Good credit is absolutely vital in our country. Many mistakes are made and well documented in handling credit yet no one would argue how important it is to maintain good credit habits. The following is a few basics that will help you improve your scores.

Step 1: Go directly to the source to see what exactly your credit is. You will want to pull all three credit reports from www.equifax.com, www.transunion.com, and www.experian.com. These are the bureaus that your creditors report to and you will need to investigate all three to determine what incorrect and derogatory items you have.

Order your reports AND scores directly from the bureaus. Don?t waste your time dealing with one of those companies offering you a free report. What you will find is that the reports are NOT free and what they are after is setting you up on a monthly pay plan to monitor your credit.

When you receive your three reports take the time to review each one individually. Each credit repository reports your score based on a different matrix and some creditors do not report to all three bureas. Make note of any item that is reflecting as late or is listed as a public record.

Step 2: Dispute. When you begin the dispute process always write your dispute letters in your own words. Do not use the forms provided by the bureaus. Disputes are handled by real people and should be treated as such. Employees at credit bureaus are trained to sniff out credit repair companies and false disputes so you are always better off putting the dispute into your own letter in your own words.

Challenge all the inaccurate information on your report. It can make a huge difference in credit score very quickly. If there are derogatories on you report that are in fact yours then it is best to begin by contacting the creditor directly. Creditors will often remove derogatory information at the request of a current client. Sometimes putting pressure on them to act in your behalf by threatening to close the account if you are not satisfied will produce quick results.

Step 3: Wait or Pay. Many people are aware that after 7 years most derogatory credit comes off. What many people do not know is that investigating an old item can reactivate the derogatory and cause an immediate drop in credit score. In some cases, the closck may even be “reset” for another 7 years. Be cautious in investigating old items. Make sure that you have proof that the items are either paid or incorrect.

You can see an immediate benefit to your score by adjusting the balances of your credit cards. A good rule of thumb is to never allow your cards to go over 50% of available balance and preferable 30%. Having one card at zero and another maxed out will cause a lower score than having each card at 30% of max. Transfer part of the balance onto that card with zero and balance your accounts.

Step 4: Don’t open new credit or close old credit accounts. Closing out an old card, even one that you’ve not used in years can lower your score. One of the factors in credit scoring is length of time that your credit has been established. So older accounts can carry alot of weight in scoring. Obviously, new accounts will drive down the average that you’ve had credit and effect the score.

By applying these basic steps you can fix or maintain your credit. Though it is not an easy task it is worth the effort. There are some cases where using a reputable credit repair agency is helpful but first apply these simple steps that I’ve outlined here and you’ll be on your way to great credit and financial security.

The mortgage industry is continuing to experience volatility with credit tightening, lender problems, and a decrease in available loan programs. During this time, mortgage brokers will be seeking new wholesale lenders who can provide competitive rates, good service, and loans that can meet borrowers’ scenarios. If you find yourself in this situation, the following common-sense steps will help make the approval process smoother.

Submit all documents in support of your application at the beginning of the process, just as you would submit a full loan file. This prevents the need for additional phone calls or speculation.

If you haven’t been a broker for long, then include in your application a detailed resume for yourself and other important employees. Ask the lender how many years of industry experience are required and show that you meet that requirement.

If the lender asks for references from account executives you have worked with, make sure the contact information for the AE’s is still good. If you are unable to contact the AE, then the lender won’t be able to either.

Make sure you provide all the requested signatures

Double check that all required information is provided.

Verify with the lender what type of financial statements are necessary, if any. Sole proprietors may be asked to submit two years of tax returns or company financials.

If there is a checklist, use it as your guide and double check before sending off the approval package.

Do not handwrite the answers to questions on the application. Use a typewriter or printer instead. This will reduce errors.

This can be a scary and tense time, but mortgage brokers are still needed and good wholesale lenders still exist. You can simplify becoming approved with them by following the steps above. By acting now, you’ll have more options available to you, and when the market stabilizes, you’ll already be associated with some of the best lenders in the marketplace.

Many people today would love to purchase a Home in this incredible Buyers Market but they think they need tens of thousands of dollars for a down payment. This is simply not true. A littel known government program allows any buyer to own their dream home with absolutely Zero Down Payment.

