The Best Mortgage Rates

Most consumers planning to obtain a home loan are looking around to find the best interest rate possible for their situation. This is an important aspect to financing because a small fluctuation in your mortgage rate can mean tens of thousands of dollars difference over the life of your loan.

Here are some important tips to use so you can minimize your mortgage interest rate and maximize the use of your money:

Raise your credit score:

Lenders will look at your credit score to determine whether they will continue looking at your mortgage application or reject it immediately. The best mortgage rates are generally obtained by consumers with a FICO credit score of 740 and up.

Achieving a 740+ credit score requires attention to the factors that make up your credit score, and how much impact they have: payment history (35%), credit utilization ratio (30%), length of account history (15%), recent credit inquiries (10%), and the types of credit you use (10%).

Make your payments on time and keep your balances as low as possible, while still using at least 1% of your credit limit. Using a small portion of your credit limit keeps your credit cards active in the FICO formula and maximizes the impact of the credit utilization portion of your FICO score.

Improve your debt-to-income ratio:

First, consider your “front-end” debt ratio, this is the amount of your pre-tax monthly income that goes toward your mortgage payment, this should not exceed 28%. Develop a detailed budget before applying for a loan so you understand what you can afford on a monthly basis.

Second, your “back-end” debt ratio, or the portion of your monthly income that goes toward all forms of debt pay off including; mortgage, student loans, car loans, etc. should not exceed 36%.

To appear as a lower-risk borrower, take care of your “back-end” ratio to improve your debt-to-income ratio, while also improving your credit utilization.

Consider short-term fixed-rate mortgage:

You have a good chance of getting the best mortgage rate possible by choosing a 15 year fixed-rate mortgage over a 30 year fixed-rate mortgage. This option can improve your interest rate by as much as 0.8% compared to a 30 year loan.

However one of the risks of utilizing a 15 year mortgage may outweigh the reward for many buyers. Having a much higher monthly payment will put strains on your budget and may cause late payments. Choosing a 30 year loan and paying it off sooner won’t give you a lower interest rate, but it will allow you to pay your debt more according to your own terms, avoiding potentially being strapped for cash when you run into an unforeseen hardship.

Larger down payment:

Lenders can give you lower mortgage rates for the life of the loan if they can get more money upfront. This is called paying for points. A point is 1% of the borrowed amount, the more points you can buy, the lower your interest rate will be. The longer you plan to hold the loan, the more it makes sense to pay for the points that will save you money.

No matter what course of action you take to lower your mortgage interest rates, utilizing a combination of all these methods will surely provide the best results. Get creative in your efforts and remember the end result – saving money!

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Each person’s credit situation is unique. Results may vary, and CreditServices.com makes no guarantee of any particular result. The information in this site is intended for general informational purposes only, and is not to be construed as legal, tax, accounting, or other professional advice.  As such, it should not be used as, or relied upon, as a substitute for seeking professional legal, tax, accounting, or other advice. All information in this site is provided “as-is”, with no guarantee of completeness, accuracy, timeliness, or other results obtained from its use. In no event is CreditServices.com, its Affiliates, or their agents or employees liable to you or anyone else for any decision made or action taken in reliance on the information in this site. “Affiliate” means any entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or common control of the party in question.

Are You Hurting Your Credit Profile?

Credit scores have a large impact on our financial success. Having a strong score means you have the opportunity to take advantage of the best available interest rates on mortgages, auto loans, refinancing student loans, even cheaper auto insurance. To get good interest rates, you typically need to have a score above 700, but the best deals will go to consumers with scores above 750.

Credit scores reward responsible behavior, if you live within your means and pay your bills on time you should have a good score. However, being responsible does not always mean that you will have a strong credit score.

Here are three common mistakes that responsible people make, costing them points on their credit score, and money in the long run.

  1. Having only one credit card, and using it for everything.

Many consumers limit themselves to one credit card and pay their balance in full every month. This is a great practice as you avoid getting charged interest on the account. However, using only one card could harm your credit score by driving up your credit utilization ratio, an important part of how your score is calculated.

Your credit utilization is the percentage of available credit that is being used. If you have a credit limit of $1,000 and a balance of $200, your utilization would be 20%. This is calculated for each individual credit card and across all credit card accounts. High utilization can have a significant negative impact on your score. Keep utilization below 20%, but if you want the biggest positive effect on your score, keep it between 1-3%.

