Your Financial Health

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2010-09-23T18:06:00.001-07:00

Credit rating by points Destroyers, The Top 15!

2010-09-12T17:01:00.000-07:00

The number one credit rating by points destroyer is paying everyone’s bills late. Because everyone’s credit rating by points is based on about 35 percent of everyone’s payment history, you do not want to be late with the payments.

Number two of everyone’s credit rating by points destroyer is to completely ignore everyone’s credit card bills. This can be worse than paying late. Every month that you do not pay your bill, you become one month closer to having the account charged off.

Which leads to the number three credit rating by points destroyer, charge off. When creditors think you aren’t going to pay your credit card bills at all, they charge the account off. This account status is one of the worst things for everyone’s credit rating by points.

When an account is charged off, it is then usually sent to collections. This is the fourth credit rating by points destroyer. Creditors often use third party debt collectors to try to collect payment from you. Creditors can send your account to collections before or after charging the debt off. A collection status shows that the creditor gave up trying to get payment from you and hired someone else to collect.

The fifth credit rating by points destroyer is defaulting on a loan. Loan defaults are similar to credit card charge offs. A default shows that you have not fulfilled your end of the loan contract.

The sixth credit rating by points destroyer is filing bankruptcy. A bankruptcy will devastate everyone’s credit rating by points. It is a good idea to seek other alternatives.

The seventh credit rating by points destroyer is having everyone’s home foreclosed on. When you get behind on your mortgage payments, it will lead everyone’s lender to foreclose on everyone’s home. The late payments hurt everyone’s credit rating by points and make it harder to get approved for a future mortgage loan.

The eight credit rating by points destroyer is getting a judgment on you. A judgment shows you not only avoided your bills, but the court had to get involved to make you pay the debt. While they both hurt everyone’s credit rating by points, a paid judgment is better than an unpaid one.

High credit card balances is the ninth credit rating by points destroyer. The second most important part of everyone’s credit rating by points is the level of debt you have. Having high credit card balances increases everyone’s credit utilization and decreases everyone’s credit rating by points.

The tenth credit rating by points destroyer is having maxed out credit cards. Maxed out and over the limit card balances will make everyone’s credit utilization 100 percent. This is least ideal for everyone’s credit rating by points.

The eleventh credit rating by points destroyer is closing your credit cards that still have balances. By closing your credit card that still has a balance, your credit limit drops to zero while your balance remains the same. This makes it look like you have maxed out your credit card causing your score to drop.

Closing old credit cards is the twelfth credit rating by points destroyer. Because this is 15 percent of everyone’s credit rating by points, the length of everyone’s credit history plays a big part. Longer credit histories are better. Closing old credit cards, especially everyone’s oldest card, makes everyone’s credit history seem shorter than it really is.

The thirteenth credit rating by points destroyer is closing card with available credit. If you have several credit cards some with balances and some without, closing those credit cards with balances increase everyone’s credit utilization.
The fourteenth credit rating by points destroyer is applying for several credit cards or loans. Credit inquiries account for 10 percent of our credit rating by points so making several credit or loan applications within a short period of time will cause everyone’s credit rating by points to drop. Keep applications to a minimum.

The fifteenth final credit rating by points destroyer is having only credit card or only loans on everyone’s credit file. Because mix of credit is 10 percent or everyone’s credit rating by points, if you only have one type of credit account, either loans or credit cards, everyone’s credit rating by points could be affected. This factor mostly comes into play when you do not have much other credit information in everyone’s credit history.

Here are a few links to help you find your credit score and your credit reports for you and/or your family and spouse:

Get your Credit Score from CreditReport.com - fast, free and easy!

Get your Equifax 3-in-1 Credit Report & FICO Score Now!

Free Credit Score

Please feel free to try these FREE links out and make sure your credit is as good as possible. Finally, if you have problems with your credit score and report and you need help, we suggest trying out this link. They are a reputable Law Firm.

Let a Law Firm Remove your Negative Items from your Credit Report!

Credit card debt and divorce

2010-04-22T03:40:00.000-07:00

Facing Card Credit Debt Divorce?

If you're recently divorced or separated, or are thinking about it, your next moves have to be smart. Divorce and trustworthiness account bills can wipe you out. These suggestions can help you put together the correct trustworthiness type decisions for your one of a kind state of affairs. Especially if you are facing issues such as trustworthiness account bills and divorce.

