Tag Archives: loan

girl with credit card

Three Credit Cards: A Must For Every Person

There are many people that say don’t have credit cards, credit cards are bad, and similar statements that bear no wait. These people are either not in control of their spending, or do not know the value and need of having credit cards. ‎It is essential for everyone to have a few lines of credit under their name .

Having credit cards build your credit history. The longer you have a credit card, the longer history there will be on your credit report. A longer credit history will have a direct impact on your credit score. When applying for your first credit card make sure it’s a “no annual fee credit card”, this will ensure you can build credit history for years to come without paying any fees.

Car loans, leases, mortgages are also ways to build your credit history. However, the easiest way to build your credit history is with credit cards. Most people are able to get a credit card with little to no credit. ‎Month by month they build their credit history which will raise their credit score.

Credit cards are the easiest way to build a credit history. Credit cards are the easiest line of credit you can open. Having three credit cards is required to apply for a mortgage with many .

Your credit history and your credit score ‎are very important. In order to get your next credit card, car loan, lease or mortgage, you will need to have a good credit history. They work hand-in-hand.  In order to get a loan you need credit history, and once you have your loan it will build your credit history.

Mortgage companies require you to have three lines of credit under your social security number. Being an authorized user or a joint card holder on another person’s card will not be counted as a line of credit under your name. It is integral for everyone to open up a credit cards under their name as soon as they can, to begin building their credit history. The earlier the better.

Don’t listen to the foolish people that say having a credit card you will not to be in control of your finances. Most credit cards have programs that track your spending showing you where you spend your money, and how much money was spent in each category. ‎This is an amazing tool while budgeting to know what purchases need to be cut out.

Are scared that by having a credit card you will just swipe away and not keep track of your purchases? Get a credit card and don’t use it. This will enable you to have that open line of credit and build your credit history without putting you into hock.

Read these other hot topics!

Late Payment Removed From Your Credit Report (4 Ways)

Chip and PIN cards – Credit Cards Move To The Next Stage Fighting Fraud

Credit Inquiry: Hard Pull Vs Soft Pull

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

It is integral to have a few credit cards open to begin your credit history.

rss feed email twitter facebook Sharethis
dream house design, dream house

Breakdown Of Your Monthly Mortgage Payments

We discussed PITI Payments are. In short it is the total payments due on your mortgage.  To recap:

PITI Payments is the components of a mortgage payment.

PPrincipal is the money used to pay down the balance of the loan

IInterest is the charge you pay to the lender for the privilege of borrowing the money

TTaxes refer to the property taxes you pay as a homeowner

I – Insurance refers to both your property insurance and your private mortgage insurance  and homeowners association fees if applicable.

Just bought your house?

What does my mortgage bill look like?

Your mortgage bill will include all of these numbers. You will be making one payment to your bank and they will make the Taxes and Insurance payments for you.

How does that work?

What happens is your bank opens an escrow account for you. Every time that you make your monthly payments, it goes into escrow. Lets make up some numbers.

Mortgage $400,000 @ 4% will equal monthly to ~ $1,900 ($1,909.66, based off of $576.33 in principle and $1,333.33 in interest)

Taxes $12,000 will equal monthly to $1,000

Insurance $1,200 will equal monthly to $100

When your bill arrives all of these charges will be consolidated into one charge of $3,000. When you pay the bill the bank will keep $1,900 of the money and put the other $1,100 into your escrow account. Then would then pay the property taxes quarterly. so after 3 months of collecting your $1,000 taxes they would then ship off $3,000 to your county to cover the property taxes on your home.

The same is true with the insurance on the house. The bank collects the insurance payments from you, and then pays the insurance company the monthly premiums. This setup is great in my opinion. instead of needing to worry about every payment on the house, the bank takes care of it for you.

So, when you hear your friend saying he has a $3,000 mortgage you know that only $575 is actually going to pay off his house and building equity. Pretty depressing if you think about it!

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

PITI Payments is all the payments lumped together into one monthly obligation.

rss feed email twitter facebook Sharethis
discrimination.jpg.size.xxlarge.letterbox

Lender Discrimination: What Is That?

portal.hud.gov hudportal documents huddoc id NFHA2012MaternityLendingEN.pdf

“Lender Discrimination was not what I was expecting.”

