19 03, 2020

FICO10: What to Expect

2021-09-28T16:50:02+00:00March 19th, 2020|Uncategorized|

FICO recently announced the change to FICO 10. When it comes to purchasing or refinancing a home, FICO’s credit score changes probably won’t make a difference, but here’s some changes to expect.

The introduction of FICO 10, the updated scoring model coming this summer, has caused some concern that scores will likely drop by 20 points or so for millions of U.S. consumers. For those affected, accessing credit may become more difficult and more expensive.

Those who carry a lot of debt will likely be most affected by the new model. Moving high credit balances around or consolidating them into personal loans may cut interest expenses, but if you never pay them off, your amount of debt continues to build. Your credit score will benefit most if you pay those balances down.

The FICO 10T, one version of the new model, looks more closely at how individuals have managed their credit over the last 2+ years. The basics of good credit remain the same. In order of importance to your score: pay your bills on time and pay more than the minimum, keep usage under 30% of limit, keep old accounts open to preserve length of credit history, avoid new credit and keep a mix of credit types in use.

The good news is that most mortgage lenders will not immediately adopt the new model. Many still use FICO versions 2, 4 or 5 which means if the new FICO 10 will negatively affect you, you may have time to focus on raising your score first.

If you are wondering about how this change could affect your ability to get a mortgage or refinance, contact one of our loan officers.

11 03, 2020

Is Now a Good Time to Refinance Your Mortgage?

2021-09-28T16:50:03+00:00March 11th, 2020|Blog, Mortgage 101, Refinance|

With interest rates hitting an all-time low, there’s a few of questions on whether refinancing your mortgage right now is a good idea. If you are considering refinancing your mortgage, keep these basics in mind.

Refinancing is the process of replacing an existing mortgage with a new loan. People usually refinance their mortgage in order to reduce the monthly payments, lower the interest rate or change the loan program from an adjustable rate mortgage to a fixed-rate mortgage. Some people need access to cash in order to fund home renovation projects or pay off various debts and will leverage the equity in their house to obtain a cash-out refinance.

The process of refinancing is similar to obtaining the first mortgage so there’s not too much to be concerned about in that sense but you’ll want to make sure you will be getting a better interest rate, lower payment or whichever benefit you were wanting to accomplish your goal

If the talk about federal rates or refinancing have you wondering if you should refinance your home loan, be sure to have an expert look over your options with you. Our mortgage calculator can give you an idea of what type or rate you’ll be looking at. Our loan officers are ready to help you lower your interest rate on your mortgage today. Contact us to get started.