The rules have changed.

It's a tougher encounter now. With divorce and break-up come unique experiences and responsibilities across the issue. Suddenly words delight in "Divorce trustworthiness account bills" "trustworthiness account bills and divorce" "offspring aid payments" "Divorce trustworthiness account deception and "100% responsible for bills" come into the picture. If you ignore your increased financial obligations or forsake to separate your accounts, then it may be difficult to start unique accounts and acquire unique loans in your personage. But there are numerous moves you can put together to safeguard and restore the satisfactory trustworthiness you previously took years to build.

Your decisions now will determine your starting situation.

Once you start out to obtain the notion of what the complete playing field looks light, feel free to proceed to the Debtkiller.com website and check out how to obtain your trustworthiness or credit reports for FREE.

Don't allow Divorce and trustworthiness account bills destroy your satisfactory personage. Safeguard your satisfactory trustworthiness by remembering that you are responsible for joint accounts. Your divorce order does not abate you from joint debts you incurred while married. You are responsible for joint accounts, from trustworthiness cards and automobile loans to house mortgages. Even when a divorce magistrate orders your ex-spouse to repay you're just as legally responsible for making certain it is paid because you promised, both as a couple and as individuals, to do so.

The trustworthiness grantor or issuer, mortgage business or other trustworthiness lending company also has a lawful responsibility to correct a statement or adversarial data to a trustworthiness agency (credit bureau) if your ex-spouse pays tardy on a joint credit account. If your ex-spouse doesn't repay at all, you'll in all likelihood need to repay or the grantor can take lawful motion against you.

Close or separate joint accounts.

If you can speak to your ex-spouse, you can shield an assortment of grief. Analyze all your debts and determine who should be responsible for each. Contact your creditors and ask them how to transfer your joint accounts to the individual who is solely responsible for payments. Nevertheless, you just might need lawful liability to repay existing balances unless the creditor agrees to liberate you from the bills.

Take stock of your properties

You may need to refinance your house to obtain get your personage out the mortgage. Or you might want to dispose of your house and split up the proceeds with your spouse.

Keep paying all bills

Until you can separate your accounts, neither of you can afford to skip a go-a-round paying bills. During divorce negotiations, mail in at least the minimum payment payable on all joint bills. If you skip even one payment and it will stay on your trustworthiness profile for up to seven years, making it difficult to acquire unique trustworthiness in your own personage. Be careful of well-meaning friends and relatives who may suggest you to ignore making payments or to jump up debts. Just follow by the rules: put together all payments with at least the minimum payable.

Establish trustworthiness independently. Unique trustworthiness sets you up for future moves. This is a important method to decision forwards in your unique independent directions. Get under way a method for mall and build up.

Obtain trustworthiness account that has a little trustworthiness limit, possibly from a nearby department store of financial establishment. Then without exceptions repay your bills on time so your trustworthiness record will be outstanding. After six months, register for another account and continue paying bills regularly. Don't jump your bills up beyond what you can pay or repay. It's a winning procedure that's easy to manage.

Ask a family member or companion to cosign

Maybe a family member or companion with an established trustworthiness record can cosign your credit or trustworthiness application-provided you pay back that cosigned bills on time. Remember, any transaction also will display up on the cosigners trustworthiness profile. After several months attempt again to obtain trustworthiness on your own.

Considering applying for a secured trustworthiness account

You have to start and maintain a savings credit account as guarantee for your limit of trustworthiness Your trustworthiness limit is a percentage of your set aside. Be careful of the auxiliary fees you may end up having to repay for secured trustworthiness. Rebuild reliable trustworthiness records. Start out anew with agreeable knowledge.

You can choose up your pieces and get under way. When you encounter a new reliable trustworthiness statement remember that you must repay our bills on time. After all, your trustworthiness profile is without exception evolving.

Your recent account saying standard is serious.

Your behavior (during the next 18-24 months) is most significant in deciding whether you're an acceptable trustworthiness risk. Even one tardy payment can act upon your capacity to a new mortgage. And remember to use aid if it's at your deposal. it can be at one's disposal if you're having trouble paying bills.

Bankruptcy is a final hope. You may forfeit a share of ground.

