Credit Infocenter

How to Get the Best Home Mortgage Rate in 2019

September 10th, 2019 · Credit Repair

There are quite a few important factors that combine to help you get a mortgage rate for a house. The trick is to know what these factors are and how you can manipulate them or work them to your advantage, which in this case would mean getting the best home mortgage rate you can in 2019.

Keep reading to learn more.

Your Credit Score

Your credit score is a combined representation of a prediction of a credit scoring company. If you have a bad credit score, you might not be very consistent at making your outstanding balance payments. Maybe you don’t pay your full bills and opt for the minimum due.

That’s okay. But credit scoring companies are going to see that behavior and predict it won’t change, thereby awarding you with a lower credit score. On the other hand, if you make your payments in full, consistently, and don’t max out your credit cards, you’re going to have a better credit score.

Credit scoring companies are constantly searching for new and better ways to predict the actions of the everyday consumer. The better they can predict how you spend your money, how often, on what, and whether or not you pay your bills will determine, in part, the score they give you.

That score will, in turn, determine the type of home mortgage rate you’ll get in 2019. If you’ve shown yourself to be a responsible credit card owner who has established good and regular habits of paying off debt in the past, you’ll be well on your way to getting a good mortgage rate.

Interest Rates

Home mortgages can have a fixed or variable interest rate or even a combination of the two. A variable interest rate will likely start lower than a fixed, but there’s always the chance it will increase in a rising-rate environment.

Fixed interest rates will cost more right off the bat, but they will remain stable throughout any sort of rate fluctuation that could cause you to pay more on a variable rate.

Your interest rate is something you and your lender will work out together, but it’s still an important component in figuring out the type of home mortgage loans you qualify for.

Where Your Potential Property is Located

Where you’re planning to build your home will make a big difference in the type of loan you get. Expensive areas will impact your loan options differently than inexpensive areas. Rural areas versus urban areas will also change things up.

Do some research on property prices in the area you’re looking to purchase in. This will help you have a good idea of the type of loan you’ll need.

Your Down Payment & Length of Loan

The more equity you invest in your loan, the happier your lenders will be. There’s a fair amount of risk associated with building a home, so the more money you can give upfront, the more likely your interest rate will be lower. In addition, the sooner you can pay your loan off, the better.

If you are willing to pay more on your down payment and choose a shorter period of time to pay off your loan, that will go a long way in convincing lenders that you mean business and deserve a good mortgage rate.

Cost of the Home and Cost of the Mortgage

How much your home is going to cost determines the cost of the mortgage in question. Depending on the area you’re building in and what your house is going to look like, your mortgage could fall into one of three different categories:

  • Conforming: These loans are up to $424,000.
  • Super Conforming: These loans fall between $424,000 and $636,150.
  • Jumbo: Loans in this category max out past the upper level of super conforming loans.

The higher the loan, the higher the interest. Use this understanding to your advantage by following the tips we’ve suggested above: work hard to keep your credit score solid and good, think about which type of interest rate would best suit your needs, do research on where your home is located and the prices of other homes in the area, pay more on your down payment and opt for a shorter loan length.

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5 Tips to Start Building Your Credit

August 28th, 2019 · Credit Repair

Before credit cards existed, everything was done with cash or by barter. You can still exist today operating that same way, but unless you have a large amount of cash readily at hand, it’s likely you won’t be able to make substantial purchases without the aid of a good credit score.

We’re going to address five tips that are great for building up your credit score. Read below to learn more.

Get a Credit Card

First and foremost, get a credit card. You can’t start building good credit if you aren’t spending money on a credit card. You can get a secured credit card or a traditional card. The main difference between the two is that you personally fund the secured card.

A traditional credit card doesn’t have any money deposited that determines its spending limit; a secured credit card does. Secured credit cards are a great place to start developing good credit because they’re usually easier to qualify for and get, especially if your credit score needs some help.

Traditional credit cards are harder to get, especially if you don’t have decent credit already. Either way, once you have your card, you’ll be one step closer to developing the good credit score you’re looking for.

Don’t Borrow More Than You Can Afford

Take this piece of budget advice to heart. If you know you don’t have the funds to pay off a huge loan, don’t get it in the first place. Building up good credit usually takes time. So don’t be worried if you’re starting small with regular, everyday bills. Consistently paying those bills will add up to a good credit score in the long run.

Look Into Credit-Builder Loans

If you want to try building up your credit score a bit faster, you can take out a loan designed specifically to help you improve your credit score.

