Monthly Archives: September 2014

There Are Simple Ways To Improve Your Credit Score. Here Are Five Of Them

If you’ve taken a hit on your credit score and you’re in the process of rebuilding credit, you may be frustrated. Improving your credit over time can seem like a daunting task. However, there are simple strategies that a person can use that will allow you to rebuild your credit sooner. All that is really required is the time and patience to do what is necessary. Here are five tips to help anyone improve their credit score.

1. Focus on Paying Down Revolving Accounts – While paying off mortgage, automobile, and student loans can improve your credit score, usually the results will not be as dramatic as compared to paying off your credit cards. Credit cards are viewed as revolving accounts. This means that the debt doesn’t have to be paid in full by the debtor at the end of each month. The problem is that if you are the type of person that makes only minimum payments and you never pay down your credit card debt, credit agencies rightfully view you as a more risky consumer to loan money. Typically, it is best to keep credit card balances below 30% of your limit.

2. Don’t Use Credit Cards Frequently – Making frequent and large charges to your credit card can have an impact on your credit score. It doesn’t matter if the balance is paid in full at the end of the month because balances on your last statement are reported to credit agencies. The problem with this is that it means your may fall over the 30% credit card utilization limit even if you’re paying off the debt every month.

3. Use Your Older Credit Cards When Needed – Older accounts are viewed better than newer accounts. Unfortunately, if you don’t use the older credit cards then they’re not given equal weight when calculating your credit score. Therefore, it is recommended that you use older cards every so often (3-4 times per year) to keep this problem from occurring.

4. Always Get a Copy of Your Free Credit Report – You are provided a free credit report once a year. There is no reason why you shouldn’t take advantage of this to check on your accounts and balances and to double check that everything is correct. You can get your credit report from

5. Understand The Basic Formula For Calculating Credit Score: Credit scores are determined by several different factors. It is important to understand the basic formula. While much of the information is hidden from consumers, there are some things that are apparent. (1) If several inquiries are made to your credit report, it will drop your score. Generally, an inquiry for a new credit card account can cost you 5 points off your score. (2) Requesting your personal credit report will not negatively affect your score. Therefore, there is no reason not to check on your credit report occasionally. (3) Pay your bill on time each and every month. This is, of course, easier said than done. But if you can do it, it is the most basic approach to ensuring your credit score will remain high.

Following these simple tips will help you greatly improve your credit score.   Persistence and a dedication to change your life is the only other requirements.  Good luck.

Feldman Law Center – Modify Loans

US Banks are now more likely to supply Principle Reductions After Recent Study

High post loan alteration default rates are forcing banks to rethink their reluctance to grant principle reductions when they modify loans. A recent study showing that 50% of loans altered in the first part of 2008 were back in default inside half a year has banks rushing to figure out the easy way to keep their borrowers current. A different study showed that 25% of altered loans were back in default after the first payment.

Feldman Law Center – Payment Reduction

Principle reductions, up till now a somewhat unusual occurrence in loan alterations, are increasingly being seen as a feasible answer to reduce the size of borrowers’ standard payments and to provide the inducement to remain current on monthly payments. Diane Pendley, Managing Director and Head of Fitch’s Operation Risk Group latterly stated’Some combination of payment reduction and either principle reduction or forgiveness might be the most effective approach to loan alteration as it may increase borrower ability and willingness to repay the altered amount.’ She added’However, when principle reduction is employed, versus forbearance where a portion of principle is ballooned to the end of the term, it should be carefully considered and tied to this value of the home.’

info obtained from First American Loan Performance showed the principle reductions of twenty p.c. or bigger cut the default rate to 28% from the overall rate of fifty percent. When monthly mortgage payments were altered lower by twenty p.c. or more the default rate dropped further the 21%. Smaller decreases in standard payments expanded the default rate to 49% within the first six months.