Bankruptcy could be the final decision to put together if you find your finances are just over your head. Or it could spell checkmate on your financial future if you aren't careful.

It's not an easy method out.

Filing for bankruptcy is no assurance that it will be granted because a court judgment have to be made. Even if all you do is file your bankruptcy papers with the court, it gets reported on your trustworthiness profile.

Not all debts are included in bankruptcy.

Things delight in alimony, offspring aid, school loans and taxes secured by liens just have to be paid regularly. Bankruptcy remains on your trustworthiness profile up to 10 years. While a statement of bankruptcy removes numerous debts, any mention to filing, or release just appears on your trustworthiness profile up to 10 years in this order: for Chapter 7, up to 10 years and for Chapter 13 up to 7 years. During this time, you'll find it more awkward if not hopeless to obtain a mortgage, individual credit or a trustworthiness account.

Considering mediation, Remember, you're playing for keeps.

Mediation can put together the encounter much fairer by assisting you and your ex-spouse work out a sensible and fair divorce covenant. If you'd delight in aid discovering a arbitrator, call the American Arbitration Association. To locate an attorney, make contact with your state government or nearby Bar Association.

You CAN win with the correct trustworthiness type decisions.

No matter where you stand on the divorce issue, you will need to take established actions that can be genuine challenges, especially from a trustworthiness point of view . But when you understand the rules and design your moves (trustworthiness or other) skillfully, future moves you put together in unique directions will be smoother.

Credit Scoring, What is it?

2009-09-02T13:45:00.000-07:00

How do creditors decide whether to grant you credit or not? Creditors have been using the credit scoring system for credit report scoring for years to determine if you are a good person for credit cards and auto loans. More recently however, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans. So, what is credit score? Who does the determining credit score? How do I get the best credit score? Let's find out.

WHAT IS CREDIT SCORING?

Credit scoring is a system creditors us to help determine whether to give you credit. Credit scoring systems give information about you and your past credit experiences. Credit scoring will tell how well you pay your bills such as home mortgage, car payment, and utilities. This credit scoring is recorded for all creditors to see. This is known as your paying history. Credit scoring systems take into account the number of accounts you have as well as the type of account that it is. Credit scoring systems list whether you have been late with your payments or if the account has been turned over for collections. Credit scoring systems list your current balances as well as your maximum charge amount. All of this information is known as a credit report. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict how credit worthy you are, how likely it is that you will repay a loan and make the payments on time.

A credit report scoring takes your credit report and uses this information for credit scoring. It is a very important part of the credit scoring system. This is why it is very important to make sure that this report is accurate before you submit a credit application. A bad credit score will get you denied on credit. To get copies of your credit score and your credit report, you can contact the three major credit reporting agencies. They are:

Equifax- 1-800-685-1111

Experian- 1-888-EXPERIAN (397-3742)

Trans Union- 1-800-916-8800

These agencies may charge you up to $9 for your credit report. If you request your credit score fico, they can charge additional amounts. Each creditor has it's own separate fees. You can also obtain all three credit bureaus online and receive online credit score.

HOW IS A CREDIT SCORING MODEL DEVELOPED?

To develop a credit scoring model, a creditor selects a random sample of its customers or a sample of similar customers if their sample is not large enough and analyzes the information statistically to identify characteristics that relate to creditworthiness. Then each of these factors are assigned a weight based on how strong a predictor it is of who would be a good credit risk. Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.

Under the Equal Credit Opportunity Act, a credit scoring system may not use certain characteristics-like race, sex, marital status, national origin, or religion-as factors. However, creditors are allowed to use age in properly designed credit scoring systems. But any credit scoring system that includes age must give equal treatment to elderly applicants.

WHY IS CREDIT SCORING USED?

Credit scoring systems use credit scoring based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. Credit scoring keeps all applicants objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals.

WHAT CAN I DO TO IMPROVE MY SCORE?

Credit scoring system models are complex and often vary among creditors and for different types of credit. If one factor changes, your credit score may change-but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your credit score under the particular model used to evaluate your credit application. To obtain the best credit score, this will determine how the next few questions are answered.

Nevertheless, credit scoring system models generally evaluate the following types of information in your credit report:

· Have you paid your bills on time? Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on your credit report.

· What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, this is likely to have a negative effect on your score.

