What Do You Think?  As of January 2011, FHA enacted a new requirement that any lender that wants to do business with them must have at least $1,000,000 of reserve funds in the bank – end of story.  That has already driven many smaller mortgage brokers out of business across the country, or forced them to merge with a bank.  Now FHA is further limiting the number of lenders that can offer Reverse Mortgages by requiring those lenders to have at least $5,000,000 in the bank. 

What does this mean for the consumer?  Fewer options.  Many people in consumer rights groups and in the mortgage industry speculate this is the government’s way of forcing more people to have to do business with the major banks, so they have fewer entities to regulate.  What Do You Think – is this good for consumers?

To view FHA's article, follow this link http://bit.ly/ewEHcO.

Bankruptcy can stay on your credit report for up to 10 years.  While a bankruptcy will damage your credit rating, it may be less damaging than many negative marks on your credit report. 

Your credit score usually rises within a year or two of filing bankruptcy if you can show a consistent pattern of paying on time and some financial stability.  You should try to establish some form of credit from sources which you can use as references.  If these sources of credit do not normally report to the credit bureaus, you may ask them to do so.

The reason for which you filed bankruptcy can be an important factor in your credit file.  You may have had a good credit history but fell victim to a financial disaster, such as a business failing or a medical problem.

If you have otherwise been a responsible bill-payer, you would like prospective creditors to know the circumstances behind your bankruptcy.  You can do this by issuing a 100 word statement to each of the credit bureaus so that they may make this part of your credit file.  Your statement should include:

·         The isolated factor which caused your bankruptcy

·         Your otherwise good credit history

·         That the financial problem has been erased and you are now financially stable

You can possibly eradicate a bankruptcy mark on your credit report much the same way that you do a tax lien. If you challenge a bankruptcy mark on your credit report, the government must document the bankruptcy to the credit bureau within 30 days. 

If you have struggled with bankruptcy in the past and are unsure if you are able to refinance or purchase a home, one of our Home Loan Specialist would be happy to review your situation. Give us a call at 1-888-562-6200 or head to our website www.churchillmortgage.com to Request a Call Back and one of our Loan Specialists will contact you at a time that is convenient for you.

A Credit Score is a number assigned to a consumer that, based on 5 principal determining factors, statistically determines the probability that you will become 90 days late or more on any loan obligation over the next 2 years.

- The FICO score is the most widely used scoring system, and is what most mortgage lenders use.

- There are three (3) major credit bureaus in the U.S. who have business relationships with thousands of creditors across the country, and that is why you may have three "scores" that are reviewed.  Those creditors will "report" the information they have about you to these credit bureaus at various times.  They do not have to report their information to the bureaus, and some creditors only report to one or two of the bureaus.  Therefore, it is very hard to increase your credit score if you don't know to whom your creditors are reporting.

- A credit score is calculated by taking all of the various information about your credit profile and running that data through a computer model, where points are added and subtracted based on a "perfect" credit model.  (This "model" is proprietary information to the FICO organization)  Once the calculation is complete, out pops a credit score for that bureaus' credit file on you.

- Credit scores are affected by almost everything about your credit data, ranging from the length of time you have had an account, to the ratio of the balance available vs. the balance owed.  And of course there is the obvious negative impact of any derogatory history.

- When a Loan Officer in the mortgage business is referring to your credit score, he/she is talking about the middle score out of the three (not an average, but the actual score that is not the highest or lowest).  

The Good News 

If you are one of the millions of Americans who have had credit problems, do not despair. Even with negative items in your credit file, such as late payments, liens, or bankruptcies, there are some things that you can do to rebuild your credit. But you need a strategy to follow that really works.

At Churchill Mortgage, we were not satisfied with the limited options available. So we did extensive research into how the Credit Scoring software actually works.  We then trained a team called the “Credit Score Improvement Team” whose purpose is to show our customers how to increase their credit scores quickly, and get approved for A+ interest rates.  If you are interested in refinancing or purchasing a new home and need guidance regarding your credit score, contact one of our Credit Score Specialists at 1-888-562-6200. 

Put very simply, the decision to refinance a home should be based on whether you will own the property long enough to recapture the expense connected with the new loan.  The way to figure this can be as easy as subtracting the proposed new house payment from the existing payment to find out what the monthly savings will be.  Then, divide the monthly savings into the cost of refinancing to determine how many months it will take to recapture that cost.

There are some situations in which a refinancing decision should invariably be made.  If you are able to negotiate a “no-cost” mortgage (you pay no points or closing costs) and if the new mortgage rate is lower than your existing rate, then refinancing your loan may be of financial benefit to you.  If the remaining mortgage balance, including points and closing costs, can be refinanced at a reduced monthly payment and still be paid off within your existing mortgage payment term, then refinancing would be advisable.  Lastly, you can generally count on it being time to refinance when your new mortgage rate is at least one to two points lower than your existing rate and you plan to stay in your home for at least three to five years.  

Contact a Home Loan Specialist at 1-888-562-6200 to see if refinancing is right for you. Or go to our website www.churchillmortgage.com and fill in the Refinance Application and a Home Loan Specialist will contact you about your specific situation.

What many people don’t realize is the FHA loan can be a great refinance loan.  Starting around 2008, the appraised values of properties in the U.S. started to fall nationwide.  When the interest rates dropped due to the economic situation and government intervention, many rushed to refinance their homes.  Unfortunately, many found their homes had dropped in value to a level that exceeded the guidelines allowed for a Conventional refinance.  However, many that had an existing FHA loan qualified for the Streamline Refinance program and were able to refinance to the lower rates.  And for many of those that did not qualify under Conventional guidelines, an FHA loan allowed them to benefit from the lower rates as well. 

The key is you need to have your available options presented to you side-by-side so you can make an informed decision.  Don’t rely on hearsay and rules of thumb when you are making large financial decisions.  Take time to look at the numbers and work with someone you trust that will explain them to your satisfaction, then make the best choice for your personal situation.  Churchill Mortgage would be happy to assist you in this process. Contact one of our Home Loan Specialist at 1-888-562-6200 or Request A Call Back on our website www.churchillmortgage.com and we will contact you at a time that is convenient for you.