Preparing Financially for the Mortgage Process

Purchasing a home is exciting and adventurous. Home buyers, particularly first-time home buyers, typically don’t know a lot about the process of financing a home. To avoid making mistakes, you need to know what you should expect. It is important to consider the state of your credit, the additional costs besides just the down payment, and the important questions dealing with the future.

 

The Credit Aspect

Your credit score is one of the first things a lender will look at when you apply for a mortgage. To cut through all that confusion, here are five tips you can act on right now:

  • Check your credit reports for free once a year through the three credit bureaus: Equifax, Experian, and TransUnion. Why all three? Because the information in each of the three bureaus’ reports can differ. If one or all of the reports include mistakes, your credit score may be negatively affected, and you may need to address the errors before going house shopping.
  • Be strategic with credit card use. The percentage of your credit limit that you use every month can affect your score. Make sure your balance doesn’t come too close to your limit.
  • The simplest and most important tip? Pay off your balance each month. To maintain a healthy score, pay off the balance before the due date. Anything after 30 days past the due date can spell very bad news for your score.
  • Be consistent. Good credit behavior over the long term will keep your score high.
  • Don’t take on more credit. If you apply for several different credit cards, you’re sending a message that you may have maxed out your other accounts

 

Save enough for the down payment and other additional fees

You should plan to make a down payment of 3.5% – 5% at the very least when you are determining affordability. It is important to consider that down payments are not the only costs associated with the purchase of a home. Your lender should be able to provide you with a breakdown of your costs that you will be paying upfront and on a monthly basis. Here are some basic tips to help you save for the costs associated with buying a home:

  • Start a budget: Making a budget allows you to see your expenses, how much money is coming in, and what is left over to save or pay off debts. When you have a savings goal it, helps prioritize your money by eliminating or cutting down on unnecessary expenses.
  • Automate: Once you have created a budget and figured out how much you can comfortably save each month or paycheck, set up a specific amount or percentage of your paycheck to go to savings automatically. For some, it helps to open up an entirely separate savings account for their home’s down payment and expenses. This method allows you to see how much you are saving specifically for the home buying process and keeps you from accidentally spending this money on something other than your new home.
  • Increase your income: If you are worried about cutting back expenses, or just want to save for your down payment faster, consider finding ways to increase your income. Some ideas include working overtime, getting a second job, or finding alternative ways to making money such as selling items online.
  • Save any unexpected money: When you get a large sum of money, such as a bonus or your tax refund, itis all too easy to take on the extra cash and purchase that one expensive thing you’ve had your eye on for months. Instead of going on a shopping spree, take that money and put it into your savings right away to help you achieve your dream of homeownership sooner.

 

Affordability now and in the future

Regardless of the level of income you have today, you need to figure out what the future may hold before you sign on the dotted line. For example, if you’re planning to have kids sometime down the road, how will these happy additions impact your family income? What effect will job changes have on your current income level? And have you planned for monthly payments into your rainy day savings account?

Everyone who looks to buy a home will have a payment amount that is affordable today, but in the face of your answers to the questions above, will that number still work for you down the road? These are some questions to consider as you think about homeownership.

 

Feel free to talk with a loan officer in your area to determine if homeownership is the right path for you!

Maintain a Healthy Credit Score

Healthy-Credit-ScoresMaintain Healthy Credit Score

Maintaining a healthy credit score will make your life easier when it comes to obtaining credit cards, mortgage loans or even insurance. As a general rule, a higher credit score makes it easier and less expensive to obtain a mortgage loan, credit card or insurance coverage. Credit scores typically range from 300 to 850, with the 750 to 850 range being considered excellent.  Most people do not have excellent credit though – according to myFICO, the median credit score in America is 713. But don’t fret – if you have a lower credit score than you want, there are ways to improve it.

In an effort to help you achieve more favorable financing terms on your home mortgage, or any line of credit, we summarized a few fundamentals to guide you in establishing and maintaining a healthy credit score.