Here is a step by step process to BUY a home with ZERO down payment and ZERO out of pocket expenses using an FHA approved mortgage and time tested principles.

Find an FHA/VA approved Mortgage Planner that specializes in working with a DPA. A DPA is a down payment assistance program. One of the more popular DPA’s is the Nehemiah program. Nehemiah has assisted in funding over 275,000 real estate transactions since 1998 and is completely HUD approved and RESPA compliant.

Now you will need to get pre-qualifed for a DPA with a certified DPA specialist. Most people are concerned about credit with a no money down program but credit does not need to be perfect. Credit scores can be as low as 550 to qualify. FHA is primarily concerned with the borrowers ability to repay. So they will be focused on the income verification and will look at your last 2 years of income verification. Any owner occupant is eligible for this program.

Now it’s time to start looking for your home. FHA limits have increased recently so you may be surprised how high you can go. In some areas (Los Angeles) FHA limits go up to $729,000. In most other areas the limit is $423,000. With values down all over the country this is an ideal time to buy.

Now it’s time to negotiate with the seller. The seller will be contributing the entire down payment to you through Nehemiah (or other DPA) and give you a credit for closing costs as well. This will require their cooperation. You will be asking for a contribution of between 7-12% so your offer should be closer to the listing price of the house. Due to market conditions sellers are more flexible than ever. They are primarily concerned with how much they are going to net (or walk away with) so negotiate with that in mind.

Make application for a mortgage with a DPA specialist. Make sure that you choose someone that has experience working with the FHA and especially a DPA. This is not the time to risk working with an inexperienced “loan officer”. You will lose valuable time and perhaps the deal as well.

The requirements for qualifying are fairly simple. You will need your last two years of tax returns or W-2’s. You will need to have your most recent paystub and 2-3 months of bank statements. If you are renting right now you will also need the last years worth of cancelled checks or a letter from the property manager.

Last but not least is your closing. Many people worry and sweat over this part but if everyone has done their job then it is smooth and seamless. By now all your questions have been answered and there should be no surprises. You know what you rate is, what the term is and how much money is required - ZERO! It’s such a pleasure to see new homeowners walk away from closing with a low 6.0% fixed rate and their new home - wow! You can do it - don’t let this opportunity pass you by.

You’re thinking about buying a home and don’t want to read through a thick book about mortgages. This article provides some general home loan basics to get you started.

The decision to purchase a home by taking out a mortgage is both serious and far reaching. You’ll be either increasing or entering into debt, which means you’ll be responsible to make significant monthly payments. There will also be upfront fees you must pay. Thus you should make sure that you understand the mortgage process and pick both your loan program and your lender wisely.

As you compare mortgages, you’ll want to understand some basic terms: mortgage, rate, monthly payment, closing costs, APR, ARM, and fixed.

First, what is a mortgage? A mortgage is a loan used to either purchase a property or to pay off an existing mortgage loan. The property itself becomes the collateral. In other words, if the borrower defaults on the mortgage, then the mortgage owner has legal claim to the house and can take possession of it.

The term “rate” refers to the percentage used in calculating the amount of interest you’ll pay for your loan. The interest is essentially your cost for borrowing money. If the interest rate remains the same throughout the loan term, then the mortgage is considered a “fixed-rate” loan. On the other hand, if the rate can change, then the mortgage is called an adjustable rate mortgage or an ARM.

Besides interest, there are additional costs associated with obtaining a home loan. These could include fees for underwriting, the application, checking your credit history and scores, having the property’s value appraised, loan origination, title search and insurance, etc. Together, these fees are called “closing costs”.

Brokers and lenders can charge different amounts for these closing costs, which makes using the interest rate by itself an ineffective method of deciding where to buy a loan. Instead of comparing interest rates, you should compare what is known as the Annual Percentage Rate or APR, since it is calculated by adding the closing costs to the loan amount. It provides a more standardized number for comparing loans among lenders.

When choosing a loan, pay special attention to the loan’s total monthly payment. This amount includes what you’ll pay on principal and interest, property taxes, hazard or homeowner’s insurance, HOA dues, and mortgage insurance. When mortgage insurance is factored into your monthly costs, some loans with a higher interest rate might actually have a lower monthly payment. You could end up paying less overall if you pick one of those loans.

By August of 2005, the sub-prime mortgage market was in high gear. Rates were at 40 year lows and borrowers only needed to fog a mirror to get a loan.

