Credit in Punta Gorda

Consolidation Loans Popular in Punta Gorda, FL

Monday, August 15th, 2011

Consolidate your debt with a home equity line of credit

If your debt is out of control but you have equity in your home, you might consider consolidating your debt with a home equity line of credit.

Debt consolidation comes with the possibility of a single payment, and a low interest rate that allows you to pay off your indebtedness in less time for less money — provided you practice sound financial behavior. If you’ve got the equity, you have two options.

Home equity loans

More than one third of all home equity loans are used for debt consolidation. Here are some ideas to make home equity loans work as a debt consolidation tool:

•Change your spending habits. Before you apply for the loan, practice living on a lower income. Save the difference. Don’t take on additional debts while the equity loan is outstanding.

•Choose a short payment period. Even with a low interest rate a 10 to 15 year home equity loan can be expensive. Prepay your loan in three to five years. The savings can be startling. If you transfer a $15,000 balance of just one 17 percent credit card to a 9 percent home equity loan and pay it off in five years, you’ll save more than $30,000.

•Avoid loans for more than the value of your home. Not only can’t you deduct all the interest but you’ll also put your home at unnecessary risk for a costly loan.

•Shop around for the lowest rate.

•Beware. Avoid high closing costs, low introductory or “teaser” rates and credit cards tied to home equity lines of credit. They all undercut your reason for consolidating — to save money.

Refinanced mortgages

If your mortgage is a small portion of your home’s value or if you are paying an interest rate higher than prevailing rates, you could be a candidate for tapping equity through a refinanced first mortgage.

With a refinanced mortgage, for the same mortgage payment or less than you’ve been making each month, you can pay off more expensive debts. If you take out the loan for 30 years, however, you’ll borrow against more of your home equity for a longer period. That could be both expensive and risky, by putting your home in jeopardy for a longer period than the previous mortgage.

•Don’t pay for more of a refinance than you can afford. Don’t let a lender talk you into a 15-year refinance if you can’t make the payments. “There’s no point in starting a debt consolidation program, unless the goals you set are ones you can live and stick with,” Detweiler said.

•Keep making the same monthly payments. If you’ve managed to make all the payments before consolidation, adding that money to your monthly refinanced mortgage can save you thousands.

•Negotiate. Points and fees are negotiable, especially if lenders are hungry for customers. Check rates, points and fees with at least three to five lenders before signing on the dotted line.

•Pay closing costs up front. If you have the cash, paying closing costs will save you on financed interest charges over the life of the loan.

For the “What it’s Worth File”. Not everyone is in a position to opt for solving their credit problems by utilizing the equity they have in their home. For those that are in that posiotion this is a great opportunity! Remember, if you are in need of a Realtor® where you live or need one where you are moving – just call me. I will help you find a “Good one! M. K. (Mike ) Kissinger #941-979-1455

Tags: Best Home Values in Punta Gorda, Coldwell Banker Morris Realty, Financing in Punta Gortda, Interest Rates in Punta Gorda, Punta Gorda - Best Places to Live in the South, Punta Gorda New Home Search, Sunshine State
Posted in Credit in Punta Gorda | 6 Comments »

Punta Gorda Homeowners ask, What is a Home Equity Loan?

Friday, August 12th, 2011

Surprisingly few consumers know much about these loans

Nearly 40 percent of all homeowners don’t know if the interest on home equity loans is tax deductible.

One third of home owners earning $50,000 or more believe the interest on equity loans isn’t tax deductible or they just don’t know if it is tax deductible.

Although 77 percent of home owners describe their ability to manage their personal finances as good or excellent, many of them appear to be somewhat clueless about home equity loans, according to a recent study by Chicago-based Bank One.

Blame that on limited home equity educational materials, home owners’ lack of experience with the loans and fallout from equity loan abuse.

“If you ever walk into a book store in the area where there is financial or budgeting books there are rows and rows of books on investing and maybe one or two that have anything to do with borrowing against your equity to improve your financial situation,” said Saundra Schrock, chief executive officer for Bank One’s consumer lending division in Wilmington, DE.

Schrock said a lack of eduction explains the startling finds discovered in a home owner study conducted by Edison, N.J.-based Bruskin/Goldring Research. From April 1 to April 3 this year, Bruskin randomly called 723 homeowners around the nation to produce the Bank One commissioned study which has a margin of error of plus or minus 3 percent.