The somewhat obvious:

  • Borrow only what you can afford to repay
  • Make all of your payments on time
  • Avoid excessive requests or inquiries for credit
  • Have an emergency account to pay for unexpected expenses
  • Check your report annually to contest and remove any erroneous information

The not so obvious:

  • Do not open new store credit cards just to save on a purchase. New accounts can lower your score and too many payments can be difficult to manage. Saving 10% on a $300 lawn mower means little if it costs you even just fractionally more on a $300,000 home loan.
  • Do not open new accounts just to transfer balances for an introductory rate. In addition to possibly lowering your score, these offers often have traps. Instead, use them to leverage a lower rate from your existing card company.
  • Do not close old accounts. If you have a good record of payments on old accounts, these will benefit your score. Using them occasionally and conservatively will keep them active and contribute toward a good score.
  • Do not be afraid to use credit. Without the use of credit, you will have no score, and that can be just as bad as a low one.
  • Keep a high credit line and a low balance. Credit utilization ratios measure this relationship and lower is better.
  • Maintain a variety of account types. A combination of revolving, installment and secured financing along with excellent records of payment will yield a higher score. But don’t run out and open an account just to have diversity, as this is the least influential factor.

Remember, if you have questions about managing your credit or your eligibility for a mortgage loan, we are here to help. Locate a licensed Inlanta Mortgage loan officer using our branch locator or apply online today and we will connect you with a loan officer in your area.

ABOUT INLANTA MORTGAGE

Headquartered in Brookfield, Wisconsin, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac and Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs.

Inlanta Mortgage was recently named a Top Workplace for a third time in 2015. Inlanta has also received the Platinum Million Dollar USDA Lender Award and has been recognized as a Top Mortgage Employer by National Mortgage Professional and a Top 100 Mortgage Banking Company and 100 Best Mortgage Companies to Work For by Mortgage Executive Magazine.

Inlanta Mortgage, Inc. NMLS #1016

Should You Opt Out of Credit Offers?

Credit-Offers-Opt-Out

Where Do Pre-Approved Credit Card Offers Come From?

Consumer credit reporting companies, like Experian, Equifax and TransUnion, allow companies to pull lists of individuals meeting specific credit criteria to send pre-approved or pre-screened offers of credit or insurance (referred to as “Firm Offers”).

Benefits of Receiving Firm Offers (Pre-Approved Credit Offers)

According to the official Consumer Credit Reporting Industry website that processes requests from consumers to Opt-In or Opt-Out of firm offers of credit or insurance, there are benefits to allowing firm offers:

  • Consumers are provided with product choices
  • Consumers learn about and have an opportunity to take advantage of offers that may not be available to the general public
  • Firm offers help consumers to “comparison shop”, which may increase a consumer’s buying power.

In fact, there is an entire PDF focusing on the benefits of continuing to allow unsolicited credit offers. Click here to view the PDF.

Put an End to Unsolicited Credit Offers

If you feel the benefits of receiving pre-approved credit or insurance offers do not outweigh the risks – you are not alone. Many people feel that it’s far too easy for identity thieves to steal your mail or your garbage and use a pre-screened credit card offer to obtain credit in your name. Visit optoutpresecreen.com to opt out from receiving firm offers. You can always choose to opt-in again at a later time.

What are Trigger Leads?

Want another reason to opt-out? If you are in the process of buying or refinancing a home, once your credit has been pulled for a mortgage application (as required), the credit agencies actually sell this information to “trigger lead” companies. They sell the fact that you are contemplating a home purchase or refinance. This has nothing to do with the mortgage company you are applying with. Once your information is sold, you can find your phone ringing regularly even if you’re on the “Do Not Call” list. Worse still, the companies that resort to purchasing these trigger leads have been known to misrepresent themselves or engage in bait and switch tactics. Use of trigger leads is not permitted at Inlanta Mortgage.

Trigger leads get re-sold many times over. Some of the less savory characters that purchase trigger leads might contact you under the guise of being your lender and try to extract important personal information. For safety’s sake, NEVER provide your social security number or mother’s maiden name over the phone. Want to do more? Tell your Congressional representatives at (202) 224-3121 to stop the credit agencies from selling your information.

Assure Your Security and Peace of Mind

Fraud and identity theft are not things you want to face at any time. Identify theft can take a long time to resolve. Opting out of pre-approved offers is free and only takes a couple of minutes. That’s far less than the time you could spend shredding unwanted mail, dealing with unwanted calls, or trying to come back from identity theft.

Go to www.optoutprescreen.com to opt out today.

If you believe you may have already been targeted or defrauded, contact the Federal Trade Commission at 1 (877) 382-4357.

Choose a Mortgage Company You Can Trust

Not every mortgage company relies on shady tactics to earn business. Inlanta Mortgage relies on relationships and referrals. The majority of our customers are referred to us from Realtors or past customers. If you or someone you know is considering a home purchase or refinance, visit our mortgage application page to apply right away or use our branch locator to find a loan officer near you.