· How long is your credit history? Generally, models consider the length of your credit track record. An insufficient credit history may have an effect on your score, but that can be offset by other factors, such as timely payments and low balances.

· Have you applied for new credit recently? Many credit scoring system models consider whether you have applied for credit recently by looking at "inquiries" on your credit report when you apply for credit. If you have applied for too many new accounts recently, this may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make "prescreened" credit offers are not counted.

· How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some credit scoring systems models, loans from finance companies may negatively affect your credit score.

Credit scoring systems models may be based on more than just information in your credit report. For example, the credit scoring system model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home.

To get the best credit score or improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It's likely to take some time to improve your score significantly.

HOW RELIABLE IS THE CREDIT SCORING SYSTEM?

Credit scoring systems enable creditors to evaluate millions of applicants consistently and impartially on many different characteristics. But to be statistically valid, credit scoring systems must be based on a big enough sample. Remember that these credit scoring systems generally vary from creditor to creditor.

Although you may think such a credit scoring system is arbitrary or impersonal, it can help make decisions faster, more accurately, and more impartially than individuals when it is properly designed. Many creditors design their credit scoring systems so that in marginal cases, applicants whose scores are not high enough to pass easily or are low enough to fail absolutely are referred to a credit manager who decides whether the company or lender will extend credit. This may allow for discussion and negotiation between the credit manager and the consumer.

WHAT HAPPENS IF I AM DENIED CREDIT OR DON'T GET THE TERMS I WANT?

If you are denied credit because you were given a bad credit score, the Equal Credit Opportunity Act requires that the creditor give you a notice that tells you the specific reasons your application was rejected or the fact that you have the right to learn the reasons if you ask within 60 days. Indefinite and vague reasons for denial are illegal, so ask the creditor to be specific. Acceptable reasons include: "Your income was low" or "You haven't been employed long enough." Unacceptable reasons include: "You didn't meet our minimum standards" or "You didn't receive enough points on our credit scoring system."

If a creditor says you were denied credit because you are too near your credit limits on your charge cards or you have too many credit card accounts, you may want to reapply after paying down your balances of closing some accounts. Credit scoring systems consider updated information and change over time. This will greatly improve a bad credit score.

Sometimes you can be denied credit because of information from a credit report. If so, the Fair Credit Reporting Act requires the creditor to give you the name, address, and phone number of the credit reporting agency that supplied the information. You should contact that agency to find out what your report said. This information is free if you request it within 60 days of being turned down for credit. The credit reporting agency can tell you what's in your report, but only the creditor can tell you why your application was denied.

If you've been denied credit, or didn't get the rate or credit terms you want, ask the creditor if a credit scoring system was used. If so, ask what characteristics or factors were used in that system, and the best ways to improve your application. If you get credit, ask the creditor whether you are getting the best rate and terms available and, if not, why. If you are not offered the best rate available because of inaccuracies in your credit report, be sure to dispute the inaccurate information in your credit report.

Credit scoring systems are designed to help creditors determine if you are a risky client or a good client. A bad credit score will tell the creditor immediately whether to say yea or nay. You can go to the Debtkiller.com link below and learn how to get all 3 of your credit reports for FREE! Then see what your credit score fico is and whether you have the best credit score or bad credit score.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com.

Facing divorce or separation?

2009-09-02T13:33:00.001-07:00

If you're recently divorced or separated-or are thinking about it-your next moves have to be smart. These suggestions can help you make the right credit-related decisions for your unique situation.

The rules have changed. It's a tougher game now.

With divorce and separation come new experiences and responsibilities across the board. Suddenly words like "child support payments" and "100% liable for bills" enter the picture. If you ignore your increased financial obligations or fail to separate your accounts, then it may be hard to open new accounts and obtain new loans in your name. But there are many moves you can make to protect and restore the good credit you took years to build.

Get your credit report. It will decide your starting position.

Before you begin, get an idea of what the entire playing field looks like. Call 1-888-EXPERIAN (1-888-397-3742) for information on how to get a copy of your Experian credit profile.

Protect your good credit. You're responsible for joint accounts.

Your divorce decree does not relieve you from joint debts you incurred while married. You are responsible for joint accounts, from credit cards and car loans to home mortgages. Even when a divorce judge orders your ex-spouse to pay a certain bill, you're still legally responsible for making sure it is paid because you promised-both as a couple and as individuals-to do so.

