A VA entitlement is the amount the VA will guarantee in order for a VA loan to be made. Historically, VA entitlements were based upon…

Veterans, active duty personnel, reserve troops, and surviving spouses of veterans may be eligible. There are some requirements for each category. All honorably discharged wartime…

In 1944, as part of the GI Bill of Rights, the U.S. government established a special program that rewarded certain members and veterans of the…

Sometimes it’s to offset an additional layer of risk, while at the same time keeping the borrower’s payments lower. For example, a lender agrees to…

A prepayment penalty is an agreed-upon amount the lender gets in addition to normal principal and interest payments if the borrower pays extra on the…

Of course you can. Sometimes first-time home buyers might think that they don’t want a 30-year fixed rate because they don’t want to be paying…

It is a loan that is above the conforming loan limit. Just like conforming loans, jumbo mortgages may also be bought and sold in the…

There are occasions when a lender makes a special agreement with Fannie Mae and Freddie Mac and markets these loans under slightly different terms. Such…

We’ve mentioned Fannie Mae and Freddie Mac earlier, but let’s take a moment to see what their real purposes are. Fannie and Freddie are the…

Fannie Mae and Freddie Mac set limits—the same way every year—by reviewing the average home price from October to October. If the average price of…

Besides deciding between a fixed rate and an adjustable rate, you also need to examine the types of loans available to you. Most loans will…

A buydown either temporarily or permanently reduces the note rate on a mortgage. A temporary buydown is sometimes called a two step or a 2–1…

A balloon mortgage is a loan whose entire note balance becomes due after a predetermined period. Balloon mortgages are recognized by their names, such as…

A hybrid loan is simply a combination of a fixed and an ARM where the rate is fixed for a predetermined number of years before…

Probably. For borrowers who locked in at the right time, ARMs may also help them to not only get a lower starting rate than competing…

There are four basics for an adjustable rate mortgage (ARM): the index, the margin, the adjustment period, and rate caps. The Index. This is what…

When rates are at relative highs compared to the previous years. If rates are currently at a high cycle, chances are rates will go down…

When rates are at relative lows compared to the previous two or three years. Here a fixed rate is good, because it locks in that…

As many as you can imagine. Here’s a brief list of the most common types of mortgage loans offered by every lender or mortgage broker:…

Credit scoring works like a credit report. Conventional loans use the middle credit score from the person who makes less money. Other loans use the…

That’s a good question. Most lenders will use the middle score, not the highest one and not the lowest one. And there’s a reason. Even…

Credit scores have no clue as to your marital status, whether or not you have kids, your race, religion, or whatever else. They scores look…

Your loan officer should help you with that, but you should only submit a rapid rescore to the two bureaus with the highest current scores.…

The way you can get incorrect items off of your credit report is the very same way you get your score corrected, except for one…

Not if the inquiries are for the same mortgage. An ‘‘inquiry’’ occurs when someone or some business inquires about your credit by contacting the credit…

You can’t. But you can ask for an increase in credit limits. Perhaps one of your current lenders will raise its maximum credit limit for…

Your payment history and amounts owed are the biggest factors, but other items can affect your score as well. One of the more common scoring…

The secret formula appears to be 30 percent. Keep your monthly credit balances around 30 percent of their limits. Is $10,000 your limit? Keep a…

A lender typically won’t approve or decline you solely on the basis of a number. There are some loans that do require a minimum credit…

That depends upon the loan program, but credit scores don’t ‘‘approve’’ or ‘‘decline’’ anyone. Lenders may have minimum credit score requirements for particular loan programs,…

By buying things on credit. Again, these computer models need a credit history of typically two years. I’ve seen credit reports with no score available…

That’s easy. It wasn’t too long ago that obtaining your own credit score was nearly impossible without applying for a mortgage loan first. Now it’s…

Amounts owed is relatively easy to identify: It’s how much you owe compared to how much you’re allowed to borrow. But here again, conventional credit…

Credit scores can be affected by how often you make your payments on or before the due date. The scoring model reviews the existence of…

Numerical values are assigned to your payment patterns, available credit, number of credit inquiries, and type of credit. TELL ME MORE Scores give greater weight…

Credit scores are numbers that are derived from a consumer’s credit history. The number reflects the various credit details in a consumer’s past. People with…

It’s possible with an FHA loan. FHA allows for the purchase of a home provided that the monthly payments to the trustee are made on…

You’re probably not as bad off as you think. Some lenders ask that your bankruptcy be discharged for two years and still others ask that…

Your application will be reviewed just like any other. It’s a common misconception that unmarried couples can’t apply for a mortgage loan together. They certainly…

Keep your divorce decree handy so you can show who the judge said was responsible for paying what. Getting divorced is a bad thing. What…

If you’ve got good credit and your spouse has bad credit, there’s really no way to ‘‘average’’ your overall credit standing. One way to overcome…

You can, but creating a new identity can be illegal. Although some companies claim they can establish a brand-new identity for you, nothing can be…

Sure they can. But you need to be careful in choosing the company and also understanding the impact it will have on your overall credit…

Alternate credit in relation to mortgage loans is sometimes called nonstandard credit. These are items you must pay each month but won’t appear on your…

Sure they can ask, but that’s about all they can do. The only thing a seller needs to know is if you’ve been qualified for…

The best use of a cosigner is with an FHA loan, because they make the most liberal use of the nonoccupant coborrower’s income. If you’re…

There are lenders that specialize in mortgages for people with bad credit, and we’ll explore those loans in detail in Chapter 9. Such loans, normally…

You’ll need to have some data to back up your claims. Otherwise, the information won’t leave your report. If you and the creditor have a…

The easiest way to correct a mistake might very well be through your lender or mortgage broker, not the credit repository itself. In fact, it’s…

Sure you can. And you have the right to include any explanation you deem fit to be reported along with your credit information. Unfortunately, this…

The credit repositories tell you to challenge the alleged mistake, in writing, and if they can’t verify that the entry is correct within thirty days…

Get your credit report as early as you can and review it for accuracy. Although you can get your report from most anyone (according to…

You must realize that while helping out your brother, you also obligated yourself to the car lender. The car payment history will show up on…

By doing the very same things that got you the good score in the first place. Keep a few trade lines open, don’t max them…

By opening up three trade lines for a minimum of two years—the more years the merrier—and making your payments on time, every time. Also, by…

Good credit is obtaining credit and using it responsibly. This means keeping your debt load low compared to your available credit and paying back your…

Neither, actually. It might sound a bit surprising, but a lender gives no more and no less credit depending upon the type of bankruptcy filing.…

A Chapter 13 allows for repayment of your obligations over a predetermined period of time, whereas a Chapter 7 completely wipes out all consumer debt…

The credit report gathers information on who you are and how you pay your bills. It doesn’t list anything regarding your race or marital status.…

It contains a list of companies where you applied for credit, what your credit limits are, and if you’ve paid on time. And more. There’s…