About Inlanta Mortgage

Headquartered in Brookfield, Wisconsin, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Our mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac and Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs.

Inlanta Mortgage was recently named a Top Workplace for a third time in 2015. Inlanta has also received the Platinum Million Dollar USDA Lender Award and has been recognized as a Top Mortgage Employer by National Mortgage Professional and a Top 100 Mortgage Banking Company and 100 Best Mortgage Companies to Work For by Mortgage Executive Magazine.

Inlanta Mortgage, Inc. NMLS #1016

DO’s & DON’T’s of Credit Card Use

Responsible Credit Card Use

Responsible Credit Card Use

Why should we care what you do with your credit cards? As responsible lenders, we want to educate prospective home buyers that may need a little help in the credit department. Why? Responsible credit card use can improve credit scores and assist with a smooth mortgage loan approval process – something that we all want. With that said, here are a few tips for responsible credit card use.

DO’s & DONT’s of Responsible Credit Card Use

  1.  Don’t Use Your Card for Everyday Purchases –  A credit card should not be used as a substitute for cash. Those that use their credit cards to purchase gas, groceries and other disposable items are more likely to build debt. For everyday purchases, pay with your debit card not your credit card unless you plan to pay off your balance in full every month (which most people don’t do).
  2.  Do Pay More Than the Minimum Payment – Have you really every looked at your credit card statement? Somewhere on your statement is a little table that says how many years it will take to pay off your credit card debt if you only make the minimum payment. The minimum payment is simply the lowest amount you can pay without your account going into default or incurring fees and penalties. Look below for an example of a minimum payment table. Look for this type of table on your own credit card statement.
  3. Don’t Close a Credit Card Account – While it may be a good idea in some cases, closing a credit card account can sometimes hurt your credit score. Avoid closing cards that have a balance or are a significant part of your credit history. If you are considering a home purchase, consult a licensed mortgage loan officer before closing or opening any new accounts. A loan officer can help you make a decision that will be most beneficial to your credit score – a key part of the mortgage loan approval process.
  4. Do Try and Negotiate a Lower Interest Rate – If you are receiving offers for credit cards that offer lower rates than your current card, contact your credit card company and discuss the offers you are receiving and if they are willing to work with you. Don’t be afraid to remind them how many years you have been a customer or how many months you have made consecutive on-time payments.
  5. Don’t Use Credit Cards to Buy Things You Can’t Afford – If you can’t afford a purchase today, you are not likely to afford it anytime soon. Spending more than what you make is easy to do with credit cards and can lead to longer term debt problems. The sooner you adopt healthy habits for credit card use, the better.

credit card minimum repayment table

Credit Cards and Credit Scores

Your credit report records your credit card balances, your minimum monthly payments, and whether you make payments on time. High credit card balances (relative to credit limit) and late payments can be detrimental to your credit score. If you are interested in becoming a home owner, a good credit score is essential. Inlanta’s loan officers can assess your credit situation and give you advice on how to improve your credit score. Use our branch locator to contact a licensed mortgage loan officer near you.

About Inlanta Mortgage – Celebrating 20 Years

Celebrating its 20th Anniversary, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS #1016. Inlanta Mortgage is proud to be named to the Scotsman Guide Top Mortgage Lenders 2012 list and to be among the Top 100 Mortgage Banking Companies in America in 2012 and Fastest Growing Milwaukee-Area Firms.

 

5 Tips for Establishing Credit

Establish Credit History

Credit History is Essential to Loan Approval

Are you interested in purchasing a home? In order to purchase a home, your lender will need to evaluate your credit history. So what happens if you don’t have a credit history? Assuming you have confirmed your meager credit history with an updated credit report (get a free credit report every 12 months from each of the nationwide consumer credit reporting companies at www.annualcreditreport.com), here are 5 tips on how to begin establishing your credit.

5 Tips for Establishing Credit

1. Bank Accounts  – If you don’t have a bank account, you need one. This is an easy process that can often be completed online. If you are not sure which bank to choose, begin by asking your friends and family for recommendations. After opening your account, make sure you carefully balance your account on a regular basis and avoid any overdraft charges. Even though this activity is usually not reported to the credit bureaus, lenders inquire about bank accounts on credit applications.

2. Apply for Credit Wisely – Do not apply for too much credit at once. This can appear as though you’re desperate for credit and perhaps make lenders less inclined to extend credit to you. In addition, too many credit inquiries can have a negative impact on your credit score.

