Improve Your Credit Score With Physics – Today’s Mortgage & Real Estate News

Let me clear my throat THROAT CLEAR I'm Dan on your inside team at Growella

It's Monday, May 7, 2018 Welcome to today's Mortgage Minute-and-a-Half When you keep your hot sauce in the refrigerator, isn't just sauce And, when you keep your adjustable-rate mortgage only until it adjusts, isn't just a mortgage According to Ellie Mae's most recent Origination Insight Report, a look at U

S home loans and the statistics behind them, six-point-three percent of all loans closed this March were adjustable, the highest percentage of adjustable-rate mortgages versus all loans closed since two-thousand-fourteen This is the clearest signal yet that buyers are warming to advantages of ARMs Here's how they work For some number of years, three five seven or ten, the interest rate of an ARM stays unchanged and fixed

Then, after those years are up, the rate can change, once per year, using a formula that typically caps the size of each adjustment to two percent per year Except, there's no rule that says you have to let your loan adjust It's your thang Do what you wanna do If you want to refinance, fine

Or, maybe you want to sell That's fine, too, and maybe it's part of your plan to get a ten-year ARM, move in six, and never face the adjustment of your adjustable-rate mortgage at all And with fixed-rate mortgage rates rising this year, it looks like this is exactly what buyers are opting to do Just remember this, though: ARMs are not tools to help you buy more house They're tools to help you spend your cash more wisely

And, played right, they'll save you a lot So, talk to your loan officer about adjustable-rate mortgages and whether they're a fit for you Today's mortgage rates are falling, which is good news for refinancing households and buyers who went into contract for a home this past weekend Mortgage rates for conforming, FHA, jumbo, VA and USDA loans are down as compared to Friday but the specific rate you get from a lender will depend on your credit score, your loan size, your state of residence, and about a dozen other factors You'll also get a lower mortgage rate by talking to multiple lenders

That's statistically proven Even if you just talk to two mortgage lenders, that's better than talking to just one So get to it, and find your best combination of rates, fees, service To spell panda you only need P and A, and to improve your mortgage credit score, you only need to know how the formula works Credit scores are mathematical computations, probability figures

And, in the mortgage world, they're designed to determine the likelihood of a person missing their mortgage payment over three consecutive months Why three consecutive months? Because after three months, lenders consider a loan in default, which is bad outcome for all the parties involved Lower scores correlate with higher rates of default, but credit scores are not a predetermination Which means they can change Whether your credit score is very, very high or very, very low, it's still just a probability based on your past behaviors

And those behaviors are grouped into five areas Your recent history of making payments, the percentage of unused credit you have available to you, your years of experience managing credit, the types of credit you have access to, and your recent credit access patterns These are the building of your score, which are put against a timeline borrowing heavily from Newton's first law of motion – the law of inertia An object in motion tends to stay in motion Because lenders know this is how people work

How you've treated credit in the recent past is likely the same as how you'll treat credit in the very near future Which is why your credit behavior of the last six months will have an outsized effect on your credit score What you've just done has a lot to say about what you're about to do You can improve your credit scores over time As different patterns emerge on your report, your score will reflect those changes, getting you access to new mortgage programs that can fit your borrowing needs, and lower mortgage rates overall

Growella does mortgage news Mondays, Wednesdays, and Fridays each week and we go live each Thursday at Noon Eastern, 11 Central So, put a like on it, leave a comment, and remember that people who sleepwalk are following their dreams