Home Loan Expert Blog

Loan Expert Blog-How To Improve Your Credit Score

Tip for the week of 6/27/07

How can you improve your credit score?

It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.

Dont "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.

 Learn About Your Home Loan  

Learning about  a home loan does  not require a brain surgeon but failing to understand the loan you have or have been offered may cause a headache. Not all loan products will meet your needs.  In the name of affordability new loan products are both complex and confusing.

Today some borrowers who have obtained loans they did not understand may now have loans they cannot afford to repay. In this blog,  I will provide clients, their friends and associates my thoughts on loans and loan related issues. I will help you understand the loan you have or have been offered.  Learning about loan risk goes beyond loan rate. Please subscribe and stay tuned. Education is the best way to turn confusion into understanding.   

Mike Sedloff 

Loan Expert Blog  

Tip for the week of 6/25/07

Will you recieve the loan you have been promised by your lender? 

Recent interest rate increases may make loans not locked impossible to obtain. Is the loan your lender has promised truly locked? To protect yourself, ask your lender or broker to put in writing the terms, costs and lock expiration date of your loan lock.

Even locked loans may not be deliverable if they are not approved. Ask your lender or broker what documentation is needed to obtain final approval. Ask them whether any of the following are likely to be an issue in loan approval?

1) Income documentation

2) Your credit and/or credit score

3)Your reserves (Monies available for downpayment, closing costs or reserves)

4) Your property value and/or loan to value.

5) Owner occupancy

If these items are not issued, then you are more likely to be approved and obtain the loan you have been offered.

Understanding a home loan does  not require a brain surgeon but failing to understand the loan you have been offered may cause a headache.

With thirty years home lending experience under my belt,  I am very concerned about the  loans our industry are marketing to borrowers. In the name of affordability new loan products are both complex and confusing.

Many loan officers do not understand the loans they market. Many borrowers have obtained loans they did not understand and now have loans they cannot afford to repay. Many lenders did not understand the implications of the loans they have created.

In this blog,  I will provide clients, their friends and associates my honest comments on loans that you allow me to review.  I will comment on loan rates, terms and implications.  I will touch on different loan risks and benefits  each week,  so please subscribe and stay tuned. Education is the best way to turn confusion into understanding.   I want to help.

Mike Sedloff