3. Vary Your Credit Types – Credit scoring models value having different types of credit. In plain English, it is beneficial to have both revolving accounts (credit card) and some installment accounts (like a car payment). As always, paying bills on time every time is essential to building your credit.

4. Consider a Co-Signer – Obtaining a loan in the absence of any credit history can be difficult, sometimes requiring a co-signer to guarantee payment. The loan is usually structured where the primary borrower is expected to make the payment, with the pay history reported in both names. If the borrower defaults, the lender will approach the co-signer, and missed payments will be reflected on both credit files. There is somewhat of a risk to the co-signer, but if handled responsibly, co-signing can be an effective way to help another person obtain and build credit.

5. Consider a Secured Credit Card – If you are unable to get an unsecured credit card, many financial institutions offer secured credit cards. Your secured credit account activity is reported to the credit bureaus each month and after making responsible payments on a secured card you will be more likely to get an unsecured card.

Good luck on your journey towards homeownership!  We hope these tips for establishing credit will help you on your path. We strive to provide useful information for home buyers at every stage of the buying cycle. Check back often for other first time home buyer tips and news!

Feel free to contact one of our licensed mortgage loan officers at any time to discuss specific loan program qualification requirements. Use our branch locator to find an Inlanta Mortgage office near you.

About Inlanta Mortgage

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS #1016. Inlanta Mortgage is proud to be named to the Scotsman Guide Top Mortgage Lenders 2012 list and to be among the Top 100 Mortgage Banking Companies in America in 2012.

First-Time Home Buyer Tips

First-time-home-buyers

Fixed mortgage rates are low, home prices are rising, and homeownership is a great way to accumulate wealth in the long term. Are you ready to buy your first home?

Get the Ball Rolling – Now

Are you considering homeownership?  We recommend home buyers start preparing six months in advance of house hunting – or as soon as possible. Why? First-time home buyers often need time to reduce debt obligations, save up for a down payment, or improve their credit to meet program requirements. If homeownership is something you are considering, use our branch locator to contact a licensed Inlanta Mortgage near you. Inlanta loan officers will help you get on the right path to homeownership.

Improving Your Credit Score – Home Buyer Tips

Why does your credit score matter? Your credit score will help determine the interest rate you get and the loan programs you are eligible for. Higher credit scores enable borrowers to pay lower interest rates. If you haven’t already considered improving your credit score – it’s never to late to start. Here are a few credit tips for potential home buyers:

1. Check Your Credit.

Make sure the information on your credit report is accurate and up-to-date. Get a free copy of your credit report every year from each of the three major credit reporting bureaus at www.annualcreditreport.com. If you have already applied for a mortgage loan, your loan officer will have already pulled your credit report and should be able to advise you on aspects of your credit report that may require attention.

2. Pay Bills on Time

This sounds like a no-brainer but it is important. Lenders want to see a good payment history. Generally, if you pay your bills within 30 days of the due date your late payment will not be reported to the credit bureaus. However, you will accumulate unnecessary and costly late fees.

3. Pay Down Balances

The amounts of debt you have weighs heavily on your overall credit score. If you can pay down balances – your credit will improve. Generally, it’s reasonable to keep your credit card balances at or below 30% of your credit limit. It also makes sense to pay down higher interest card balance before lower interest card balances.

Each loan program that Inlanta Mortgage offers has different requirements. Contact a licensed loan officer to see which programs you are eligible for. Inlanta loan programs include FHA, VA, USDA, 203K, Jumbo, and conventional mortgages. Some loan programs offer no down payment options.

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

How To Buy a House

How to Buy a House

Tips for Buying a House

Buying a house is a big deal! Here are a few tips you may find useful as you embark on your home buying adventure!

1. Check your credit.

Most people need a mortgage to buy a house. Since the terms of your mortgage loan will be dependent on your credit history, make sure you know what condition your credit is in. You’ll want to make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Consult a licensed mortgage originator to discuss your credit and to determine your best course of action moving forward. Inlanta Mortgage originators can offer practical advice on credit repair and refer you to reputable credit repair specialist if necessary.

2. Look for a home you can really afford.

Utilize our How Much Can I Borrow Calcuator to get an idea of what you can afford. For a more accurate assessement, we recommed you contact a licensed mortgage originator for a pre-approval. Use our Branch Locator to find an Inlanta lending professional near you and submit your application for pre-approval.