“Another study we did showed there’s 3.2 trillion dollars worth of untapped equity in the hands of homeowners today,” Bruskin said.

Bank One is in the business to cash in on that much loose change, which makes its study considerably self-serving, but the report does reveal alarming facts about home owners.

The bank says the cost for obtaining $10,000 for one year is $1,800 for a credit card, $1,000 for the sale of stock, $900 to tap a (401)k plan or take out a personal loan and only $576 for a home equity loan. The costs are based on a set of conventional assumptions about the interest rate and costs typical for each type of loan.

“If you find yourself in need of a sum of money, whether it’s to renovate your home, purchase a new car or consolidate debt, a home equity can be a very smart financial tool,” said Jordan Goodman, a personal finance expert, sought-after media source and author of “Everyone’s Money Book,” (Dearborn Financial, $26.95).

That may be, but 25 percent of the home owners surveyed said they’d use a personal loan to meet an unexpected expense of $10,000, not a home equity loan. Another 22 percent said they would dip into their savings, only 9 percent said they would use a home equity loan and 7 percent said they would borrow it from a friend or relative.

Only 28 percent of those questioned said they have ever used a home equity loan or equity line of credit, while 66 percent said they’ve used auto loans and 58 percent have used personal loans.

“It really doesn’t surprise me,” said Eric Tyson, co-author of “Mortgages for Dummies”. “That’s why I have a job. That’s why you have a job. It’s confusing for no other reason than home owners have less first hand experience with equity loans. And there are separate tax laws dealing with home equity,” Tyson added.

Tyson also said stories about lenders with high-priced loans who prey on vulnerable home owners and the improper use of equity loans scares off some homeowners.

“Truth be told, there is a segment of the population that misused home equity loans. People who, as home prices appreciate, go out and continually borrow more and more money on home equity because they feel wealthy. Over time they raise their total indebtedness, beyond their ability to pay.”

For the “What it’s Worth File”. I hope that this article opens your eyes to the opportunity that may be available in terms of “equity” that exists in your current home. Now that you have the knowledge of the in’s and out’s of that process, hopefully you can utilize it to your advantage. Remember, if you need a Realtor® where you live of need one where you are moving - just call me. I will help you find a “Good” one!

Tags: Best Value Homes, Coldwell Banker Morris Realty, Home Equity Loans in Punta Gorda, Punta Gorda - Best Places to Live in the South, Punta Gorda Real Estate, Sunshine State
Posted in Credit in Punta Gorda | 1 Comment »

Punta Gorda Homeowners Try to Understand Credit Scores!

Wednesday, August 10th, 2011

Learn what your credit score is and how to improve it

You may not even know that you have a credit score, but you do — and it’s used by credit card companies, home equity lenders, auto loan lenders, and finance companies when you apply for credit or a loan. Produced with a computer model created, most often, by Fair, Isaac & Co. (or “FICO”), a credit score is intended to be a snapshot, or summary, of your credit history. A low score can mean you don’t get a credit card or loan, or that if you do, you will pay a higher interest rate. Also, some lenders use your credit score and other information to set the “price” for your loan.

Factors affecting your credit score

Although we don’t know exactly how a credit score is determined, FICO considers the following factors (the approximate weight it assigns to each factor is in parentheses):

Payment history (35 percent).Your score is negatively affected if you have paid bills late, had an account sent to collection, or declared bankruptcy. The more recent the problem, the lower your score — a 30-day late payment today hurts more than a bankruptcy five years ago.

Outstanding debt (30 percent).If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score. A low balance on two cards is better than a high balance on one.

Length of your credit history (15 percent).The longer your accounts have been open, the better.

Recent inquiries on your report (10 percent).If you have recently applied for many new accounts, that may negatively affect your score. Promotional inquiries don’t count.

Types of credit in use (10 percent).Loans from finance companies generally lower your credit score. FICO says this is most important when there isn’t a lot of other information upon which to base a score.

Although this is a good guide as to what credit scoring companies deem important, keep in mind that some companies may consider different factors.

What the numbers mean

Credit scores range from 300 to 900, with the average around 750. According to the model, as your score increases, your risk of default decreases. Industry experience shows a direct correlation between low scores and high default rates.

