always a great idea that you contact and work with a mortgage professional who knows the business, has a good reputation and excellent work ethics in the first place. Choosing an independent mortgage broker can be more advantageous to you because you can get individual attention and also the latitude of service can be more beneficial to you the borrower. Your mortgage professional will have more sources to work with, versus the banks that have their own systems and generally do not extend service for their clients beyond their establishments if they deem them not qualified for a loan.

If you are currently engaged in paying rent, owning your own home should be a priority for you right now. Sometimes we would be amazed to know that your mortgage note could be less, the same or slightly higher than your current rent when you secure a loan if only you would make up your mind to fire your landlord and pave the way for your home ownership. One of the fastest ways in creating wealth is through real estate and home ownership. When you think of your retirement, home ownership should be a priority in creating a stable cash flow in your golden years.

To ensure and maintain decent credit scores, it is critical that you pay your bills on time and pay attention to every detail in your credit report by ensuring that error and omissions are noted and corrected in a timely manner. Individual scores can range from 330 to 830, with a higher score indicating lower credit risk. A score in the 700s or higher is excellent, around 620 is a midrange score, and anything lower than 600 has room for improvement. The national average score is 676.�Having a credit score of less than 600 is no reason to give up on home ownership. A good mortgage broker can tailor a program for you to secure a mortgage even in the 500s, but your focus should be to create and maintain high credit scores.

In subsequent articles I will discuss critical aspects of your credit score.

With the advent of technological enhancements in the application process, you can make your application for a mortgage loan online and have it pre-approved in minutes in order for you to know how much to pay for your potential acquired property. Your entire application process can be done via the telephone, fax and even email. The idea that you must sit down with a mortgage rep is old fashioned and does not have to be that way. If documentation is proper and all is well, it is possible to have your loan closed in 10 to 15 business days by my team, after all mandated paperwork have been processed.

Take note that interest rates are beginning to surge forward again and clearly this is the best time for you to make that move for home ownership right now.

Charles A. Forrest,

Mortgage Broker
Related Real Estate Solutions
(865) 405-2591 or
charles.forrest@homebuyersdirect.net