3. If you can’t put down the usual 20 percent, you may still qualify for a loan.

Inlanta Mortgage offers mortgage loan programs that do not require a 20 percent down payment. Inlanta currently offers conventional mortgage loans that offer as low as 3% down payments. Eligible veterans can take advantage of the VA Mortgage Loan program which offers a no down payment option. Review our mortgage loan programs or contact a licensed loan orginator for a free, no obligation consultation.

4. Buy in a district with good schools.

Don’t have kids? In most areas, this advice still applies. When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values. A Realtor can advise you on school districts, neighborhoods and more.

5. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional Real Estate Agent. Buying a house is a big decision –  best made with the assistance of a professional.

6. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, a pre-approval from a lender is based on your actual income, debt and credit history. Read Get Mortgage Pre-Approval Before House Hunting for more information.

7. Hire a home inspector.

A home inspection is not the same as an appraisal. An appraisal is a written estimate of a property’s market value. Lenders require appraisals to determine the appropriate loan amount. A home inspector will check the home’s roof, basement, heating system, water heater, etc. A home inspector will be able to point out potential problems that could require costly repairs down the road. The home inspector’s report will help you make a more informed decision regarding a real estate purchase.

Buying a home is the largest single investment that most Americans will make. Trust a professional to help you with this decision. Contact an Inlanta Mortgage loan officer near for more information on qualifying, available loan programs, the loan process, and more. Use our branch locator to find an Inlanta Mortgage office near you.

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

Credit Tips for Home Buyers

Credit Tips for Home Buyers

You’ve heard it all before. Rates are low, house prices are rising, and homeownership is a great way to accumulate wealth in the long term. So everyone should run out and buy a house, right?

Before you make any major decisions,  you may want to make sure your credit is as prepared for this investment as your heart is. While taking the time to consider where you want to live and how much house you can afford – you should also take the time to review your credit report.

Your credit score will help determine the interest rate you get. Higher credit scores enable borrowers to pay lower interest rates. If you haven’t already considered improving your credit score – it’s never to late to start. Here are a few credit tips for potential home buyers:

1. Check Your Credit.

Make sure the information on your credit report is accurate and up-to-date. Get a free copy of your credit report every year from each of the three major credit reporting bureaus at www.annualcreditreport.com. If you have already applied for a mortgage loan, your loan officer will have already pulled your credit report and should be able to advise you on aspects of your credit report that may require attention.

2. Pay Bills on Time

This sounds like a no-brainer but it is important. Lenders want to see a good payment history. Generally, if you pay your bills within 30 days of the due date your late payment will not be reported to the credit bureaus. However, you will accumulate unnecessary and costly late fees.

3. Pay Down Balances

The amounts of debt you have weighs heavily on your overall credit score. If you can pay down balances – your credit will improve. Generally, it’s reasonable to keep your credit card balances at or below 30% of your credit limit.

4. Approved?  Now Don’t Charge ANYTHING!

Before your loan closes, your lender may pull a second credit report. You financing can fall apart if after you initial application you run up credit balances, apply for a car loan, or anything else that would affect your credit score. There will be plenty of time for shopping after your loan closes – don’t risk it.

Each loan program that  Inlanta Mortgage offers has different requirements. Contact a licensed loan officer to see which programs you are eligible for.  Inlanta loan programs include FHA, VA, USDA, 203K, Jumbo, and conventional mortgages.

Inlanta Mortgage is proudly celebrating twenty years in business. Learn more about Inlanta’s twenty year history here.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

Improving Your Credit Score

Credit Score

FICO® Scores

Do you have a stellar credit score?  According to the developers of the FICO® score, Fair Isaac Corporation, individuals with great credit seem to have “strikingly similar” credit habits regardless of background or life experience. The FICO® score is the best known and widely used credit score model.

FICO® scores range from 300 to 850. You are considered a high achiever if your FICO® score is greater than 785. But don’t fret if you score isn’t there yet, says credit score advisor for myFICO, Anthony Sprauve.

“Higher credit scores can be the key to achieving some of life’s most important dreams: buying a new car, owning a home, putting a child through college, or taking a dream vacation,” said Sprauve. “The good news is that by understanding and consistently practicing behaviors that can lead to high credit scores, anyone can become a FICO® High Achiever.”

Who are these “High Achievers”?