This means that you may have a hard time convincing a creditor to make you an affordable loan (or any loan at all) if your score is far below average. But just as your credit history can vary from credit bureau to credit bureau, so can your credit scores. It is possible to have a fairly high score with one credit bureau (Equifax, Experian, or TransUnion) and a somewhat low credit score with another, just as you might have a clean credit history with one bureau and a muddied record with another.

Wide-ranging credit scores are rare, however, although some lenders admit to seeing borrowers with scores that vary by 100 points or more. To combat this, a lender usually uses the middle score — but that can be of little comfort if you have scores of 550, 570, and 700, and the interest rate for a borrower with a score of 570 is two points higher than the rate for a borrower who scores 700. Narrow ranges are more typical. For example, a person with good credit might have scores something like 685, 702, and 710.

How to get your credit score

You may now obtain your credit score from credit bureaus that develop or distribute credit scores by paying a fee (the Federal Trade Commission sets the fee). The bureau must provide your score, the range of possible scores under the scoring model used, four key factors that affected the score, the date on which the score was created, and the name of the entity that provided the score (such as Fair, Isaac). Be aware, however, the score and the scoring model that you receive may be different than those your lender uses. Fair, Isaac, in partnership with Equifax (one of the “big three” credit bureaus), makes credit scores available online to consumers for a fee of $14.95. To get your credit score, visitwww.myfico.com or www.equifax.com or www.scorepower.com.

How to improve your credit score

If you want to improve your credit score, Fair, Isaac offers these tips:
•pay your bills on time
•make up missed payments and keep all your payments current
•maintain low balances on credit cards and other “revolving debt”
•pay off debt rather than transferring it to a new account
•don’t close unused credit card accounts just to raise your credit score
•don’t get new credit cards that you don’t need just to increase the credit available to you, and
•see more tips in “Understanding Your Credit Score” on the Fair, Isaac website, www.myfico.com.

Finally, don’t give up hope just because you have a low score. If you think there are mistakes on your credit report, you can get a copy of the report, fix the problem, and explain the situation to the lender. Some lenders may override credit scores if they think you are a good risk despite problems with your score.

Learn more about credit scoring

To learn more about credit scoring — particularly its pitfalls — you might want to visit the website of one of credit scoring’s biggest critics, Greg Fisher. He beat the scoring proponents to the punch by scooping up the Web address www.creditscoring.com, from which he launches often strident, sometimes wacky, but usually well-documented attacks on the credit-scoring concept and the industries that support it. If you’re interested in the other side of the story, get the booklet “Understanding Your Credit Score” from Fair, Isaac atwww.myfico.com.

For the “What it’s Worth File”. Whether you are an astute credit aficionado or just a novice at credit scoring - this article gives you some valuable information that needs to be absorbed. With the economy in it’s current state credit scores will be very important in the future as we begin to come out of all this mess. Knowing what it is, what you can expect from it and how to keep it accurate is very fundamental and practical knowledge. Remember , if you need a Realtor® where you live or need one where you are moving – just call me. I will help you find a “Good” one! M. K (Mike) Kissinger #941-979-1455

Tags: Buyer's Market in Punta Gorda, Charlotte County, Coldwell Banker Morris Realty, Credit Scores in Punta Gorda, Punta Gorda - Best Places to Live in the South, Punta Gorda Financing Market, Punta Gorda Florida Real Estate Market, Sunshine State
Posted in Credit in Punta Gorda | 11 Comments »

Punta Gorda Borrowers Have a List of ?’s for the Lender!

Monday, August 1st, 2011

The answer to these queries will help you find the best mortgage

Here are the 10 key questions to ask at application time to help you find the best overall mortgage loan. If you have already selected a lender and are ready to apply, make sure you have the answers to these questions first.

1. What is the interest rate on this mortgage?
2. How many discount and origination points will I pay?
3. What are the closing costs?
4. When can I lock the interest rate and what will it cost me to do so?
5. Is there a prepayment penalty on this loan?
6. What is the minimum down payment required for this loan?
7. What are the qualifying guidelines for this loan?
8. What documents will I have to provide?
9. How long will it take to process my loan application?
10. What might delay approval of my loan?