There were two main choices for sub-prime loans. The 2/28 or the 3/27. At the time, the “standard” sub-prime mortgage product was the 3/27 ARM.

The 3/27 had a few basic traits: A fixed, 3-year “starter rate” and every six months thereafter, the mortgage rate changed. The formula by which it changed was usually (4.999 percent + the 6-month LIBOR rate). If the loan was interest only, it usually converted to principal + interest at the first adjustment, too.

Since around August of 2005 was the very peak of sub-prime lending, it only makes sense that the height of its adjustments would take place now.

For homeowners with adjusting sub-prime loans, there is some (relative) good news out there. Today, LIBOR hovers near 3.15 percent, meaning that an adjusted mortgage rate will be in the neighborhood of 8.15 - 9.15 percent.

This is versus the rate of 10.30 - 11.30 percent that sub-prime borrowers faced last summer when LIBOR was much higher than it is today.

Certainly interest rate and payment increases of any amount can cause financial hardship. If you are a sub-prime borrower and are having difficulty be sure to contact your lender before you start missing payments.

A second mortgage is basically a loan that you take against the equity that you have already built into your home. The proceeds from the second mortgage can generally be used for whatever purpose the borrower has in mind. It can be used to pay off a car loan or credit cards. The proceeds can be used for home improvement or to take a vacation. The money can even be put in a savings account for a rainy day fund.

Historically, the total amount of debt from the first and second mortgage combined could not be more than 80% of the total market value of the home. However, low interest rates and a competitive marketplace have created a lending environment where some lenders are approving second mortgages that, when combined with first mortgage balance, is totaling as high as 125% of the home value.

Most financial advisors will warn you that carrying that much debt on your home is never a good idea. In my practice, I never recommend borrowing more than 100% of the value of your home and would rarely recommend a second mortgage with a loan to value of greater than 90%.

Because a second mortgage is a property lien that is placed behind the first mortgage, this means that in the event of a default, after the property is sold the first mortgage gets paid first, including any legal costs and other costs of the sale, before the second mortgage can be paid. If there is not enough money from the sale of the home, the second mortgage does not get paid.

A Higher Interest Rate for Second Mortgages

Before a lender is willing to loan money out for a home mortgage, he looks at the risk level to him to determine the interest rate to charge. That is why a high risk borrower with a poor credit history gets charged a higher interest rate compared to a low risk borrower with a strong credit history.

This theory also holds true for a second mortgage. Because a second mortgage lender is (by definition) second in position to be paid off in the event of a default, and because there is a greater chance that in default there may not be enough equity in the home to pay off the second mortgage in full, second mortgages are almost always given at a higher interest rate regardless of who the borrower is.

2nd Mortgage Terms

Although you will have choices for terms when selecting your second mortgage, in general the terms given for them are shorter than those of a first mortgage. This is primarily because the amount of the second mortgage is generally much lower than that of the first mortgage.

Repayment terms for second mortgages can vary considerably, so it is important to look around for the one that is best for you. Mostly they range in length from 5 to 20 years, with the majority of the loans being 10 to 15 years. Some lenders may offer a 30 year amortization with a balloon (maturity date) of 15 years. This type of loan is referred to as 30 due in 15. Generally, the longer the maturity, the higher the interest rate. Conversley, the higher the credit score, the lower the interest rate.

Second Mortgages Types

Just as the length of the second mortgage can vary, so can other repayment terms. The majority of second mortgages are paid back in equal monthly payments with a portion of the payment going to interest and a portion to the principal balance, just like a first mortgage.

The two most common types of second mortgages are the fixed rate and the home equity line of credit (HELOC). The former is a standard offering. The home equity line of credit is a little unique and has been very popular. The loan typically calls for interest only payments for the first 5 to 10 years and then the line of credit is frozen at the outstanding balance of the loan. At that point, the loan payments are recast and a standard principal and interest payment is established for the remaining 10 to 20 years. The HELOC’s are typically priced with a variable interest rate that is most commonly indexed to the New York City prime interest rate.

As with other loan pricing, the lower the FICO score and the higher the loan to value, the higher the interest rate for HELOC type mortgages.

When considering a second mortgage, do your homework and shop around to ensure that you get the best deal for you!