Feldman Law Center – Mortgage Payment

Principle reductions have also been discussed prominently in the Obama administration’s displaying of the’Homeowner Affordability and Stability Program’ ( HASP ) where banks can incorporate the reductions as part the new formula requiring constraints on the scale of a homeowner’s monthly mortgage payment. The tenet for the principle reductions is set the loan to value at less than 90% which, in areas where home prices have fallen hard, could end in big reductions for house owners.

While much littler in size, the HASP initiative promises yearly principle reductions to homeowners that pay their altered payments on time for a minimum of one year. For at least five years, homeowners who pay on time will have the principle on their mortgage reduced by $1,000 per year.

Feldman Law Center – ready Lenders

What remains to be seen is how prepared banks, including FNMA and FHLMC, will be to make principle reductions on a regular basis. it could be that they are going to require more proof that principle reductions can make a big difference in keeping homeowners current and inspired to remain that way. Commonsense would dictate that the lower the standard payment, the better the chance that the borrower will make that payment. Principle reductions could play a giant role in that calculation.

Using Branding and Tools to Build a Mortgage Website

One way to make you stand out from the competition in the mortgage market is to create a good branding model that reflects the way you do business. Think for a moment: Are you very thorough with your loan process and never make mistakes? Are you extremely easy to work with? Do you have extensible experience? Identify the way you do business and try to incorporate that to get a good start on your branding.

When it comes to sales, the majority of the closing process is satisfying the customer with some need that must be fulfilled. Therefore, focus on the way you do business and how it satisfies your customers in a way that he/she will go no where else for loans. This is a basis for your branding.

Branding is creating a visual representation of the way you do business and how you can satisfy your customers. Think of the many colors, symbols, etc. you can use in your branding that represents this process. For example, if you are go-getter and have a reputation for someone that gets things done, you could use the color red on your mortgage website. This could communicate to your customers as “bold, energetic, will go out of your way for the customer”. Another example would be someone that is friendly, always honest with their customers, easy to talk to, could use a more calming color like blue. This could portray to customers as “yes, I’m easy to talk to; I will listen to your situation; be completely honest with your options and fees, and will get the right loan for you”.

There are a number of mortgage tools that lenders provide for prospective homebuyers, current homeowners, and renters. The majority of mortgage tools that are available include online calculators for affordability, debt ratio, credit scoring, interest, and loan payments. The latest market information, mortgage rates in each state, and prequalification worksheets are useful mortgage tools, as well.

Home affordability is the first mortgage tool that should be utilized. Prospective homebuyers can calculate how much the can afford to spend on a home, based on their income, and the approximate amount of down payment that may be required, usually 20%. The affordability mortgage tool also considers other factors, such as the current interest rate, loan term, closing costs, and mortgage insurance.

The second important mortgage tool enables the client to estimate the amount of the loan payment over the term of the mortgage, the benefits in paying more or less down payment, and the effects of prepayment. The mortgage calculator tool estimates future payments, equity accrual, and interest decline over time.

Another helpful mortgage tool helps in determining the best type of mortgage for each individual situation. This, of course, will depend upon how long you intend to live in your home, the future of interest rates, and your budget. There are fixed rate mortgages, usually preferred for long-term residency, where your payment remains the same for the entire term of the loan. Adjustable rate mortgages, with lower payments than fixed, allow some flexibility for a shorter period of ownership. Since interest rates often fluctuate widely from year to year, the mortgage tool calculates the payments for both types of mortgages, comparing the advantages and disadvantages of the two.

Lenders include a discussion of mortgage points as a mortgage tool to assist borrowers. Points may be considered in loan origination fees or loan discounts, but are generally used to lower the interest rate on the loan. This type of prepaid interest takes off 1/4th to 1/8th of a percent from the current interest rate for each point you purchase, and as interest payments, are generally tax deductible. However, it takes at least five to seven years to regain the cost of the point and actually start benefiting from the lower loan payments. The mortgage tool will calculate whether an investment of the same amount of money elsewhere would be more worthwhile for the buyer. In addition, other mortgage tools are available, such as the pros and cons of renting vs. buying, options for financing and refinancing, and applicable tax advantages.