Once you’ve narrowed the lender field to a short list of finalists, it’s time to compare their offers.

1. What is the interest rate on this mortgage?

To determine exactly what you’ll pay over the term of the loan, you need to know the rate. Rates change quickly, and if your credit is less than perfect, you may not be offered the lender’s lowest figure.

To effectively compare different lenders’ programs, ask for the annual percentage rate (APR) of the mortgage interest, which is generally higher than the initial quoted rate because it includes some fees. But beware: the APR found in advertisements can be misleading. Mortgage lenders don’t always include all the fees they charge in the calculation that determines APR, so customers who use that figure to shop rather than an itemized breakdown of rates, points and fees may end up comparing apples to oranges.

2. How many discount and origination points will I pay?

Lenders may charge prepaid mortgage interest points to lower your interest rate or other points that have no benefit to you at all. Find out how many you’ll be expected to pay and which kind of points they will be.

3. What are the closing costs?

Mortgages come with fees for services provided by lenders and other parties involved in the transaction. You want to know what those fees will be as early as possible. Lenders are required to provide a written good faith estimate of closing costs within three days of receiving a loan application.

4. When can I lock the interest rate and what will it cost me to do so?

Your interest rate might fluctuate between the time you apply and closing. To prevent it from going up, you may want to lock the rate, and even points, for a specified period. Ask your lender if lock fees apply. Also, find out what the experts are expecting rates to do, read Rate Trend Index.

5. Is there a prepayment penalty on this loan?

There may be a prepayment penalty on your loan. Some penalties are 1 percent of the loan amount, others are equal to six months’ interest, some apply only when you refinance or reduce the principal balance by more than 20 percent, and some kick in if you sell your home. Find out the duration of any penalty period and how the penalty is calculated. Some lenders offer lower interest rates to buyers who accept prepayment penalties.

6. What is the minimum down payment required for this loan?

The rate and terms of your loan will be based on a down payment figure, typically 3 to 20 percent of the buy price. If you can put more money down, you may be able to lower your rate and improve your terms; if you come up short, you may be required to get private mortgage insurance (PMI).

7. What are the qualifying guidelines for this loan?

These requirements relate to your income, employment, assets, liabilities and credit history. First-time home buyer programs, VA loans and other government-sponsored mortgage programs typically offer easier qualifying guidelines than conventional loans.

8. What documents will I have to provide?

Most lenders will require proof of income and assets before approving your loan, and may require other documents as well. Buyers with excellent credit may qualify for a no-documentation or “no-doc” loan, but they can expect to pay a hefty down payment and higher interest rate.

9. How long will it take to process my loan application?

The answer will depend on several variables. When the loan business is brisk, underwriters get backed up, verification takes longer, appraisals move slower and other bottlenecks develop along the loan pipeline. Lenders may say two weeks, but 45 to 60 days is probably more realistic in most cases. You’ll need their best guess to determine how long to lock in your loan.

10. What might delay approval of my loan?

If you provide the lender with complete, accurate information, the loan process should run smoothly. If the underwriter discovers credit problems, there could be delays. Make sure you notify your lender if you change jobs, increase or decrease your salary, incur additional debt or change marital status between the time you submit an application and the time the loan is funded.

Put these 10 questions to your leading candidates and compare their answers. The results should lead you toward the mortgage lender that is right for you.

For the “What it’s Worth File”. What you have here is everything you need to know to effectively qualify which lender is going to be the best choice for you . If you diligently put these questions to several lenders, you will find the “best” one for your situation. Don’t be bashful! They won’t be when it’s their turn! Remember, if you need a Realtor® where you live or need one where you are moving – just call me. I will help your find a “Good” one! M. K. (Mike) Kissinger #941-979-1455

Tags: Best Home Values in Punta Gorda, Buying A Punta Gorda Home, Coldwell Banker Morris Realty, Port Charlotte Real Estate, Punta Gorda - Best Places to Live in the South, Punta Gorda Florida Real Estate Market, Sunshine State
Posted in Credit in Punta Gorda | 4 Comments »

Punta Gorda Buyers Surprised – What questions to expect from a Lender!

Friday, July 29th, 2011

Your mortgage lender will want to know a lot about you before approving your loan application, and justifiably so; they and their underwriters want to be assured that you meet their minimum level of creditworthiness before lending you money.