Utilization is important to lenders for two reasons. First, high utilization shows them you can’t control your spending. If you consistently max out your credit cards, you appear to be very risky to lend to. Second, credit limits are calculated based on your income, so when you use too much of the credit available to you, banks will think you have too much debt relative to your income, whether you pay them off in full or not.

You can lower your utilization in two ways. First, you can make your credit card payments more frequently. Your goal is to keep your balances low, but still more than zero. Paying down your balance in the middle of the month will reduce your statement balance and your utilization. Second, you can ask your bank for a credit limit increase, which will increase your available credit, making your statement balance have a lower effect on your utilization.

  1. Not knowing what is on your credit report.

Strange things often appear on credit reports. Check your credit reports once a year to make sure that all accounts are accurate and up to date. If you see any incorrect information on your credit report, you need to take action. CreditServices.com is an industry-leading credit repair company, our Attorney-Reviewed service levels can help you get negative remarks removed from your credit report.

  1. Paying collection items first.

Every once in awhile, you may run into unforeseen problems and miss payments. Responsible consumers work hard to pay back all of the money they have borrowed. However, when it comes to your credit score, keeping active accounts current is more important than paying on a collection item.

Once a collection item appears on your credit report, the damage has been done. So skipping credit card payments to pay the collection will negatively impact your credit score even more.

Collections should be dealt with only after your obligation to active creditors has been fulfilled in order to maintain your credit score and avoid further damage. Also consider working with our Debt Settlement department to settle your collections and save yourself money.

Credit scores are complex.

Making the most of your credit score, and protecting your financial future is not easy. A lot of information goes into calculating your credit score, which can get overwhelming at times. Since credit is such an important factor in so many purchasing situations, you need to have a firm grasp on where your credit profile stands. CreditServices.com can help repair negative items on your credit report, while also teaching you how to better manage the accounts you have, and inform you as to if you should open or close any other accounts based on your current profile. Our Credit Advisors are experts on the FICO formula and can help you develop a better understanding of how to manage your accounts now and in the future.

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Each person’s credit situation is unique. Results may vary, and CreditServices.com makes no guarantee of any particular result. The information in this site is intended for general informational purposes only, and is not to be construed as legal, tax, accounting, or other professional advice.  As such, it should not be used as, or relied upon, as a substitute for seeking professional legal, tax, accounting, or other advice. All information in this site is provided “as-is”, with no guarantee of completeness, accuracy, timeliness, or other results obtained from its use. In no event is CreditServices.com, its Affiliates, or their agents or employees liable to you or anyone else for any decision made or action taken in reliance on the information in this site. “Affiliate” means any entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or common control of the party in question.

Save On Your Next Car: 6 Tips

Purchasing a new vehicle can be a very stressful situation. Make sure you do all of the research that you need in order to feel comfortable making your decision, and you won’t leave with a sense of buyer’s remorse.

Here are 6 important tips that will help you save money on your next car.

1.Find your financing before you shop.

It is widely known that paying cash will save you the most money on your new vehicle purchase (as you will not be paying any interest). However, if you are unable to dish out the cash, explore your financial options outside of the dealerships or car lots. Obtain pre-approval from your bank or credit union for the lowest interest rate possible, potentially saving you thousands. Independent financing will give you more buying power than relying on the finance department at the dealership.

  1. Check your credit profile.

The interest rate you receive depends significantly on your credit score. Your credit score is used by lenders to determine how risky it is to lend you money, and will adjust the interest rates according to their evaluation. In order to make sure the lender’s assessment of you is as accurate as possible, check your credit reports for inaccuracies. Do this a few months before shopping so there is time to fix these inaccuracies and improve the interest rate you receive.

  1. Compare available APRs.

Typically, the loan rates you are offered are shown as an annual percentage rate or APR. APR includes interest and fees, allowing you to compare loans in an apples-to-apples fashion. A lower APR will save you money over the length of your loan and lower your monthly payment. In order to determine which type of loan will work best for you, use an online loan calculator to experiment with loan amounts, interest rates and loan terms.

  1. Avoid long-term loans.

Longer-term auto loans have become increasingly popular as monthly budgeting concerns are often taken into consideration more than the total price paid over the life of the loan. Terms as long as 84 months are being reported more frequently than ever before. Though these loans are gaining in popularity, this does not mean they are a good idea. A longer loan will provide lower monthly payments but you will end up paying much higher interest. Keep your term as short as you can while still being able to fit it in your budget.

