Mortgage Loan APR Rate and Credit Score

Posted on January 10, 2012 by admin

One’s credit rating does in fact have a large bearing on the mortgage interest rate set for a mortgage loan. One of the first things that any bank or credit union will ask for is a person’s credit score. A person who has a very poor credit score may be denied a mortgage loan outright. In other instances, a bank may grant the loan but attach a high interest rate to the mortgage.

The average mortgage rate for a good credit mortgage loan is about 4%. A four percent APR rate means that one will need to pay an additional $4,000 for every $100,000 that he or she borrows. On the other hand, a person with bad credit should expect an APR of anywhere from ten to fifteen percent. This means that one will end up paying an additional $10,000 to $15,000 for every $100,000 that he or she borrows.

When one considers the fact that the APR rate for a bad credit mortgage is more than double the APR rate for a mortgage loan given to a person with good credit, it is obvious that a wise person should work to improve his or her credit before applying for a mortgage loan. However, one should also consider that there are various factors that determine how high one’s APR rate will be. Interest rates vary from state to state and even city to city, so the location where one lives will have a bearing on how high or low the APR will be. Some lenders offer lower interest rates on mortgage loans than others, so it is often a good idea to shop around a bit and see which lender offers the best deal.

Two other factors that determine how high or low the APR will be is the type of loan one takes out and the size of the down payment. Even a person with poor credit can get a reduced interest rate if he or she can put down a sizable down payment. The faster one can pay off the loan, the lower the interest rate will be. The average interest rate on a 15 year mortgage loan is about 3.20% while the interest rate on a 30 year mortgage loan is currently 3.80%. This means that a person who takes out a 30 year mortgage loan will have to pay .60% more interest than a person who takes out a 15 year mortgage loan. This comes out to about $600 dollars more for every $100,00 that is borrowed.

A person taking out a mortgage will naturally want to get the lowest possible APR rate. While there are several factors that will determine how high or low one’s interest rate will be, a person’s credit score is a major factor that lenders will take into consideration. A wise home buyer will want to do everything possible to improve his or her credit rating before taking out a mortgage loan, as this can help one to save a considerable amount of money.

For further info about mortgage interest rates and credit scores, visit this article: Credit Rating And The Mortgage Difference

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Credit Reports and Divorce

Posted on January 10, 2012 by admin

No matter what your life circumstances, you should always have your own credit. If you’re married, the relationship might end. It can happen through divorce, whether friendly or unfriendly, or death. If you don’t have your own credit history, life can be very difficult.

If you don’t have your own credit established and are considering divorce, get to your bank immediately. This is the best place to start because you have some relationship with the bank even if you have never set foot in the building. Take the opportunity to open accounts in your own name. Open both a savings and checking account, and start saving every penny you can. Your spouse can’t, legitimately, get any information about your account or even the fact it exists.

The next thing you need to do is apply for a credit card in your own name. Your bank should offer one, and that is probably the best place to start establishing your own credit. One you have taken care of these two issues, talk to your bank’s financial adviser and get any advice you can.

One thing you need to do is get copies of all your credit reports. If you don’t know what a credit report is, you need to learn. There are 3 credit bureaus: Equifax, Experian, and TransUnion. Each creates its own credit score, and one bad score can cause problems. Each has its own way of presenting the information and calculating your credit score. You can obtain a free credit report from them once an year.

If you have already begun the divorce process, or the divorce is final, the problems can be more difficult. You probably need to consider signing up with a company that lets you look at all three of your credit reports as often as you need to. You need to keep up with all joint accounts until they are at a zero balance at which time you can remove your name from the account.

If your spouse has been ordered to pay on the accounts, keep a close eye on the status of each one by checking your credit files often. In the event your spouse is cooperative, simply remove your name from any accounts you can, so the debt no longer appears on your credit report.

It will take some time to separate your credit life from that of your spouse’s. Take the time to contact each credit reporting agency, and request that a consumer statement be put on the account that explains the fact there has been a divorce, and your spouse has been ordered by the court to pay the debt or debts if that is the case.

If you have debts that are your responsibility, do your best to take care of them. You may cause your spouse harm by destroying his or her credit, but yours is going to suffer, as well. It’s really not worth it. A good credit score will serve you better than sticking it to your spouse.

It takes time but, in the end, if you persevere and do everything you need to do, your credit report will recover, and you will have your life back.

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Credit Score Not Essential To Obtain Student Loans

Posted on January 10, 2012 by admin

Attending college is very important in today’s society. If you want to find a high-paying job, you need to show employers that you are a dedicated individual that took time to get their degree. Pursuing a degree can be challenging and expensive if you do not have money set aside to pay for your tuition. While most two-year and four-year institutions offer federal financial aid packages, these awards are not nearly enough to pay for your housing expenses, books, and tuition. If you have reviewed your financial aid package and you know you need more money to make it through school, it is time learn about student loans. There are several types of student loans out there. Learn which ones you might qualify for and live comfortably through school.