Areas of questioning

Here are the general areas of questioning you can expect from a lender:

1. Employment and income.
2. Outstanding debts
3. Cash reserves and assets
4. Down payment
5. Loan purpose
6. Property use
7. Property type

Employment and income
•Where do you work?
•How much do you make?
•How long have you been at your job?
•How is your income derived — steady salary or irregular income? If it’s the latter, you may need to provide more details to obtain a favorable interest rate.

Outstanding debts
•What recurring debts do you have?
•How much do you pay a month for auto loans?
•Credit cards? How much of your monthly pretax income do these debts consume?
•Cash reserves and assets
•How much money do you have in the bank?
•How much will be left after you pay your down payment and closing costs?

Down payment
•How much money are you putting down?
•Is this your own money?
•If not, is it a gift from your parents?
•A nonprofit agency grant?

Loan purpose
•Is this mortgage for a home buy or refinance?
•If it’s a refinance, do you want to take cash out at closing to pay off other debts? If so, how much?

Property use
•Do you plan to live in the house?
•Is it investment property?

Property type
•A condominium?
•A duplex?

The following responses tend to work in your favor:

•Steady employment (two or more years) with the same employer or in same line of work.
•Low debt: no recent major buys (such as automobiles) and a debt-to-income ratio of 36 percent or less.
•Loan is for straight home purchase (or rate-and-term refinance).
•Property is detached single-family home to be used as primary residence.
•Down payment of at least 5 percent of sales price with your own money.
•You’ll have at least two months’ worth of mortgage payments in the bank after closing.

These responses tend to work against you:

•Self-employed or contract worker.
•High debt: credit cards maxed out, total debt-to-income ratio more than 36 percent.
•Property is a duplex or condominium, to be used as a vacation home or rental.
•No cash left after home buy and closing costs.
•Down payment is 3 percent or less of buy price and money is borrowed.

For The “What it’s Worth File”. Does it feel like you are being interrogated by the police? It is a similar process. This article will give you a heads up so you can prepare the “best” answers to the above questions, so as to improve your overall outcome. Now you wont be intimidated and your presentation can be much more appropriate. Remember, if you need a Realtor® where you live or need one where you are moving – just call me. I will help you find a “good” one! M. K. (Mike) Kissinger #941-979-1455

Tags: Best Home Values in Punta Gorda, Buyer's Market in Punta Gorda, Charlotte County, Coldwell Banker Morris Realty, Financing in Punta Gorda, FL, Punta Gorda - Best Places to Live in the South, Sunshine State
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Punta Gorda Homeowners Ponder, “Should I Refinance?”.

Monday, July 25th, 2011

Just What are your Options?

Refinancing your mortgage can provide you with a monthly windfall of cash, shorten the term of your mortgage and help you build equity faster.

When you refinance your original mortgage, you swap it for another, often because the rate of the new mortgage is cheaper. With the cheaper rate comes smaller monthly payments and extra cash each month.

Changing the rate

Let’s say back in the day, you financed $250,000 for a new home at the going fixed jumbo rate of 9.5 percent. Your principle and interest payments are $2,102.14.

With your mortgage balance at or below the current $240,000 conforming loan level today and if you qualify for today’s rates, your monthly payments would be only well below $2000 a month. That’s a huge difference.

The scenario doesn’t include points and other costs, the specific payoff balance on your old loan or the cost of your new loan, but you get the general idea.

The refinanced mortgage could also save you the cost of private mortgage insurance. If you put less than 20 percent down on your original mortgage, your lender likely saddled you with the coverage. If your refinanced mortgage is less than 80 percent of your home’s value today, you won’t have to pay PMI premiums of $50 or more a month.

A refinance from a fixed rate to an adjustable is a particularly good idea if you know you’ll be moving soon and could use the savings from a lower payments to put toward your new home.

Other options include switching from one ARM that’s been adjusting up for a few years to a cheaper new cheaper ARM or to a fixed rate–even if it’s more expensive today–to lock in your payments for the remaining term of the loan and ward off further increases from the old ARM.

Changing the term

Also consider refinancing to change the term of the loan. While a shorter term loan’s monthly payments may be higher, you’ll build equity faster and save hundreds of thousands of dollars over the life of the loan.