What is lender discrimination? Were you a victim? What should you do? I once saw an ad inn the mall of a pregnant woman, the caption was “Lender Discrimination was not what I was Expecting“. The caption summed up the advertisement. A lender may NOT deny loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion. One of the most notable instances of widespread mortgage discrimination occurred in United States inner city neighborhoods from the 1930’s up until the late 1970’s. There may be evidence that the practice of lender discrimination still continues in the United States today.

How can You protect Yourself from lender discrimination?

Look for the warning signs, some include:

  • You are treated differently in person than on the phone.
  • You are discouraged from applying for credit.
  • You hear the lender make negative comments about race, national origin, sex, or other protected groups.
  • You are refused credit even though you qualify for it.
  • You are offered credit with a higher rate than the one you applied for, even though you qualify for the lower rate.
  • You are denied credit, but not given a reason why or told how to find out why.
  • Your deal sounds too good to be true.
  • You feel pushed or pressured to sign.

If You Suspect Discrimination

Take action if you think you’ve been discriminated against.

  • Complain to the lender. Sometimes you can persuade the lender to reconsider your application.
  • Check with your state Attorney General’s office to see if the creditor violated state laws: Many states have their own equal credit opportunity laws.
  • Consider suing the lender in federal district court. If you win, you can recover your actual damages and be awarded punitive damages if the court finds that the lender’s conduct was willful. You also may recover reasonable lawyers’ fees and court costs. Or you might consider finding other people with the same claim, and get together to file a class action suit.
  • Report any violations to the appropriate government agency. If your mortgage application is denied, the lender must give you the name and address of the agency to contact.

“Lender Discrimination was not what I was expecting.” This was the caption under an advertisement i saw in a mall. It was educating the public about Lender Discrimination.

File a Complaint with the appropriate offices.

For ECOA violations:

Consumer Financial Protection Bureau

855-411-2372

For FHA violations:

U.S. Department of Housing and Urban Development (HUD)

1-800-669-9777; TDD: 1-800-927-9275

For details about the Fair Housing Act, contact Office of Fair Housing and Equal Opportunity.

You have one year to file a complaint with HUD, but you should file as soon as possible.

MORE WAYS YOU CAN PROTECT YOURSELF

  • Do your research. Shop around. Learn about the various features and downsides of the credit product you want. Research the current interest rates. Compare products from several lenders.  Talk to your friends and family members about their credit products.
  • Know your credit history. Creditors will make decisions based on your credit history. Be sure there are no mistakes or missing items in your credit reports. Get a free copy of your credit report from each of the three biggest consumer reporting agencies every 12 months. Get your free copy from AnnualCreditReport.com.
  • Ask questions. Don’t focus only on your monthly payment. Be sure you understand the rates and fees you will pay over the long run. Ask whether the rates and fees quoted to you by your lender are set, or if there are any circumstances in which the quoted rates and fees could change. Keep asking questions until you are fully satisfied. If a creditor does not want to answer your questions, this could be a bad sign.
  • Stay in control. Your lender shouldn’t make you feel rushed, or unnecessarily delay action on your application. Walking away and continuing the discussion later, if you so choose, is a good way to control communications with the lender.
  • Don’t sign until you’re satisfied that the credit product works for you. Remember, the product that works for you today may not work for you down the road. Make sure you’ve considered both before you sign.

HT: Wikipedia, Consumer Finance and Government websites.

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

We aware of Lender Discrimination,and what to do if you are a victim.

rss feed email twitter facebook Sharethis
29807-424x283-Nonconformingloanap

What is an Underwriter?

Underwriting can have many meanings depending on the context it is used in. There is underwriting of a loan or mortgage, there is underwriting by a life insurance policy and there is Forensic underwriting. Today our main point we will discuss is the underwriting used in reference to a mortgage.

An underwriter is someone who reviews all your financial information and determines if you are a risk for the lender to issue you a loan.

