How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

Home
>
Credit
>
How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower's income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It's important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it's safe to assume that as the consumer's credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit ? sometimes referred to as "sub-prime" ? can range anywhere from A-minus, B-paper, C-paper or D-paper loans.

If you have already taken out a mortgage loan with a higher interest rate because your credit score was a little under par, you will really appreciate the value in doing a little work to improve your credit score. Refinancing from a D-paper loan to a B-paper classification can save literally thousands of dollars in financing fees over time, even though the B-paper loan is still considered sub-prime.

A qualified mortgage consultant will guide you through the nuances of the process of improving your credit score to refinance and save money. First and foremost, he or she will want to review the terms of the existing mortgage loan to determine if you have a pre-payment penalty clause written into your contract. In general terms, that means that if you sell the home or try to refinance before the pre-payment penalty expires and you have not already paid off 20 percent of the original loan amount, you will most likely have to pay a 3 percent fee back to the lender to compensate for the high risk and high costs incurred to provide that financing.

Next, you should obtain free copies of your credit reports from www.annualcreditreport.com and start working on improving the credit score six months prior to the expiration date on your existing pre-payment penalty.

There are five factors that make up the credit score and your mortgage consultant can coach you through some basic strategies to improve your credit score. This means very conservative use of credit cards, paying off debt as much as possible and not applying for additional credit cards unless you will benefit from such action. You will want to verify that negative items you have paid off are being removed from your credit report, and that good credit history is being reported to all three bureaus. You'll also want to dispute any errors that appear on your credit reports and seek to have those removed entirely.

Once your credit score improves, it's time to refinance at a better interest rate. Your mortgage professional should look for a program that carries no more than a two-year prepayment penalty so you can continue to refinance as your credit score increases. You can repeat this process until you reach A-paper status and secure the best interest rate available.

This is a strategy that also works well for first time home buyers who do not have enough credit history under their belt to get an A-paper loan at the time of purchase. The important thing is to work with a mortgage consultant who can give you a roadmap to follow and a strategy for success in building personal wealth.

Jansen Drake is affiliated with 1st Metropolitan Mortgage, A Georgia Residential Mortgage Licensee 15506. For free consultation and a copy of The Certified Guide to Credit Scoring, call Jansen at 678-388-1755 or go to http://www.catquickloans.com

In The News:

CREDIT MARKETS: Possible Greece Euro Zone Exit Captivates Markets
Wall Street Journal
By DOW JONES NEWSWIRES Fresh worries about the fiscal stability of the euro zone dominated market action Wednesday, as market participants fretted about the possibility of Greece's exit. The fears sent investors into safe-haven assets, ...

and more »

USA TODAY
Ford credit rating boost: 'The Blue Oval is back'
USA TODAY
Moody's also said its outlook for Ford and Ford Credit is stable. The decision appears to vindicate the company's bold but risky decision in 2006 to borrow the staggering $23.4 billion that Mulally often referred to as "a little home improvement loan.
How Ford's Credit Upgrade Helps ShareholdersTheStreet.com
Ford regains assets, including blue logo, after credit upgradeCBS News
Ford credit rating upgrade wins back iconic oval logo pledged awayLos Angeles Times
The Detroit News -Seeking Alpha -Huffington Post
all 401 news articles »

Go Banking Rates
Free and simple ways to view your credit
Fox Business
By Doresa Banning Improving your credit is a great way to better your overall financial standing. But tackling this task first requires knowing where your credit stands. Many of the online offers you see for free or $1 credit scores come with strings ...
Consumers Getting Savvier About Credit ScoresNew York Times (blog)
Action Line: Secret revealed: credit score is not a credit reportSan Jose Mercury News
Getting back to our old (good) credit scoreMarketplace.org
Go Banking Rates -Auto Credit Express (blog) -Huffington Post (blog)
all 13 news articles »

MTV.com
Phillip Phillips Won't Take Credit For 'Home' At 'American Idol' Finale
MTV.com
'It's not really something I would write, so I'm excited to get my own stuff out there,' he tells MTV News. By Kara Warner (@karawarner) , with reporting by Kelly Marino As has been his MO throughout this 11th season of "American Idol," Phillip ...
American Idol: Phillip Phillips Delivers "Brilliant" Finale PerformanceUs Magazine
American Idol Finale Part 2TVOvermind

all 2,041 news articles »

Credit Suisse Reduces Estimates For Brazil Currency, Inflation
Wall Street Journal
SAO PAULO (Dow Jones)--Credit Suisse's economic research department revised a slew of forecasts for the Brazilian economy Wednesday to reflect global uncertainty and local authorities' preference for a weaker currency and lower interest rates.
New Dow Jones Credit Suisse Hedge Fund Index Commentary Offers Insight into ...MarketWatch (press release)
Dow Jones Credit Suisse Hedge Fund Index finished April with only 4 out of 10 ...Opalesque

all 12 news articles »

TEXT: S&P Puts A- Corp. Credit Rtg For Dun & Bradstreet On Watch Neg
Reuters
As a result, we are placing our 'A-' corporate credit rating on D&B on CreditWatch with negative implications. Rating Action On May 23, 2012, Standard & Poor's Ratings Services placed its 'A-' corporate credit rating on Short Hills, ...

and more »

Pardot Gets SaaS Credit Line From Silicon Valley Bank
MarketWatch (press release)
ATLANTA, GA, May 24, 2012 (MARKETWIRE via COMTEX) -- Pardot received a line of credit today from Silicon Valley's premier lending group, adding fuel to one of the fastest growing cloud software providers in the industry. Silicon Valley Bank, financier ...

and more »

Globe and Mail
TEXT-Fitch may raise Home Credit & Finance Bank ratings
Reuters
(The following statement was released by the rating agency) May 23 - Fitch Ratings has placed Russia's Home Credit and Finance Bank's (HCFB) Long-term Issuer Default Ratings (IDRs) of 'BB-' on Rating Watch Positive (RWP). A full list of rating actions ...
Fitch Cuts Japan's Credit RatingFox Business
Fitch downgrades Japan's credit rating because of ballooning government debtWashington Post
Fitch cuts Japan's credit rating, cites huge debtSydney Morning Herald
MarketWatch (press release) -Washington Technology
all 350 news articles »

Newsday
Two agencies downgrade Suffolk's credit
Newsday
Suffolk Newsday > Long Island > Suffolk Print Aa Two agencies downgrade Suffolk's credit Originally published: May 23, 2012 8:17 PM Updated: May 23, 2012 10:54 PM By RICK BRAND rick.brand@newsday.com Two Wall Street rating agencies Wednesday downgraded ...

and more »

S Korea 1Q Household Credit Declines For First Time In 3 Years
Fox Business
SEOUL – Outstanding household credit in South Korea recorded its first quarterly decline in three years in the January-March period, as a sluggish housing market and year-end bonuses reduced the need for borrowing, the Bank of Korea said Thursday.
S.Korea end-March household credit growth at 2-1/2-yr lowReuters
S. Korea's household credit dips in Q1Yonhap News

all 5 news articles »

Google News