Credit Score and Student Loans

If you do not need a large sum of money, you may want to start with Federal loans. Federal loans are the safest and most practical choice for adult students and students who are just exiting high school. Unlike conventional loans offered by private lenders, federal loan interest rates do not change over time and the interest charged is not determined by your credit score. There are currently three types of Federal loans available to undergraduate and graduate students:

Start With Federal Loans

Perkins and Subsidized Stafford Loans - If your school offers subsidized loans and you qualify for this type of loan it is the best option for you. If you qualify for these student loans, the government will pay for the interest that accrues while you are in school. The Perkins Loan interest rate is fixed at 5 percent when you are out of school and the Stafford loan is fixed at 6.8 percent or less depending on the market. You will appreciate that the government pays the interest because you will save thousands of dollars so you can pay off your student debt faster when you are employed.

Unsubsidized Stafford Loans - These loans are the next best option if you do not qualify for the subsidized loans or your school does not offer the prior option. Unsubsidized Stafford Loans are available to anyone regardless of their income or credit rating. The interest will build up while you are in school at fixed interest rates that are listed on your loan contract. You do not have to start making payments to your loan until 6 months after you leave school.

PLUS Loans - If you are a graduate student or you are a dependent, you may qualify for a PLUS loan through the federal government. PLUS loans have have an interest rate of 8.5 percent but they are easier to qualify for than private student loans and have higher loan limits than the others.

Qualifying for Private Loans When Federal Loans Are Not Enough

The loan limits for first and second year students cap off at $3500 per year when you apply without a parent. The limits will rise to $4500 for students with 24 credits or more behind their belt. While these funds will help you in a time of need, they may not be enough to eliminate the need to work through college. This is where private loans come into play. Private loans are loans that are offered by lending institutions and banks who are making a profit off of the interest you pay. These alternative loans are much riskier than federal loans and do not offer as much protection as a federal loan. If you start at a time where interest rates are low, it is possible for your interest rates to rise while you are in school. Make sure you always apply for federal loans first and then get the additional funds you need through an alternative loan.

If you are attending a state university or a private school, the last thing you want to do is balance work and school. Put all of your focus on schooling by applying for student loans to pay for your cost of living so you can succeed in school. Make sure you apply for scholarships and grants before you apply for money that must be repaid. Follow the tips above and choose the safest loan package that will help you get through school.

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Checking All 3 Free Credit Reports Is Vital

Posted on January 10, 2012 by admin

Checking all 3 credit reports from the 3 credit bureaus is important since each credit agency may use different data from different creditors. Some of your creditors may only report your financial data to one credit bureau. So knowing what financial data each credit reporting bureau lists will help you figure out a plan to increase your credit score or retain the good credit you have worked to build. If you are denied credit, you may request a free copy of your credit files from the credit houses by filling out and returning the paperwork included in your loan denial. Or, you can get a free credit report once a year by requesting the information through The Federal Trade Commission’s Fair Credit Reporting Act. Simply visit their website to learn how to get your free reports. Additionally, you can purchase your credit files from the credit houses for a nominal fee by visiting their website. Whichever way you go about it, getting your credit reports and understanding them is essential to your financial well being. Get your credit files and start taking control of your finances today.

Keeping track of your credit reports is an important step in ensuring your financial independence and stability. Knowing what information is kept in your credit files can help you fight back on false claims, dispute items, correct information and can even help keep your identity safe. Reviewing your credit reports at least annually will help you identify any suspicious accounts or inquiries and alert you to potential problems such as financial fraud or identity theft.

Credit lenders, insurance providers, potential employers and landlords often use information provided in credit files to assess your suitability to meet lending, insuring, employing or housing requirements. Information found in files from the 3 credit bureaus most used by inquirers can vary greatly from one report to the next. It is critical you check all three of the major credit bureaus to dispute and inaccuracies, remove old items and get a full picture of your complete credit history and report.

Getting credit reports from 3 credit bureaus will give you a good idea of what kind of credit worthiness you have. Knowing what is on your records gives you the ability to negotiate better terms of lending if your reports reflect timely, full payments. Conversely, if your credit reports reflect untimely or less than payments in full, you need to know which items are holding down your scores the most and work on eliminating them and upping your credit score before you apply for a large loan. Additionally, knowing about delinquent, slow or disputed items on your credit reports can help you set important financial goals to clean up your credit report and get on solid financial footing.

Gaining access to your credit reports is easy. There are many online offers for pulling information from the 3 credit bureaus most used that will give you the information you need. Each report will come with information on how to read the report, what is included in the report, what steps to take if information is incorrect, how to dispute claims and when each item listed on your report is due to expire. In general, most collection or debts are dropped from reports seven years after they appear and bankruptcy will stay on reports for ten years. All open accounts will show on your credit report and will include information like highest balance and average balance and payment history in an easy to read format. Once you see your credit files in black and white, you will start to see how easy it is for lenders, employers, insurers and others to make a judgement on your creditworthiness from your credit reports.

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