Mortgage Underwriting

Mortgage underwriting is the process a lender uses to determine if the risk (specifically the risk that the borrower will not have the funds to pay) of offering a mortgage loan to a particular home buyer. Most of the risks and terms that underwriters consider fall under the three C’s of underwriting: credit, capacity and collateral.

What is the Process?

  •  Verification of such items as employment history
  • Salary and financial statements
  • Borrower’s credit history (which is detailed in a credit report)
  •  Lender’s evaluation of the borrower’s credit needs and ability to pay.

By judging these factors the lender will have an idea if they should approve you for your loan. Each lender has their own set of guidelines based off of the Freddie Mac and Fannie Mae. What the Debt to Income ratio can be and minimum salary’s. Read more of our latest series of Home Buying.

View our home buying series here: Mortgages, Home Loans, Refinance, and Interest

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

The underwriter is someone who reviews all your financial information and determines if you are a risk for the lender to issue you a loan.

 

rss feed email twitter facebook Sharethis
6070416_orig

Home Equity. What It Means

Home equity is your share of the value of your home. It’s what you truly “own” versus the part that is owned by the bank. To make it easy to understand we will give an example. Let’s say you bought a home for $250,000 and put down $30,000. Then your equity will be only $30,000 not the full value of the house.  A few years down the road you already paid part of your mortgage of $50,000, but most of that went to interest. Only the part that went towards the principle will be counted as equity. Suppose $20,000 went towards the interest then you would have amassed a total of $50,000 in equity.

Another way to amass equity

Equity can also grow if the value of your house goes up. Using the numbers above, and the value of your home increases to $300,000, your total equity would be $100,000 ( $50k for the increase of value, $30k of a down payment, 20k in monthly payments.)

Watch your equity grow every month with your monthly payments. Use a mortgage Calculator that shows you how much money is going toward your equity.

Equity is the total value of your house that you own. Only the part of the mortgage that goes towards the principle would build your equity. Interest payments do not build equity.

Why is Equity important?

Equity is an asset, so it’s a part of your total net worth. You can spend it someday if you need to. You might use it to buy your next home, to fund your retirement, or to pay for a child’s education. It’s a very large and important asset.

View our home buying series here

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

Equity is the value of your home.

rss feed email twitter facebook Sharethis
how-to-buy-a-home-snippet

Mortgages, Home Loans, Refinance, and Interest

We will begin a new series today on Home loans. We will cover many topics from what to look for in buying a house through the home buying experience all the way to refinancing years later.

Here are some of the topics we will discuss. Bookmark this page as we will link back to all these topics once they are written.


And many more topics. Stay tuned!

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary

Stay tuned to learn more about buying a home.

 

rss feed email twitter facebook Sharethis
55735014

Why You Should Have More Then One Credit Card

Having credit cards is very important. I hate when people tell me they don’t have credit cards because all it does is make them debt. There is an easy solution, apply for the card and cut it up. Having a credit card is important even if you don’t use it. As a matter of fact your credit score likes when you have a low credit utilization. Get those credit cards!

Why is having credit cards so important?

Credit cards build a health relationship with your bank. Did you ever call a bank? They always say thank you for being with us. True, that is what their customer service department told them to say, but the bank knows you as a customer if you were to need their services at a later date.

Why should I get more then one?

I have 1 credit card, do I need more? The answer is yes. I was looking into mortgage options the other day, seeing the rates, costs and other factors that may affect home buying. One of the loan officers asked me if I have 3 lines of credit. He wanted to make sure that I had more then one credit card under my name. This is very important for getting a mortgage. You will need more then one credit card. (Too much utilization is no good, but credit is good). Besides, credit cards without annual fees are free. Why wouldn’t you get more then one?

Meeting with a Loan Officer

Image HT: The Nest

Read these other great topics!

Business Card Benefits: How A Business Card Impacts Your Credit Score

Credit Score: How To Fix A Poor Credit Score

FACO Credit Score FICO Score: What’s The Difference?

And don’t forget to follow us on Twitter to be entered into our $50 Giveaway!

In Summary:

Have more then one credit card in you pocket, it will help you get a mortgage.

 

rss feed email twitter facebook Sharethis