A Qualified Mortgage Consultant Can Help Boost Credit Scores

Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower's income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It's important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it's safe to assume that as the consumer's credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit ? sometimes referred to as "sub-prime" ? can range anywhere from A-minus, B-paper, C-paper or D-paper loans.

If you have already taken out a mortgage loan with a higher interest rate because your credit score was a little under par, you will really appreciate the value in doing a little work to improve your credit score. Refinancing from a D-paper loan to a B-paper classification can save literally thousands of dollars in financing fees over time, even though the B-paper loan is still considered sub-prime.

A qualified mortgage consultant will guide you through the nuances of the process of improving your credit score to refinance and save money. First and foremost, he or she will want to review the terms of the existing mortgage loan to determine if you have a pre-payment penalty clause written into your contract. In general terms, that means that if you sell the home or try to refinance before the pre-payment penalty expires and you have not already paid off 20 percent of the original loan amount, you will most likely have to pay a 3 percent fee back to the lender to compensate for the high risk and high costs incurred to provide that financing.

Next, you should obtain free copies of your credit reports from www.annualcreditreport.com and start working on improving the credit score six months prior to the expiration date on your existing pre-payment penalty.

There are five factors that make up the credit score and your mortgage consultant can coach you through some basic strategies to improve your credit score. This means very conservative use of credit cards, paying off debt as much as possible and not applying for additional credit cards unless you will benefit from such action. You will want to verify that negative items you have paid off are being removed from your credit report, and that good credit history is being reported to all three bureaus. You'll also want to dispute any errors that appear on your credit reports and seek to have those removed entirely.

Once your credit score improves, it's time to refinance at a better interest rate. Your mortgage professional should look for a program that carries no more than a two-year prepayment penalty so you can continue to refinance as your credit score increases. You can repeat this process until you reach A-paper status and secure the best interest rate available.

This is a strategy that also works well for first time home buyers who do not have enough credit history under their belt to get an A-paper loan at the time of purchase. The important thing is to work with a mortgage consultant who can give you a roadmap to follow and a strategy for success in building personal wealth.

Mical Johnson is affiliated with Rock Financial, Inc., a Licensed Correspondent Mortgage Lender, Florida Department of Finance. Mr. Johnson hosts Home Buyer's Seminars which are open to the public each month in the TampaBay area in Florida. Seating is limited. To reserve your seat at the next event, call 813-833-2568 to RSVP and obtain a free copy of Mr. Johnson's Home Buyer Handbook. You can also contact him at http://www.TampaMortgageGuy.com He is also a contributing author at http://www.Debt-Free-Personal-Finance.com

---

Home Improvements Turn Average Homes into Dreams Come True

If you're thinking about taking out a home improvement loan,... Read More

Refinancing Your Home - Is the Time Right?

Refinancing your home is a major decision not to be... Read More

Private Mortgage Insurance (PMI)

If your down payment on a home is less than... Read More

Home Equity Loan ? Not Just For Home Repairs, And Tax Deductible, Too!

Thanks to the combination of low interest rates and skyrocketing... Read More

Homes, To B(uy) or Not to B(uy)

Whether you are just moving out on your own for... Read More

Recent Bankruptcy? Its Not Impossible to Obtain a Home Loan

Because the new bankruptcy laws go into effect on October... Read More

How to Find a Direct Homeowner Loan

If you've been thinking about applying for a direct homeowner... Read More

How To Get The Best Home Equity Loan

Are you wondering how to get the best Home Equity... Read More

Tips For First Home Buyers On Getting Home Loans

Buying your first home will likely be the biggest and... Read More

Home Equity Increases $1 Trillion in Five Years ? Is the Market Peaking?

A new survey reveals that in the last five years,... Read More

Florida Refinance - Refinancing in Florida

The decision to buy a home in Florida can be... Read More

5 Things In Selecting The Best Mortgage - You Should Know

Your goal is not only to find the best rates... Read More

The Zero Down 80/20 Mortgage

This is an excellent loan for those that are lacking... Read More

Refinance Your Second Mortgage

A 2nd mortgage is a secured loan on your property,... Read More

Refinancing Your Mortgage Can Open Up A Lot Of Options For You And Your Family

It can happen to anyone, the roof is leaking, the... Read More

Stopping Foreclosures

If you as an investor understand the process, you will... Read More

Buying a Home With Bad Credit - Get Approved With a Recent Bankruptcy or Foreclosure

A few years ago, if you had a bankruptcy or... Read More

Reverse Mortgage ? Be Sure You Need It Before Applying For One

Reverse mortgages used to be considered the last resort of... Read More

What Exactly Is A Reverse Mortgage And How Does It Work?

A reverse mortgage is a certain loan that allows the... Read More

What is a Fixed Rate Mortgage?

As the term implies, with a fixed rate mortgage the... Read More

Home Equity Loans: A Useful Financial Tool

The investment need of an individual varies with time. Thus... Read More

Home Equity Loans - Are They Right For You?

The bills are out of control and you need a... Read More

Using a Calculator to Assess Your Loan

Buying a house is a very important step in your... Read More

Residential Mortgage - Finding The Best Home Mortgage Lender

Most people approach the act of getting a home mortgage... Read More

No Money Down Home Loan

Are you in the market to purchase a home but... Read More

Homeowner Loans - Whats Available?

It isn't difficult to get a homeowner loan if you... Read More

Mortgage: Effective Household Investment for Financial Autonomy

If finances had a copyright, we would have bought it... Read More

Should You Get an Interest-only Home Mortgage?

Before you consider taking out an interest-only mortgage, you should... Read More

Bridging Finance Basics

Bridging finance is a short-term loan that is used as... Read More

No Deposit Home Loans

A few years ago, many of us would have had... Read More

Refinance Mortgage Rate and Mortgage Rates

Refinance mortgage rate is the best rate available to qualified... Read More

Poor Credit Mortgage Reigns High Among Mortgages Available to Bad Credit Borrowers

Like a big brother keeping notes of the erring behaviour... Read More

Applying Online For A Home Loan Can Give You an Instant Approval

"Instant Approval For Home Loans" is a common refrain for... Read More