Credit-builder loans are a good option to look into. When you take out a loan, the lender keeps the money in full until you have paid it off in full. Your regular, consistent payments to pay off the loan are watched and recorded by credit bureaus.

Don’t Use All Your Credit

Show the credit bureaus that you’re responsible by not maxing out your credit card limits. If you can’t pay back a maxed-out credit card balance, that will reflect negatively on you and your credit score. Stay within or well under your credit limit.

Make Payments On Time and In Full

If you’re not spending more money than you have on your credit card, paying your balance on time and in full shouldn’t be a problem. Failing to make your payments on time will have negative repercussions. This practice will not only bolster your credit score, but teach you good spreending habits as well.

Get Budget Advice with Credit Info Center

Getting the good credit score you’re aiming for doesn’t have to be difficult. Reaching that goal comes down to one thing: money management and budgeting. Learn more about improving your credit score in a healthy way with solid budget advice from Credit Info Center.

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Personal Loans: 6 Tips that will help you pick the best loan for you

August 20th, 2019 · Auto Loans, PayDay Loans, Your Money

There are many reasons to get a personal loan: debt consolidation, home repairs, tuition costs or that item that you just have to have.   A personal loan generally means that the loan is unsecured loan and repaid over a fixed period of time.  A personal loan is not typically more than $50,000 and is considered an installment loan.  

Is a personal loan right for you?

  • If you have a lot of credit card debt, and you’re paying the industry standard interest rate of 14% or higher, getting a personal loan can make a lot of sense, especially if you have good credit.  Interest rates are as low as 6% on some loans, so you could be saving a lot of money and consolidate your debt at the same time.  
  • If you are thinking of going to college, getting a personal loan instead of a student loan can have its benefits, though typically a personal loan repayment period is about 3 years.  
  • That gadget or toy you’ve been wanting.  I applied for and received a personal loan through my credit union when I decided to get an ATV, and the rate was cheaper than if I had decided to finance it through the dealer.   
  • You want to build credit – a personal loan is a great way to take out a small amount of money and build positive credit history.  Having an installment loan on your credit report can really help your FICO score.  
  • Instead of getting an equity line of credit, which is considered revolving credit, you could get a loan for that new kitchen upgrade you’ve been wanted.  

Tips for finding the perfect personal loan

Join a credit union.  Credit unions are everyone’s best friend.  In addition to lower fees and costs, credit unions have lower credit standards and competitive interest rates on their personal loans.  

If you have poor credit, get a co-signor. A co-signer can essentially lend you their credit.  The bank or financial institution will consider the co-signer’s credit when underwriting the loan and possibly qualify you for the best rate.  

Improve your credit. Speaking of credit, you may want to hold off getting that loan and see if you can do some quick fixes to your credit score.  If you have lower than a 680 FICO score, you will be paying high interest rates on your loan.  Some things you can do:  

  1. Pull your credit report and fix errors.  
  2. Get added as an authorized user on a friend or family member’s credit card.  
  3. Open a secured credit card and make timely payments and keep the balance low.  

Consider a secured personal loan.  This is a credit trick that I’ve been touting for years – buy a 1 year CD then use the CD as security on the personal loan.  Almost no bank will turn you down for $500 loan secured by a $500 CD. That loan will be reported on your credit report and you will see a credit score boost!  

If you don’t need to build your credit, getting a secured personal loan can still make sense:  secured personal loans mean lower risk to the lender and therefore you may get a deal on interest rates.  You can use home equity, investments, autos or any other asset as security for the loan.  

Do your homework! The lending industry is highly competitive and there are many sources for personal loans.  Some places you can check: 

  1. Check online banks.  There are many online banks who forgo the costs of having a bricks and mortar presence to pass the savings on to you.  
  2. Make sure the costs of the loan are something you can afford: the payment should fit within your budget and the cost of initiating the loan should be small or free.  
  3. Make sure you don’t apply to places who will pull a hard inquiry on your credit, or minimize the number of applications you send out.  Hard inquiries can lower your credit score. Some places will qualify you for a loan with a soft inquiry, which does not hurt your credit.  

Choose a shorter term of repayment. The shorter the term, the lower your interest rate and the lower the total cost of the loan.  Lenders perceive the risk as great as the length of repayment increases and greater risk means higher interest rates.  In addition, the interest you will pay for a loan of 1 year vs. 3 years is much lower.  

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