Tips on Fixing Your Credit Score

Among the factors that can cause a low credit score are increases in consumer debts (auto loans, credit cards, etc.). A higher debt-to-credit limit available is considered a higher risk and can result in a drop of about 20 points.

A few late payments on a credit card or other loan can lower your score by as much as 100 points if you have a fair score or 80 points for someone with a good score.

The good news is that the older the negative item, the less impact it will have on your credit score. A collection that is shown on your credit report as paid and closed five years ago will hurt much less than a collection that is five months old - even if it is paid and closed.

There is no quick fix to improve your credit history and score if you have had any late payments, collections, etc. The "credit repair" companies that advertise "wiping out" your "bad" credit history are not able to do anything different then what you can do on your own to correct any erroneous information. Only time will increase your credit score once your derogatory debts have been brought current and show accurately on your credit report.

Tips for Good Credit: 1) Review your credit report at least once a year to ensure your credit information is being reported accurately, 2) Change your behavior, meaning pay your bills on time even if it is only the minimum payment. Bills paid on time is the single most important factor in determining your credit score, 3) Pay down or pay off debts with high balances on credit cards and other revolving accounts (such as a home equity line of credit). If your debt balance is not less than 35% of your available credit, your credit score can be decreased substantially.

A long history of good payments on a car loan, a mortgage, or a credit card increases your credit score. Keep older credit card accounts open, even if they are not being used because the algorithm rewards a long, positive credit history. If there are some credit card accounts that will not be used, close the newest ones first, and leave enough credit accounts open to keep your credit used to available credit at the 35% or less ratio.

Limit the new credit applications being made, because too many new accounts can lower your score. The exception is shopping for a mortgage or a car loan, as multiple inquiries for the same purpose in a reasonable period of time are considered a single inquiry.

In addition: 1) if you do not have one, open a checking and a savings account and use them wisely, 2) do not co-sign for another person on a credit card or loan, and 3) if you can not pay your bills, contact the creditors or see a legitimate credit counselor.

Interest Rates as of 08/30/2010

Conventional, 30-yr Fixed Rate: 4.25%/APR 4.399%
FHA or Federal VA, 30-yr Fixed Rate: 4.25%/APR 5.39%

Interest rates shown are with a 1% Loan Origination Fee. Interest rates and loan programs are subject to change without notice. Please visit us at www.equityloansoregon.com to contact us for further information.

Interest Rates as of 08/26/2010

Conventional, 30-yr Fixed Rate: 4.25%/APR 4.399%
FHA or Federal VA, 30-yr Fixed Rate: 4.375%/APR 5.091%

Interest rates shown are with a 1% Loan Origination Fee. Interest rates and loan programs are subject to change without notice. Please visit us at www.equityloansoregon.com to contact us for further information.

Rural Guaranteed Loan Program Update

Funding Notice From the National Office in Washington, DC - Congress recently passed legislation which has provided USDA (United States Department of Agriculture) with the authority to resume operating the Single Family Housing Guaranteed Loan Program (SFHGLP) at no cost to taxpayers. This loan is available through approved USDA lenders.

The new legislation increases the up-front fee from 2% to 3.5% of the principal loan balance. The legislation also gives USDA authority to charge a new annual fee up to 0.5% of the outstanding principal balance.

The 3.5% up-front fee is sufficient at the current subsidy rate and the annual fee may be introduced in later years to keep the USDA Program at zero cost to the taxpayers.

FHA May Reduce Seller-Paid Closing Costs from 6% to 3%

The FHA's rationale for the proposed rule change is that the current maximum level of seller concessions - 6% - exposes the agency to excessive risk. It also creates an incentive to inflate the appraised value of the property to cover the amount of the concession.

The proposed rule is being analyzed by the Federal Reserve before a final decision will be made. The FHA says the new rule would align FHA loans with industry practices and reduce loan defaults by borrowers who don't have a sufficient investment in their home purchase.

Buyers who do not have enough cash - after putting the required 3.5% down payment - to pay their close costs without a larger concession than the proposed 3% - should discuss their situation with a knowledgeable loan officer.

Interest Rates as of 08/17/10

Conventional, 30-yr Fixed Rate: 4.25%/APR 4.49%
FHA or Federal VA, 30-yr Fixed Rate: 4.25%/APR 4.812%

Interest rates shown above are with a 1% Loan Origination Fee. All loan programs and interest rates are subject to change without notice. Please visit us at www.equityloansoregon.com to contact us for further information.

FHA To Change Mortgage Insurance Premiums

The Federal Housing Administration (FHA) will be implementing its new mortgage insurance premium structure on October 4, 2010.

Congress recently passed a bill that allows FHA to increase the annual premium to 0.85% for loans up to and including 95% of the sales price or value. The annual premium for loans greater than 95% of the sales price or value will be 0.90%. The previous statutory limit was 0.55% with less than a 5% down payment and 0.50% with a 5% or more down payment.

Under this new bill, FHA will lower its financed, up-front mortgage insurance from 2.25% to 1.00%. This change will help FHA to build up its cash reserves, which are currently lower than needed.

Interest Rates as of 08/12/2010

Conventional, 30-yr Fixed Rate: 4.25%/APR 4.49%
FHA or Federal VA, 30-yr Fixed Rate: 4.25%/APR 4.812%

Interest Rates shown are with a 1% Loan Origination Fee. Interest rates and loan programs are subject to change without notice. Please visit us at www.equityloansoregon.com to contact us for further information.

Mortgage Interest Rates as of 08/04/10

Conventional, 30-yr Fixed Rate: 4.25%/APR 4.49%
FHA or Federal VA, 30-yr Fixed Rate: 4.25%/APR 4.812%

Interest rates shown are with a 1% Loan Origination Fee. Interest rates and loan programs are subject to change without notice. Please visit us at www.equityloansllcoregon.com to contact us for additional information.