Cashing in your equity

Appreciating home values could also encourage you to refinance for a larger mortgage to pull out equity, say, to consolidate bills, perform home improvements, buy a new car, pay for your child’s education or meet other financial needs.

Provided your new rate is comparatively low enough and you don’t use too much equity, your refinanced loan’s payment actually could be cheaper each month than the old mortgage.

You also have the option here to shorten the term of the new loan and recoup your equity faster.

Don’t forget, with all refinanced mortgages, unless you do shorten the term, you begin again with a 30-year mortgage. Add the cost of the new loan to what you’ve already paid before the refinance, and your bottom line could be more than you can afford over time.

Also, if you need to refinance for more than 80 percent of your home’s value, the financial benefits dwindle. You might be better off considering non-equity loan options.

For the “What it’s Worth File”. Yes it is very tempting to want to Refinance. In reality, it may or may not be right for you. The above article breaks down the options for you so you can make an informed decision and not make a financial blunder. Like anything else – Knowledge is Power, but knowing what to do with that knowledge makes all the difference…Remember, if you need a Realtor® where you live or need one where you are moving – just call me. I will help you find a “Good” one! M. K. (Mike) Kissinger # 941-979-1455

Tags: Buyer's Market in Punta Gorda, Coldwell Banker Morris Realty, Financing Punta Gorda Real Estate, Punta Gorda - Best Places to Live in the South, Sunshine State
Posted in Credit in Punta Gorda | 10 Comments »

Punta Gorda Buyers Challenged by the Credit Test!

Monday, July 18th, 2011

Understand Your Credit

Thinking about buying a house? Then think about your credit history…the folks who lend money do!

How well you have handled your credit obligations in the past is of utmost importance to lenders today. The good news is that this information, for the most part, is available to you.

Your credit history is maintained by three different private companies called credit reporting agencies: Equifax, TransUnion and Experian. You can order your report by phone and charge it to your major credit card if you like. It usually takes about a week to arrive. Or you can order your report online and view it within seconds.

It’s a good idea to get a copy of all three reports, because if an error exists on even one of the reports, it may negatively affect your chances of getting the loan you want. Your credit report lists all the consumer credit that has been extended to you over the past seven years. It will show what your highest balance has been and what your current balance was on the date last reported by the creditor. It will also show how many payments you made on time and how many late payments were late. Late payments are grouped into categories showing how late you were. For example, if your credit card payment was over 30 days late one time, it might not be considered too serious. But if payments were over 60 days late four times, over 120 days late two times and over 180 days late one time, you have had a serious problem. That problem is going to impact your ability to borrow money.

It just makes sense to find out about your credit and correct any errors now. Regardless of how many credit problems you have had in the past, there are two good points to remember.

First, negative credit information can be reported in your credit file for only seven years. After that, it drops out and cannot even be considered. The one exception is bankruptcy, which can be reported for 10 years. But after that you start with essentially a clean slate.

Second, lenders are much more concerned about how you have handled your credit recently than with what happened several years ago. Even if you have had a bankruptcy, if you have kept your nose clean and paid your bills on time since then, it is possible you could qualify for a loan after as little as two or three years.

One of the best developments in the world of lending has been risk-based pricing. That’s a five dollar term for the ability of lenders to offer higher priced loans to borrowers based on their demonstrated ability to repay. In other words, even if you have slightly fractured credit, you can still likely get a loan. It just may cost you a little more.

For the “What it’s Worth File”. We all have been urged to pay attention to our credit status and make sure we keep it as good as possible. Well, it might have been important in the past, but it is going to be paramount to your ability to function in the future. If you don’t work at making your credit score as high as possible, your ability to acquire the things you want and need may be hampered. The Credit Crunch will not go away soon! Remember, if you need a Realtor® where you live or need one where you are moving – just call me. I will help you find a “Good one! M. K. (Mike) Kissinger #941-979-1455

Tags: Best Home Values in Punta Gorda, Buyer's Market in Punta Gorda, Buying A Punta Gorda Home, Charlotte County, Credit & Financing in Punta Gorda, Credit Scores in Punta Gorda, Punta Gorda - Best Places to Live in the South, Sunshine State
Posted in Credit in Punta Gorda | 2 Comments »

Punta Gorda Home Owners Practicing Their Math!

