THE FINANCE LADY

PLACING THE EMPHASIS ON THE PEOPLE AND THEIR FINANCES
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Frequenty Asked Questions:
 
Q: How does my credit score affect the options that I have regarding mortgage financing?A. Your credit score dictates a number of things when it comes to mortgage financing.  The rate, down payment, loan program, and availability of suitable loan products are all determined by your credit score. The higher your credit score the more favorable options you have at your disposal.  Lower credit scores generally mean higher cost associated with financing and often require a higher down payment. A "good" credit score begins at 620 and extends to 850. This range of scores will often afford you the opportunity to explore various loan programs with competitive rates and little to no down payment.  Please keep in mind that NOT all loan programs have credit score requirements and that by seeking the advice of a trusted and seasoned mortgage professional, you could learn more about what's available to you as you diligently work on getting your credit scores up.
Q: How can I increase my score?
  • A: Increasing your credit score requires discipline, diligence and a determined effort.  While it is difficult to increase your score over the short run, here are some tips to increase your score over a period of time.
    • Pay your bills on time. Late payments and collections can have a serious impact on your score.
    • Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
    • Reduce your credit-card balances. If you are "maxed" out on your credit cards, this will affect your credit score negatively. The "rule of thumb" is that you charge no more than 50% of your available credit limit.
    • If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.
  • Seek the advise of your mortgage professional to develop a workable plan of action to attack those derogatory entries on your credit report to pay all unpaid collections, charge offs, tax lien and judgments. 
 
Q:  What if there is an error on my credit report?
A:  If you see an error on your report, report it to each of the credit bureaus.  The three major bureaus in the United States are:   Equifax (1-800-685-1111), Trans Union (1-800-916-8800) and Experian (1-888-397-3742) all have procedures for correcting information promptly. Alternatively, your loan officer, (Adrienne Kearney) will help you correct this problem as well.
 
Q: What is an Annual Percentage Rate (APR)?
A: The annual percentage rate (APR) is an interest rate that is different from the note rate. It is commonly used to compare loan programs from different lenders. The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. Typically the APR is found next to the rate.
Example:
30-year fixed 8 percent w/1 point = 8.107% APR

The APR does not affect your monthly payments. Your monthly payments are a function of the interest rate and the length of the loan. The APR is designed to measure the "true cost of a loan."  It prevents lenders from advertising a low rate and hiding fees.
The following fees ARE generally included in the APR:
• Points - both discount points and origination points
• Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30.
• Loan-processing fee
• Underwriting fee
• Document-preparation fee
• Private mortgage-insurance
The following fees are often included in the APR:
• Loan-application fee
• Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)
The following fees are normally NOT included in the APR:
• Title or abstract fee
• Escrow fee
• Attorney fee
• Notary fee
• Document preparation (charged by the closing agent)
• Home-inspection fees
• Recording fee
• Transfer taxes
• Credit report
• Appraisal fee

Silverton Mortgage Specialist, Inc.

1029 Monroe Drive NE

Atlanta, Ga. 30306

(404) 815-0291 (office)

(404) 815-0637 (fax)

(404) 748-4169 (mobile)

adrienne@silvertonmortgage.com (email)