Kevin P. Nguyen

Equity Zone Mortgage-Elk Grove, California

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage Rate

by

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage RateIs your credit score holding you back from getting the best rate on your next mortgage? The good news is that there are actions that you can take to increase your credit score and improve the interest rate offered on your next home loan.

Here are a few easy and effective tips to help you get your credit score to where you want it to be.

Increase The Amount Of Credit Available To You

The easiest way to increase your credit score is to increase your credit limit, as this reduces your utilization ratio. To do this, you can either apply for another credit card or ask a current credit card provider to increase your credit limit. Those who have a stable income and have made their monthly payments on time should have no problem getting an increase of their credit limit.

Pay Down The Balances On Your Credit Card

Paying down your credit card balances can help you increase your credit score, as a large portion of your score is determined by the percent of available credit that you are using. Ideally, you want each card balance to be under 30 percent of the total limit while also keeping your total credit usage to less than 30 percent of available credit. A utilization ratio under 30 percent tells lenders that you can manage credit responsibly.

Settle Past Due Debts

Roughly one-third of your credit score is determined by your ability to make payments in a timely manner. If you have any payments that are 30 or more days past due, you may wish to settle those debts or make arrangements to pay them.

Creditors who allow you to roll past due payments back into your loan may update your credit report to say that you are current on your payments. This could have a huge impact on your credit score and help you qualify for a better rate on a home loan.

Increasing your credit score is one of the best ways to get the best rate on a mortgage. This may enable you to gain additional leverage when negotiating for a better rate that may lower your monthly payment to a more affordable level.

For more information about how to get a great mortgage rate for your next home purchase, or for advice on how to improve your credit score, contact your local mortgage professional today.

Three Ways That Your Credit Score Affects Your Mortgage and Your Chance of Obtaining One!

by

Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)If you’re thinking of buying a home, you’ve probably been thinking a lot about your credit score as well. Credit scores control so much of what we do in the world of finances, but what does your credit score really have to do with your mortgage? Here are three ways that your credit score could impact your mortgage application.

Your Credit Score Affects Your Ability To Get A Mortgage

The first thing your credit score tells a lender is whether they should lend to you at all. In some cases, if you have a very low credit score, you may not be able to obtain a mortgage at all.

Different lenders will have different criteria for determining safe and unsafe lending situations. Typically, if you have a score below the 600 mark, you’ll have trouble obtaining a mortgage.

If you’re worried about a low credit score, don’t despair – you can still get a mortgage, you just might have to work a little harder to get one. Some lenders will still lend to people with lower credit scores (just make sure you’re approaching legitimate lenders and not mortgage scam artists). Or, if time is on your side, you can work toward building up your credit score so that when it comes time to take out a mortgage, your score will be more appealing to lenders.

Your Credit Score Affects What Types Of Mortgages You Can Obtain

The second thing a lender learns from your credit score is which types of mortgages you qualify for. If a lender sees you as a higher risk, they won’t necessarily be willing to offer you just any old mortgage.

In most cases, if you have a credit score of less than 620, you won’t qualify for a conventional mortgage. In addition, if you have a lower credit score, you may have to make a larger down payment in order to qualify for the type of mortgage you want.

Your Credit Score Affects Your Interest Rate

The final thing that a lender learns from your credit score is what type of interest rate they’re willing to offer you. As a general rule, the higher your credit score, the lower the interest rate.

However, just because you have a high credit score, that doesn’t mean you’ll automatically get a great mortgage rate. There’s more that goes into the price of a mortgage than just the interest rate, so watch out for additional factors like extra fees, mortgage insurance, lock-in periods, and so on.

Your credit score tells a lender a lot about what type of borrower you are. Ultimately, a higher credit score means that you’ll be able to borrow money at a lower interest rate. But if your score is low, don’t worry – there’s a lot you can do to bring up that score before you apply for a mortgage, so don’t throw in the towel just yet!

Every financial situation is different, so if you want to find out more about how your credit score will affect your mortgage in your specific circumstance, talk to your mortgage professional.

Shopping Around: How to Compare Mortgages from Different Lenders or Underwriters

by

Shopping Around: How to Compare Mortgages from Different Lenders or UnderwritersBuying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.

The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.

In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.

Start By Comparing Interest Rates

The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.

While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.

Get An Estimate Of Your Total Closing Costs

While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.

Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.

Watch Out For Early Payment Penalties

Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.

You may find that comparison shopping can be a bit overwhelming with so many different mortgage options, terms and interest rates to choose from. If you have questions or you need help sorting through it all to determine which mortgage suits you best, contact your local mortgage professional today to book a quick consultation.

Setting Your Budget: How to Analyze Your Finances to Determine How Much Mortgage You Can Afford

by

Setting Your Budget: How to Analyze Your Finances to Determine How Much Mortgage You Can AffordWhether you’re buying a home for the first time or you’ve decided it’s about time that you upgraded to a larger, more expansive house, if you’re making a real estate purchase you’ll need to be aware of how much you can reasonably afford to borrow in a mortgage. In today’s post we’ll take a look at a few ways that you can analyze your financial situation to help decide how much mortgage you can truly afford.