The credit grantor (a bank, credit card issuer, mortgage company or other credit-lending business) also has a legal right to report negative information to a credit bureau if your ex-spouse pays late on a joint account. If your ex-spouse doesn't pay at all, you'll probably have to pay-or the grantor can take legal action against you.

Close or separate joint accounts.

If you can talk to your ex-spouse, you can save a lot of grief. Analyze all your debts and decide who should be responsible for each. Call your creditors and ask them how to transfer your joint accounts to the person who is solely responsible for payments. However, you still might have legal responsibility to pay existing balances unless the creditor agrees to release you from the debt.

Take stock of your properties.

You may have to refinance your home to get one name off the mortgage. Or you might need to sell your home and divide the proceeds.

Keep paying all bills.

Until you can separate your accounts, neither of you can afford to miss a turn paying bills. During divorce negotiations, send in at least the minimum payment due on all joint bills. Miss even one payment and it stays on your credit profile for up to seven years, making it hard to obtain new credit in your own name. Beware of well-meaning friends and relatives who may tell you to ignore making payments or to run up debts. Just play by the rules: make all payments with at least the minimum due.

Establish credit independently. New credit sets you up for future moves.

This is a major way to move ahead in your new independent direction.

Start small and build up.

Get a credit card that has a small credit limit, perhaps from a local department store of financial institution. Then always pay your bills on time so your credit history will be excellent. After six months, apply for another card and continue paying bills consistently. Don't run your debt up beyond what you can afford to pay. It's a winning strategy that's easy to master.

Ask a family member or friend to cosign.

Perhaps a relative or friend with an established credit history can cosign your loan or credit application-provided you repay that cosigned debt on time. Remember, any transaction also will show up on the cosigner's credit profile. After a few months, try again to get credit on your own.

Consider applying for a secured credit card.

You must open and maintain a savings account as security for your line of credit. Your credit line is a percentage of your deposit. Beware of the extra fees you may have to pay for secured credit.

Rebuild positive credit history. Begin anew with good information.

You can pick up your pieces and start the game fresh with a positive credit report-if you pay your bills on time. After all, your credit profile is always evolving.

Your recent bill-paying pattern is critical.

Your behavior (during the next 18-24 months) is most important in deciding whether you're a good credit risk. Even one late payment can affect your ability to get a mortgage.

Help is available if you're having difficulty paying bills.

The nonprofit National Foundation for Credit Counseling (NFCC), 800-388-2227, can help you establish a budget and repay creditors.

Bankruptcy is a last resort. You may lose a lot of ground.

Bankruptcy could be the last move to make if you get in over your head. Or it could spell checkmate on your financial future if you aren't careful.

It's not an easy way out.

Filing for bankruptcy is no guarantee that it will be granted because a court judgment must be made. Even if all you do is file your bankruptcy papers with the court, it gets reported on your credit profile.

Not all debts are included in bankruptcy.

Things like alimony, child support, student loans and taxes secured by liens still must be paid consistently.

Bankruptcy remains on your credit profile up to 10 years.

While a declaration of bankruptcy removes many debts, any reference to filing, dismissal or discharge still appears on your credit profile up to 10 years for Chapter 7, up to 7 years for Chapter 13. During this time, you'll find it more difficult if not impossible to get a new mortgage, personal loan or a credit card.

Consider mediation. Remember, you're playing for keeps.

Mediation can make the game much fairer by helping you and your ex-spouse work out a reasonable and equitable divorce agreement. If you'd like help finding a mediator, contact the American Arbitration Association. To locate an attorney, check with your state or local Bar Association.

You CAN win with the right credit-related decisions.

No matter where you land on the divorce board, you will have to take certain actions that can be real challenges, particularly from a credit standpoint. But when you know the rules and plan your moves (credit or other) skillfully, future moves you make in new directions will be smoother.

For further information, please refer to the resources listed here. By protecting and establishing your credit, you can score more points toward a positive financial future.

Resources

Experian

Consumer Education Department

P.O. Box 1239

Allen, TX 75013

800-947-7900/www.experian.com

(1-888-397-3742 to request a credit report)

Call For Action, Inc.