Friday, July 15th, 2011

Most home owners refinance to save money month-to-month, but unless you do the math before you trade in one home loan for another you could be wasting both time and money.

What you truly save is based on how much the new loan costs and how long you’ll be in the home.

Here’s what you’ve got to consider:

Costs: Add up ALL the costs, which could include points, and fees for the application, loan origination, appraisal, attorney, credit report, extra insurance, inspections, private mortgage insurance, recording, survey, title insurance, underwriting and others.

Monthly savings: Figure your monthly savings by subtracting your current monthly payment from your refinanced mortgage’s monthly payment.

Tax cost: Multiply your monthly savings by your combined state and federal tax rate.

Net savings: Subtract your tax cost (because the cheaper loan gives you a smaller tax benefit than the previous loan) from your monthly savings.

Break-even point: Divide your total costs by your net savings to determine how many months it will take to pay off the cost of refinancing.

For example, if you will save $100 a month on the refinanced mortgage and the refinanced mortgage costs you $2,500 it would take you just over two years, 25 months, to break even and start enjoying that savings.

If you plan to move within two years, that loan might not be for you.

Hidden costs: Also, if your current loan contract includes a prepayment penalty you’ve got to factor it in too. Some penalties can be as high as six months interest on 80 percent of your balance, but diminish the longer you hold the loan.

The points vs. interest rate also presents a mathematical quandary and, but again, do the math.

Generally, lower points (each point is 1 percent of the amount financed) produce a higher interest rate. Higher interest rates mean lower points.

If you know you’ll stay in your home for a few years, a zero-point loan option would likely be a better deal because you may not have the opportunity to recoup those costs. If you are staying longer with more time to recoup costs, consider a cheaper interest rate with points.

Watch out for some no-pointers. They can be useful if you are cash poor, but in addition to the higher interest rate, some come with prepayment penalties that kick in if you refinance again too soon.

To obtain bottom-line precision on calculating your savings, especially when you shorten the term, you need loan-amortization schedules available on Web-based mortgage calculators or a patient mortgage broker or lender who’ll churn out all the numbers.

To find the best deal, start with your current mortgage lender. Some lenders have marketing programs designed to retain current borrowers by offering them special low-rate, low- or no-cost refinance packages.

Even if your current lender makes a deal you like, use that loan as a benchmark and shop around for your best deal. To get shopping around help, consider references from family members, co-workers, real estate agents and other people you trust, especially those who’ve recently refinanced.

For the “What it’s Woth File”. Let’s face it – not everyone is a Math Whiz. If you need some help – don’t hesitate going to a mortgage professional and getting some assistancee before you make the decision whether to refinance. Remember, if you need a Realtor® where you live or need one where you are moving – just call me. I will help you find a “Good one! M. K. (Mike) Kissinger #941-979-1455

Tags: Coldwell Banker Morris Realty, Finding the Right Punta Gorda Agent, Port Charlotte Real Estate, Punta Gorda - Best Places to Live in the South, Punta Gorda Florida Real Estate Market, Sunshine State
Posted in Credit in Punta Gorda | 5 Comments »

Punta Gorda Newly Weds Combine Their Credit Scores – Oops!

Monday, July 11th, 2011

Love is blind but mortgage companies surely are not. This fact of life is one many newlyweds encounter when hunting for their first home and discover their cumulative credit is far from lovable.

So what happens to their “American Dream” when one spouse’s credit is terrific but the other’s isn’t?

“Typically when a couple applies for a mortgage, the lender reviews the credit histories of both individuals,” says Rod Griffin, manager of consumer communications at credit reporting agency Experian. “That means the negative credit history of one could have an effect on the transaction.”

Nonetheless, many lenders are still willing to show applying couples their love.

Bud Carter, senior director of residential finance at the Mortgage Bankers Association, says lenders tend to look at each situation pragmatically. “If the person with bad credit is not needed to qualify for a mortgage—in other words, one partner has sufficient income to obtain a mortgage—then the credit report of the individual with less-than-stellar credit history might not be reviewed.”

Long-term solution

Your best move is to plan ahead. Just as finalizing the plans for a wedding can take up to a year, so can efforts to improve your credit history.