In a recent press release, myFICO reveals details about people with high FICO® scores:

  • High achievers have an average of seven credit cards including both open and closed accounts.
  • High achievers have an average of four credit cards or loans with balances.
  • One-third of high achievers have total balances of more than $8,500 on non-mortgage accounts; the remaining two-thirds have total balances of less than $8,500.
  • 96 percent of high achievers show no missed payments on their credit report, but of those who do, it happened four years ago, on average. Less than 1 percent of high achievers have an account past due.
  • Even some of those with a sterling FICO® Score may have had some bumps along the way. Approximately one in 100 high achievers has a collection listed on their credit report and approximately one in 9,000 has experienced tax liens or bankruptcies.3
  • FICO® high achievers have a well-established credit history and seldom open new accounts. Their oldest credit account was opened an average of 25 years ago and their most recent credit account averages 28 months old. Overall, their average credit account is 11 years old.

Consistent Behavior is Key

“Because a high FICO® Score is typically achieved over time and takes into account dozens of variables, there are no ‘quick fixes’ for rapidly improving scores or repairing bad credit,” said Sprauve. “Practicing good credit behavior consistently over time and regularly checking your credit report for errors can be instrumental for achieving a high credit score, which can lead to better loan terms and lower interest rates. Achieving good credit health is a long distance event, not a sprint.”

Interested in buying a home or refinancing your existing mortgage? Consult a licensed mortgage loan professional to discuss your personal financial situation. Inlanta mortgage professionals can assess your credit situation, issue pre-approvals, or provide advice on credit restoration. Find a licensed Inlanta loan officer near you.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

Should You Correct Your Credit Report?

Heartland Credit Restoration is Inlanta Mortgage's preferred provider of credit restoration services.

Heartland Credit Restoration is Inlanta Mortgage's preferred provider of credit restoration services.

Disputing information on your credit report may hinder you ability to attain home financing. Before taking any steps to correct your credit report, consult an Inlanta Mortgage loan professional or a credit repair expert.

Sam Parker, credit repair expert and Vice President of Heartland Credit Restoration explains some common misconceptions about mortgage loan financing and credit reports. For more information or further questions email Sam at sam@hcrepair.com or visit www.heartlandcreditrestoration.com.

Many people are under the impression that paying off a collection, charge off, or profit and loss will increase their credit scores. Unfortunately, not only will your scores NOT increase but they will actually GO DOWN! It seems a little backward right? You pay a debt and you get dinged for it.

Here’s why! Once a debt goes to collection, the balance is no longer a factor. This means that technically a $5 collection will hurt you just as much as a $5000 collection. The only real factors that matter to your credit scores once a debt has been placed for collection are the DATE OF LAST ACTIVITY and the M.O.P RATING attached to the item. (I’ll explain MOP ratings in the next discussion) .

For the sake of this discussion lets pretend that you have a collection which was last active in October of 2005, this item would have a “9” rating attached, which is negative.

As time passes between present day and the date of last activity this negative item hurts your credit less and less. When you pay this negative item it updates the date of last activity to the current month and year HOWEVER the 9 rating attached to this item remains the same. What does this mean for you and your credit score? It goes down because to the scoring algorithms it appears that a new 9 rated (negative) account just hit your credit.

Some might say it’s best to NOT pay collection then. Unfortunately if left unpaid for too long, most collections will go to a Judgment status, meaning that this debt is confirmed by a court and must be paid.

So what can you do to avoid a mess like this? Get it in writing! If you’re going to pay a collection first get something in writing from the creditor stating that once your debt has been paid, they will either remove this negative item from the credit or update the item to an “unrated status”.

I hope this helps! Feel free to ask questions!

As you’re looking through the credit report what you want to pay attention to is the “rating column.” As most of you know there is a rating system which goes 0-9. It will usually looking something like R9, I9, I1, I9, etc…. The letters before the number are referring to the type of account….R meaning Revolving, I meaning Installment, etc. The number following the letter refers to its status. Below I have listed what each number means.

R0 – Too new to rate. Approved but not used.
R1 – Pays within 30 days of billing or as agreed.
R3 – Pays in more than 30 days, but less than 60 or when next payment is due.
R4 – Pays in more than 60 days, but less than 90 or when two payments are due.
R5 – Account is at least 120 days past due but is not yet rated R9.
R6 – No rating exists.
R7 – Paid through a consolidation order, consumer proposal or credit counseling debt management program.
R8 – Repossession
R9 – Bad debt, or placed for collection or bankruptcy

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