Consumer Hotline

800-647-1756

Federal Trade Commission

Brochure on divorce and credit

Brochure on women and credit

202-326-2222/www.ftc.gov

Please note:

The information contained in these pages regarding credit-related decisions is provided by Experian to consumers as suggestions but not specific recommendations. This information may not be applicable to the specific facts and circumstances of your situation and is not intended as a substitute for professional advice.

About the Author...

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com.

Federal Agencies

2009-08-28T08:57:00.000-07:00

Part 9

This is part nine of a nine part article on the understanding of Mortgage Lock-Ins.

Federal Agencies

Mortgage Companies

Division of Credit Practices

Bureau of Consumer Protection

Federal Trade Commission

601 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

(202) 326-3224

Federally Insured Savings and Loan Institutions and Federally Chartered Savings Banks

Office of Thrift Supervision

1700 G Street, N.W.

Washington, D.C. 20552

(202) 906-6000

State Member Banks of the Federal Reserve System

Division of Consumer and Community Affairs

Board of Governors of the Federal Reserve System

20^th and C Streets, N.W.

Washington, D.C. 20551

(202) 452-3946

National Banks

Compliance Management Division

Office of the Comptroller of the Currency

250 E Street, S.W.

Washington, D.C. 20219

(202) 874-4810

Federally Insured Non-Member State-Chartered Banks and Savings Banks

Office of Consumer Programs

Federal Deposit Insurance Corporation

550 Seventeenth Street, N.W.

Washington, D.C. 20429

(800) 424-5488 (202) 898-3536

Federal Credit Unions

National Credit Union Administration

1776 G Street, N.W.

Washington, D.C. 20456 (202) 357-1065

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://Jannajones.blogspot.com

Things you should Know about Lock-Ins

2009-08-28T08:56:00.001-07:00

Part 8

This is part eight of a nine part article on the understanding of Mortgage Lock-Ins.

Things you should Know about Lock-Ins

You need to know what to look for so you can make a good decision on what it is that you want to do. You need to know if a Lock-In is best for you. This can keep your loan process moving and can lessen the chance that your Lock-In will expire. But if it does expire and you feel the lender is at fault or someone else involved in the loan process, try to reach a mutual satisfactory agreement with the lender. If this does not work, send a letter to your state or federal regulatory agency.

Some lenders offer Lock-In terms which are impossible to fulfill and therefore fail to process your loan diligently or cause the Lock-In to expire. You may have contractual rights under your Lock-In, consult with an attorney. Be aware that any complaint you have may not be resolves as quickly as may be necessary for a home purchase. There are state and federal agencies available for your protection.

Listed below are some of the State and Federal agencies designed to help you should you feel that you have been defrauded by a lender due to a Lock-In. The information contained in this brochure is intended to help you ask the right questions when shopping for a loan. It is not a replacement for professional advice. Talk with mortgage lenders, real estate agents, attorneys, and other advisors, about lending practices, mortgage instruments, and your own interests before you commit to any specific loan. Ask your lender or real estate agent for the following related pamphlets:

A Consumer's Guide to Mortgage Refinancings
A Consumer's Guide to Mortgage Settlement Costs
Consumer Handbook on Adjustable Rate Mortgages

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot..com

What are some questions to ask your lender about Lock-Ins?

2009-08-28T08:54:00.001-07:00

Part 7

This is part seven of a nine part article on the understanding of Mortgage Lock-Ins.

What are some questions to ask your lender about Lock-Ins?

Does your lender even offer a Lock-In of the interest rate and points?

When will the lender allow you to Lock-In the interest rate and points? When you apply for the loan or when it is approved?

Will the Lock-In be in writing? If not, can you ask for it in writing?

Does your lender charge a fee to Lock-In your interest rate? Will the fee increase if you have a longer period? How much is the increase?

If you have Locked-In a rate and the lender's rate drops, can you Lock-In at the lower rate? Will there be an additional fee for doing this?

Can you float your interest rate and points now and lock them in later?

How long will it take you to process your loan?

What is their average time for processing loans?

Has the lender's loan volume increased? Heavy volume may increase the lender's average processing time.

What rate will be charged if the Lock-In expires before settlement? Will it be the same rate in effect when the Lock-In expires?