  1. Compare rates and terms.

Shop around for the best interest rates and loan terms available. A dealership may be able to offer you the best rates for your situation, with some new car purchases being financed at 0% for 60-72 months to buyers with great credit. If the dealership is not offering incentives on brand new vehicles, credit unions will likely offer you the best rates, educate yourself on your options.

  1. Focus on total cost.

Don’t get burned, concentrate on the total cost of the loan you are applying for rather than the monthly payment. The best options for lowering the total amount of your loan are to bring in a trade-in or a significant down payment.

The bottom line:

Do your research, exercise your options, and make sure your credit is going to help you obtain approval. If your credit leaves some room for improvement, CreditServices.com can help you.

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Each person’s credit situation is unique. Results may vary, and CreditServices.com makes no guarantee of any particular result. The information in this site is intended for general informational purposes only, and is not to be construed as legal, tax, accounting, or other professional advice.  As such, it should not be used as, or relied upon, as a substitute for seeking professional legal, tax, accounting, or other advice. All information in this site is provided “as-is”, with no guarantee of completeness, accuracy, timeliness, or other results obtained from its use. In no event is CreditServices.com, its Affiliates, or their agents or employees liable to you or anyone else for any decision made or action taken in reliance on the information in this site. “Affiliate” means any entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or common control of the party in question.

Make Credit Work For You!

Is your current credit situation helping or hurting your progress toward financial goals?

Credit is used by lenders, employers, landlords, and insurance companies to assess the risk you present to them. If you have good credit, you will likely be approved to borrow the things you want or need, and at great interest rates. If you have poor credit however, your chances of being denied for lending options is much higher, and you will certainly pay higher interest rates.

Because credit impacts so many aspects of our lives, bad credit is one of the most detrimental labels a person can be assigned in today’s credit driven society. Unfortunately for many people, their bad credit label is undeserved.

Take your power back! You are more than a credit score. A couple of mistakes or hardships can bring your score down for years. Take action for yourself now and for your future. Putting bad credit on the back burner means keeping your financial goals on the back burner.

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Each person’s credit situation is unique. Results may vary, and CreditServices.com makes no guarantee of any particular result. The information in this site is intended for general informational purposes only, and is not to be construed as legal, tax, accounting, or other professional advice.  As such, it should not be used as, or relied upon, as a substitute for seeking professional legal, tax, accounting, or other advice. All information in this site is provided “as-is”, with no guarantee of completeness, accuracy, timeliness, or other results obtained from its use. In no event is CreditServices.com, its Affiliates, or their agents or employees liable to you or anyone else for any decision made or action taken in reliance on the information in this site. “Affiliate” means any entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or common control of the party in question.

5 Ways Credit Affects Your Life.

Credit affects a number of aspects of our life; home loans, auto loans, and availability of extra funds, just to name a few. Here are 5 ways that poor credit can impact your life that you may not have thought about before.

  1. Access to Emergency Funds

Medical, home, pet, and auto emergencies happen, and they can come at the most unexpected times. Credit cards and emergency loans can help you make sure the expenses are covered, but a low credit score could keep you from obtaining either of these options.

  1. Damage Your Relationships

If you are unable to be approved for traditional lending, how will you be able to finance your large purchases? Turning to friends and family to borrow money, or cosign a loan is an option that quickly comes to mind. Late payments to creditors will hurt your credit profile, but being late on your promise to a friend could end your friendship.

  1. Renting

Many landlords will check a prospective tenant’s credit profile before allowing them to rent. The eviction process can be very expensive for a landlord, so a potential tenant’s missed payments could leave them without a lease.

  1. Interest Rates

There are ways to obtain approval for a loan or credit card with bad credit, but they usually come with very high interest rates. High interest rates can add up quickly on a home or auto loan.

  1. Quality of Life

Debt can prevent you from getting an education, a better job, and fulfilling your potential. Bad credit will only further this problem by forcing you to put your goals aside when you can’t get what you need to succeed in life.

Don’t let your credit hold you back, make it work for you!

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Each person’s credit situation is unique. Results may vary, and CreditServices.com makes no guarantee of any particular result. The information in this site is intended for general informational purposes only, and is not to be construed as legal, tax, accounting, or other professional advice.  As such, it should not be used as, or relied upon, as a substitute for seeking professional legal, tax, accounting, or other advice. All information in this site is provided “as-is”, with no guarantee of completeness, accuracy, timeliness, or other results obtained from its use. In no event is CreditServices.com, its Affiliates, or their agents or employees liable to you or anyone else for any decision made or action taken in reliance on the information in this site. “Affiliate” means any entity that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or common control of the party in question.