Author: buyorsellyourhome

It sounds crazy, you take on new debt and it may help your credit score?
It’s true, though.
Taking on a mortgage may lower your credit score initially, but over time, it will help it like no other debt can. Your mortgage is likely one of the largest debts you’ll have, so knowing how it affects your credit score long term is important.

Are you worried that you don’t have enough money to put down on a home? Do you feel like you’ll be stuck renting forever?

We know it can feel that way, but we have great news. First, you don’t need a large down payment in most cases. You can get away with as little as a 3.5% down payment on an FHA loan or 3% on a conventional loan. That’s just a fraction of the typical out of pocket cost to buy a home.

In the face of the coronavirus pandemic, millions of homeowners are looking at every avenue to get money. The economy’s slippery slope drained many bank accounts, leaving millions of consumers wondering what now? How will you get the money you need?

All you ever hear in mortgage financing is that you need perfect credit, right? What if you don’t have perfect credit? Maybe the pandemic took its toll on you and your credit score fell. Are you unable to refinance or get a new mortgage anytime soon?

There is still hope, as long as you have other compensating factors.

Did you enter a forbearance agreement with your lender when the COVID-19 crisis began? Maybe you lost your job, were furloughed, or have reduced hours. The CARES Act made it easy for you to put your mortgage into forbearance. The plan allowed you to stop making payments for 3 months. Now that the 3 months are almost up, now what?

Lenders look at your credit score before anything else. That three-digit number tells them a lot. If it’s not a great number, they may turn you away or give you less than optimal mortgage terms.

Do you want the best mortgage terms? Raise your credit score before you apply for a loan.

It’s not as hard as you think. It overwhelms many people to think of their credit score, but like anything else in life, with a little knowledge, you can make changes.

With today’s low rates, a 15-year loan may be more affordable than you think.

Considering the 15-Year Refinance

Here are the obvious facts – you pay your loan off in 15 years rather than 30 years. You own your home in half the time. Sounds appealing, right? It is, but for the right borrower.

In March, the federal government put into law the CARES Act which helped affected homeowners put their mortgage into forbearance. The initial plan allowed homeowners to stop making payments on their mortgage for 3 months without risking a penalty or foreclosure.

As we near the end of the 3 months, many homeowners wonder, what now? The forbearance plan doesn’t erase your debt – it gives you temporary relief. You may make the payments if you can afford them or you can wait, but your credit score won’t drop and your lender can’t assess penalties.