June 2002 


Source: Marilyn Kennedy Melia-Gannet News Service 


One way to find out your credit standing is to make an appointment with a Mortgage Lender to pre-qualify for a loan. A Lender will discuss your credit/how much money it may be willing to provide/share your credit score with you and suggest ways to improve your credit during the prequalification process. You want to make sure information provided is accurate. A mistake or unexplained misunderstanding in your report will lower your credit score and have an impact on how much you can borrow. 

Someone with a good/acceptable credit record/some savings and making a ten percent (10%) down payment may be approved for a mortgage that, combined with other debts, eats up thirty-eight percent (38%) of his or her pay. There are fixed-rate loans, in which the interest rate stays the same during the life or term of the mortgage. Adjustable-rate or ARMS mortgage loans carry a lower initial interest rate, which changes according to market conditions with a CAP or Ceiling. There is also a "hybrid" loan, combining fixed rates & ARMS allowing Borrowers to enjoy a slightly lower interest rate that stays fixed for a relatively long period. 

No matter what credit scores predict about your ability to pay your bills, it doesn't make sense, emotionally or financially, to write out a check each month that leaves you praying the children don't need new shoes or the roof doesn't leak. Keep a record of all your expenditures for @ least 1 month: plug in an anticipated mortgage amount plus any related expenses that your new home would require, such as higher utility bills. If you can't sleep well with the larger debt to buy your house of dreams, it will rapidly become a house of nightmares.


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This web page was updated on 05/30/2002