If you do not settle with-in the Lock-In period, will the lender refund some or all of your application or Lock-In fees if you decide to cancel their application?

If the Lock-In expires, and you want another Lock-In at the rate in effect at the time of the expiration, will the lender charge additional fees for second Lock-In?

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

What Happens If the Lock-In Period Expires?

2009-08-28T08:53:00.001-07:00

Part 6

This is part six of a nine part article on the understanding of Mortgage Lock-Ins.

What Happens If the Lock-In Period Expires?

If you do not settle within the Lock-In period, you might lose interest rate and the number of points you had Locked-In. This happens when delays occur in processing in which you are the cause. It could also happen if others are involved in the settlement process, or it could be the cause of the lender. Should your Lock-in expire, most lenders will offer the loan based on the prevailing interest rate and points. If the cause of the delay was due to the market conditions, the lender may charge you more for the loan. Lenders also may not be able to continue to offer you the Lock-In rate due to they can no longer sell the loan to investors at the Lock-in rate. Loan approval delays can cause Lock-In period to expire. Sometimes lenders have to wait on documents by you or from others such as employers, appraisers, termite inspectors, builders, and individuals selling the home. Sometimes it is the lenders fault for the delay if the loan demand is heavy. Interest rates falling suddenly also could cause delay. When lenders lock in loan terms for you, they often have an agreement with investors to buy the loan based on the Lock-In terms. This agreement may expire around the same time that the Lock-In rate expires and the lender may be unable to afford to offer the same terms if the market rates have increased. Lenders who intend to keep the loans they make have more flexibility in these cases where settlement is not reached before the Lock-in expires.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

How Long are Lock-Ins Valid?

2009-08-28T08:45:00.001-07:00

Part 5

This is part five of a nine part article on the understanding of Mortgage Lock-Ins.

How Long are Lock-Ins Valid?

A lender will usually promise to hold an interest rate and number of points for a certain number of days. To get the specified terms, usually requires that you settle on the loan within that period. Lock-Ins of 30 to 60 days are very common. Some may only offer it for 7 days, after your loan is approved. Some may offer it for 120 days. Usually the fee may be higher the longer the time period is for the Lock-In. The Lock-In period should be long enough for settlement and other contingencies that are imposed by the lender before the Lock-In expires. You should find out how long it takes to process loans in your area. Ask the lender to give you an estimated time in writing. Ask them to include delays that may arise in providing materials about your financial condition and if you are building a new home, possible construction delays. Ask for a Lock-In with as few contingencies as possible. This will help you in deciding the length of Lock-In time you may need.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

How is my Interest Rate and Points Determined?

2009-08-28T08:44:00.001-07:00

Part 4

This is part four of a nine part article on the understanding of Mortgage Lock-Ins.

How is my Interest Rate and Points Determined?

Locked-In Interest Rate and Locked-In Points are done by the lender. They allow you to Lock-In both the points and interest rate that was quoted to you. This is also considered a true Lock-In because your mortgage terms should not increase above the interest rate and points that you have agreed upon, even if the market conditions change.

You could also be given a Locked-In Interest Rate-Floating Points. This is when the lender allows you to Lock-In the interest rate while permitting the points to rise and fall with changes in the market, also known as floating. Points rise and fall as interest rates rise and fall. So even if you float your points, the lender may allow you to Lock-In points at some time before settlement at whatever level is then current. If you float your points and the market interest rate increase by the time of settlement, the lender can charge a greater number of points for a loan at the rate you did the Lock-In. Beware, you can lose money on this as you will have higher up-front costs.

Example: Let's say you Lock-In a 10% interest rate but not the 3 points that went with that rate. A month later, the market interest rate is the same but the points the lender charges for that rate have dropped to 2 ½. With the lender's agreement, you can Lock-In the lower 2 ½ points.

A third option is Floating Interest Rate-Floating Points. This allows the lender to let you Lock-In the interest rate and the points at some time after application but before settlement. If you rates will remain level, or fluctuate up or down, you may want to wait on locking in a particular rate and points. If rates go up, you should expect to be charged the higher rate.

There may be more options than these. Check with your lender and find out if others are available.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

Is a Fee charged for a Lock-In?

2009-08-28T08:42:00.001-07:00

Part 3

This is part three of a nine part article on the understanding of Mortgage Lock-Ins.