Prepare An Honest Monthly Budget

The first step in understanding how much of a monthly payment you can afford is to create an honest monthly budget which includes all of your family’s income and spending. Although you won’t have to pay them every month, it’s also important that you include costs that show up irregularly like car repairs, Christmas gifts or tuition bills as these still need to be paid. The more information you can place in your budget, the more accurate your financial picture will be.

Your Down Payment Plays A Huge Role

As you might imagine, the amount you can invest in your down payment plays a significant role in how much mortgage financing you will need. Every dollar that you can place in your down payment today is one less dollar that you’ll need to borrow and pay interest on over the amortization period of your mortgage. Take some time to consider how much you can put down, and see if there’s any way you can bump this figure a bit higher.

What Interest Rate Will You End Up Paying?

Small changes to your mortgage interest rate can have significant impacts on how much you are required to pay back over the life of your mortgage. As you’re shopping around, be sure to consider how long your interest rates are valid for and try to determine the lowest rate you might qualify for. You may also find it helpful to use an online mortgage calculator which can help you to understand how your interest rate impacts your monthly payments.

Consult A Mortgage Professional To Learn More

While building a quick budget to analyze your family’s expenses is easy, factoring in all of the various items that a lender will consider might be harder than you expect. If you have questions about the mortgage process and whether or not you’re ready financially, contact your local mortgage professional today.

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage Rate

by

FICO Scores and Your Mortgage: How to Bump Your FICO Score to Secure a Better Mortgage RateIs your credit score holding you back from getting the best rate on your next mortgage? The good news is that there are actions that you can take to increase your credit score and improve the interest rate offered on your next home loan.

Here are a few easy and effective tips to help you get your credit score to where you want it to be.

Increase The Amount Of Credit Available To You

The easiest way to increase your credit score is to increase your credit limit, as this reduces your utilization ratio. To do this, you can either apply for another credit card or ask a current credit card provider to increase your credit limit. Those who have a stable income and have made their monthly payments on time should have no problem getting an increase of their credit limit.

Pay Down The Balances On Your Credit Card

Paying down your credit card balances can help you increase your credit score, as a large portion of your score is determined by the percent of available credit that you are using. Ideally, you want each card balance to be under 30 percent of the total limit while also keeping your total credit usage to less than 30 percent of available credit. A utilization ratio under 30 percent tells lenders that you can manage credit responsibly.

Settle Past Due Debts

Roughly one-third of your credit score is determined by your ability to make payments in a timely manner. If you have any payments that are 30 or more days past due, you may wish to settle those debts or make arrangements to pay them.

Creditors who allow you to roll past due payments back into your loan may update your credit report to say that you are current on your payments. This could have a huge impact on your credit score and help you qualify for a better rate on a home loan.

Increasing your credit score is one of the best ways to get the best rate on a mortgage. This may enable you to gain additional leverage when negotiating for a better rate that may lower your monthly payment to a more affordable level.

For more information about how to get a great mortgage rate for your next home purchase, or for advice on how to improve your credit score, contact your local mortgage professional today.

Is a 40-Year Mortgage Worth It? How to Decide Whether or Not This Longer Term is Right for You

by

Is a 40-Year Mortgage Worth It? How to Decide Whether or Not This Longer Term is Right for YouThere are different timetables for mortgages. The most common types are 15-year and 30-year mortgages. However, a mortgage broker can establish unique timetables for a homeowner, such as a 40-year mortgage.

Friends may recommend going for a long-term timetable, but what do professionals think of a 40-year mortgage? Here is what you may want to consider to see if a 40-year mortgage is appropriate for you.

The Monthly Rates Will Be Low

Compared to a 15-year or a 30-year mortgage, the monthly payments for a 40-year mortgage will be lower. Since the mortgage is spread over 10 years beyond a conventional 30-year mortgage, homeowners will see much lower mortgage payments per month. This can be very attractive for homeowners who need to control their housing costs per month.

Long Term Costs

But, many brokers will tell a homeowner the extra 10 years is not worth it. Because the homeowner will need to pay interest rate charges each month for 10 extra years beyond the typical 30-year mortgage window, the homeowner will end up paying more in interest for a 40-year mortgage. Even with a low, fixed interest rate, homeowners are still extending their home payments by a whole decade, which will add up in the end.

Always Fixed

Under housing laws, a 40-year mortgage must always be a fixed-rate mortgage. This can be attractive for many homeowners since it guarantees that the mortgage payment per month will be the same for the next 40 years. For those on a budget, knowing ahead of time what they owe per month for 40 years can help them prioritize their payments.

Home Of One’s Dreams

Since the 40-year mortgage will calculate as a lower monthly payment for an already credit qualified candidate, a broker will be more willing to offer a larger mortgage to the candidate. This means that many people who utilize the 40-year mortgage have a larger pool of homes to choose from. Of course, it is important to find a home within a reasonable budget.

Understanding the ramifications and specific issues with a 40-year mortgage can help a homeowner candidate better decide if it is right for them. Like any housing finance option, there are advantages and disadvantages, so knowing how the 40-year mortgage works is important. This information should enhance the home shopping experience and help the candidate and the broker find the best home under the most appropriate financing option.