“A couple should spend time improving their credit history, paying off debts and building a good credit history,” says Griffen. “The longer the time has passed since the negative activity, the better off you’ll be when applying for a loan. You need to show a lender you’ve changed your habits and can now handle your financial affairs more carefully.”

Carter agrees: “That’s what it comes down to—paying bills on time, particularly rent and car payments. Since most lenders look for a year’s worth of acceptable credit, the sooner the person can act, the better.”

Five ways to get ahead

These five tips can place you and your companion in a better position to qualify for a mortgage:

1.Act now. Obtain a copy of your credit reports several weeks or even months before applying for a loan. This lets you learn any potential problems and enter the application process with the same information as the lender.

2.Change your habits. If you have a spotty credit history, start paying your bills on time. Demonstrate to a lender you can handle making monthly mortgage payments.

3.Establish a credit history. If you lack one, obtaining a cosigner for a loan is one way to establish a credit record. A secured credit card can also be helpful. Be sure the credit card company reports your payment history to credit reporting agencies.

4.Consider applying as a sole applicant. In other words, use only the credit history of the partner with good credit, if possible.

5.Look at alternatives. Someone with impaired credit could qualify for a non-conventional mortgage, such as a sub-prime loan, which is more expensive because there’s more risk to the lender. If mortgage rates are 7%, a couple with bad credit could have to pay 9% for a sub-prime loan.

Above all, don’t wait until it’s too late. Buying a home is a little like getting married: the process is arduous but the result is worth it.

Source: By Mike Sheridan Mike Sheridan is a financial and business journalist based in Houston, Texas.

For the “What it’s Worth File:. The general consensus of opinion is that if you combine the scores you will have a better score. Wrong! When you combine them the lender takes the lower of the two and uses it. Take the time to consult a professional before you make the application. Remember, if you need a Realtor where you live or need one where you are moving - just call me. I will help you find a “Good” one! M. K. (Mike) Kissinger #941-979-1455

Tags: Best Home Values in Punta Gorda, Buying A Punta Gorda Home, Coldwell Banker Morris Realty, Finding the Right Punta Gorda Agent, Punta Gorda - Best Places to Live in the South, Sunshine State
Posted in Credit in Punta Gorda | 3 Comments »

Punta Gorda Residents learn how to Protect their Credit Score!

Friday, June 24th, 2011

Do You Know Your Credit Score?

When Did You Check It Last?

Would You Fix It If It Was Wrong?

Taking care of your credit report and verifying that your score is accurate and that the information documented in the report is correct, is fundamentally critical to you ever being able to qualify for any kind of loan.

I recently perused an article that made a lot of sense with respect to some credit score common areas that need to be monitored and checked frequently and disputed if they are inaccurate. The article was written by Tara-Nicholle Nelson, well known real estate specialist, broker and author. She points out that there are five major aspects of your credit report that you need to focus on.

1. Verifying that any account balances that you have paid-down or paid-off are in fact reported as such. By using a credit professional, who will be able to utilize the Rapid Rescore Process, you could actually have the report corrected in as little as 72 hours.

2. Be sure that the report shows accurate former addresses. The lending community will need to be able to “match” those locations and be able to track your prior housing chronologically.

3. Charges from other people. If your account shows a bill from another taxpayer and they did not pay it off – Opps, it looks like that is your bill to the bureaus.

4. Ratios & Limits. Based on the credit bureau’s ratios and processing procedures, only a 2 point correction can make a big difference in your credit utilization ratio, which makes up 30% of your FICO Score.

5. Derogatory Comments. It doesn’t really seem that important whether there is something derogatory in your report, reflecting something negative that someone has said about you. However, if it is incorrect, it could cost you a couple of points and depending on the bureau’s rating chart, that might just be enough to keep you from being qualified.

This article is very informative and interesting. Take a minute and do a personal inventory. If you have a potential credit issue, do yourself a favor and study the whole article. You can access it by clicking here.

Tags: Best Home Values in Punta Gorda, Buying A Punta Gorda Home, Charlotte County, Coldwell Banker Morris Realty, Credit & Financing in Punta Gorda, Punta Gorda - Best Places to Live in the South, Sunshine State
Posted in Credit in Punta Gorda | 1 Comment »

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