Is a Fee charged for a Lock-In?

Some lenders do charge a fee for doing a Lock-In. They can charge an up-front fee and may not allow it to be refundable should you change your mind on the mortgage application and decide not to do the mortgage. Some lenders do not refund this fee also if you are denied credit or if you do not close on the loan. Some lenders charge the fee at the time of settlement. This fee can be a flat fee, a percentage of the mortgage amount or a fraction of a percentage point added to the rate you Lock-In. The amount of the fee and how it is charged is up to each lender. It could also depend on the length of the Lock-In period.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

Do I need the Lock-In to be in Writing?

2009-08-28T08:39:00.001-07:00

Part 2

This is part two of a nine part article on the understanding of Mortgage Lock-Ins.

Do I need the Lock-In to be in Writing?

Most lenders have preprinted forms that spell out the exact terms of the Lock-In agreement. Some lenders may only give you an oral Lock-In which is promised to you on the telephone or at the time you are filling out the application. Oral agreements are usually difficult to prove should a dispute arise. So it is always best to get the Lock-In in writing.

When you get a Lock-In form, take the time to read it. It just may contain some crucial information that you do not understand or it is written in fine print. For instance, a Lock-In could become void through some unrelated action such as a change in the maximum rate for Veterans Administration guaranteed loans. Ask for a blank Lock-In form and read it carefully before you apply for the loan. If you can, take it to a lawyer to read. Make sure that you completely understand what the Lock-In form is saying.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://jannajones.blogspot.com

Mortgage Lock-Ins Part 1

2009-08-27T16:19:00.001-07:00

When you are ready to buy a home, the first thing that comes to your mind is the word mortgage. You want to look at different lenders for the best interest rate, the lowest points and other up front charges. Now that you have chosen a lender and are about to settle with them, have the terms and conditions that you wanted been applied? For instance, did you get the rate that you wanted? Have your costs gone up? This is when you should be aware of "Lock-In". You want to lock in on rates and points to make sure that what you wanted is what you actually get. The different parts to this article, parts 1-10 will explain the basics of mortgage Lock-Ins. The entire article can be found at www.debtkiller.com. Look for the article titled Mortgage Lock-Ins.

Part 1

This is part one of a nine part article on the understanding of Mortgage Lock-Ins.

Lock-Ins

Usually the terms that are quoted to you when you were looking for a lender only represent the terms available to borrowers settling their loan agreement at the time of the quote. Quoted terms may not necessarily be available to you when you settle weeks or months later. Do not rely on terms quoted to you when you are looking for a loan unless the lender is willing to offer you a lock-in.

What is a Lock-In?

This is known as a rate-lock or rate commitment. This is a lenders promise to hold a certain interest rate and points for you for a specified period of time while your loan application is being processed. What are points? Points are usually additional charges that a lender charges that are prepaid by you the consumer at settlement but can sometimes be financed by adding them to the mortgage amount. One point equals one percent of the loan amount. Most lenders allow you to lock in the interest rate and number of points that you will be charged when you file your application, or during the loan processing time, or when the loan is actually approved, or even later.

When you are getting a mortgage, the loan processing time takes time. It is good to have a Lock-In because of the time it does take to do all the paperwork. It will take time to prepare the note, document the note and evaluate your loan application. It is during this time that the cost of the mortgage usually can change. However, with a Lock-In, your interest rate and points will not change. The Lock-In should protect you of any increases and allow you to see if you can afford the mortgage. You must also be aware that a Lock-In could also prevent you from price decreases, should they occur. Only your lender will be able to undo the Lock-In, should prices decrease, and give you the lower rate that becomes available during your application period.

Also be aware that a Lock-In is not the same as a loan commitment. However, some loan commitments may contain a Lock-In. What is a loan commitment? A loan commitment is when a lender promises to make you a loan in a specific amount at some future time. This occurs after you have been approved by the lender from a loan application in which you submitted. The loan commitment will state the terms of the loan and that you have been approved. It will state how long the commitment is valid and it will state the lender's conditions for making the loan. Some conditions might be a receipt of a satisfactory title insurance policy protecting the lender.

This and many other helpful consumer articles may be found at www.debtkiller.com or by reviewing Janna's many regular personal financial updates at her blog, http://Jannajones.blogspot.com