…ARM mortgage is about to reach the end of its fixed period, you may be able to avoid paying substantially higher mortgage payments by refinancing your Adjustable Rate Mortgage and converting to a Fixed Rate Mortgage. A Fixed Rate Refinance is a very popular option, and if you have equity in your home you may be able to refinance into a secure fixed rate with little to no out of pocket cost.
…errors you could end up over-paying on your next mortgage. Any time you are about to apply for a mortgage you should first obtain a copy of your credit report and examine it carefully for errors. Correcting credit report errors can take some time so start the process as soon as you recognize the mistake.
…can afford your mortgage payment after the rate increases, call your local mortgage broker today to discuss your options while you still have some!
…ons reported on your credit report that are several years old, consider not to pay them off. Paying off a collection can update that account, making it current which can bring down your scores. The older the derogatory items on your report are, the less of a negative impact it is on your report.
…contacting a mortgage professional regarding refinancing into a fixed rate program, it is best to do so at least two months before your mortgage is scheduled to adjust. Even if your particular ARM program came with a pre-payment penalty, your mortgage professional can schedule your refinance in such a way that you will avoid this penalty.
…increase your credit score is to pay your credit card balances down below 50% of the high credit limit. For example, if you have a $1000 limit, pay your balance down below $500. The lower the balance, the better.
…from your current ARM’s first adjustment, now might be a good time to contact a mortgage professional to begin planning your next step and evaluating your options. Putting a plan in place before your mortgage adjusts could result in substantial savings.
…your credit is to consistently pay your bills on time. Also make sure your review your credit report and dispute and inaccuracies.
…interest rate will increase after the initial period. You should consult with a mortgage broker to analyze the cost savings of refinancing at this point.
…of inquiries against your credit to a minimum and this will have a positive affect on your credit and will help to increase your credit. Do not go out and apply for every credit card offer so that you can receive the cool free gift they are offering, do not apply for various loans all year round, and keep the number of applications for any type of credit to a minimum.
…many borrowers are looking to convert their ARM loans into a fixed rate mortgage.
…your credit score is to make a small purchase with a credit card that currently has a zero balance. This serves to activate the tradeline with the credit bureaus. Having a small balance with a high credit limit is looked upon favorably by the credit bureaus as well.
…on the number of percentage points it can go up each year. It also has caps on how much it can go up for the life of the loan. This happens according to the terms of the loan you choose. For example- your mortgage starts at a rate of 4%. If you have a yearly cap of 2 points, and a life long cap of 6 points, this is what can happen to the percentage rate of your loan. At the end of one year your mortgage company can increase your rate by two points, to 6%. At the end of the second year, your mortgage company can increase your rate by 2 points, to 8%. (A total of 4 percentage points higher than the original term of the loan.) At the end of the third year, your mortgage company can increase your rate by 2 points, to 10%. A total of 6 percentage points higher than the original terms of the loan.) At this point you have had an increase of 6 percentage points and can no longer have your interest rate raised for the life of your loan. Of course these changes are tied to the index that your ARM is based on.
…there are a number of things you can do. The easies thing to do is to hire a credit repair company to help you remove negative items on your credit report. The only drawback to using a credit repair company to increase credit is the cost involved. Credit repair companies can charge anywhere from 200-2000 dollars to increase your credit. If you have some time and are willing to work on it yourself there are some things you can do that will increase your credit in a short period for little to no money!
…rate mortgage during an adjustment period review the following loan documents: NOTE and RIDER.
Your NOTE will outline the terms of your mortgage. It will indicate your rate and the terms of your loan. If you have an adjustable rate mortgage your loan documents will have an adjustable rate mortgage RIDER. This rider will outline the index, the margin, and the terms of the adjustment.
…of a lender for your terrible credit contact a mortgage broker. Mortgage broker’s will have access to numerous lenders and may be able to find a loan for your situation.
…Rate Increases on your ARM / Adjustable Rate Mortgage, it may worthwhile for you to evaluate your options, for example obtaining a mortgage with flexible minimum and/or interest only payments, or consider taking cash out of the property to separate it from the equity or consolidate debt.
…you from applying for a mortgage. Many lenders have programs that are short-term; allowing ample time to help rebuild your credit by adding positive trade lines, so in the near future, better rate/payment loans will be available to you with those improved scores.
…an ARM mortgage is fixed for an introductory period ranging from 1 month to 10 or more years. Most Adjustable Rate Mortgages have a fixed, or “teaser” period of 2 or 3 years (2/28 or 3/27 are the industry terms for these ARM loans).
After the ARMs introductory period expires, the rate on your ARM may increase. If you took out your ARM mortgage in the past 5 years, you can safely assume that your new adjustable rate will increase dramatically immediately at the end of the 2 or 3 year fixed period. On some ARM loans, the increase to the new adjustable rate may cause your payment to as much as double.
…with terrible credit are your equity and ability to repay. There are programs for borrowers with terrible credit as long as you have at least 25% equity in your home. You will need to write a letter of explanation to explain your credit history and why you now feel you can make your payments.
…specific credit score requirement, an FHA Refi does require a clean 12 month mortgage credit history. Any consumer derogatory need to be properly explained in a letter of explanation.
…can also help identify the steps involved in verifying and resolving credit issues, especially where inaccuracies are involved.
…companies are approved by the government to offer FHA loans to the public. Working with an FHA approved mortgage company is a great way to ensure that your mortgage refinance experience goes smoothly and honestly, even if you aren’t refinancing an FHA loan.
…avoid the habits that caused poor credit to begin with. Ask your preferred Mortgage Professional which items on your credit history are most damaging to your FICO. It takes time to turn bad credit around, but the results will save you thousands on your next home loan.
…Refi even if you are currently paying on a Chapter 13 Bankruptcy. You would simply need the Trustee’s permission, a clean 12 month mortgage and bk history, and an acceptable appraisal. Call your mortgage professional to see if you qualify.
…credit and own a home, you should obtain a copy of your credit report and review it with a mortgage professional. Check your report for errors or inaccurate information. Many times you can raise your credit score or devise a plan to improve your credit by reviewing your complete credit history.
…with cash-out to consolidate debt, make home improvements, or take out cash for whatever you like up to 95% of the value of your home. Unlike other loan programs, there is no risk based pricing adjustment for taking cash-out to 95% of the value of your home with an FHA Refi.
…credit and are in need of a lender to finance your mortgage you do have options. Sub prime lenders have specifically marketed to borrowers with terrible credit and offer purchase and refinance mortgages to terrible credit borrowers. Although almost all sub prime lenders require at least a credit score of 500 to qualify for a loan.
…First Time Home Buyers. While the current “credit crunch” has pushed many would be buyers out of homes, FHA does not have a minimum credit score requirement. Whether your score is a 525 or a 500 you qualify for 97% financing with a 6% sellers concession.
…on up to a 4 unit property with no pricing adjustments. The property must be owner-occupied and FHA Loan Limits apply, although the loan limits increase with each unit in a property. Contact a mortgage professional for FHA loan limits in your area.
