Mortgage Info

Risk Based Pricing In The Conventional Mortgages Market

When it comes to Risk Based Pricing And Home Loans simple common sense can be used for determining borrower payment abilities. The rate may be differ regarding the risk factor, but still in some cases, it is not enough to place all the risk management at high mortgage rates.

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Foreclosure? BEWARE Of “Mortgage Rescue” Companies Scam

Mortgage rescue company scams as they cause even greater instability to the housing markets. They are rocking a sinking boat. See here which scams to be alert from, and how to protect yourself when sinking down the mortgage drain.

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2012 Mortgage Is Possible For Economic Crisis Survivors

The current state of the economy has given most average hard working Americans enough anxiety to last a life time. It is quite easy to get caught up in all the doom and gloom to become apathetic regarding the future. But getting a mortgage home loan at 2012 is still possible.

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VantageScore Scale A-B-C-D-F Letters Explained

Understanding The New VantageScore Scale

The new VantageScore credit scale uses letters and not only figures like the traditional FICO score does. Many people are having difficult time to adapt to the new credit scale, which was made to assist everyone understand their credit situation better.

The FICO score scale which runs from 350-850 is the more popular credit scale used, but with credit grades ending at 850 evaluating a persons credit position is more complicated. The new VantageScore scale may take some more time to become familiarized by the markets, but once used it is more friendly to understand.

In this short review we will try and explain the VantageScore letters scale, so next time you see a credit score in letters and not in the traditional figures, the overall picture would be much clearer.

Why Vantage Uses Two Scales – Figures & Letters

The VantageScore scale and algorithm calculates different factors, all contributing to the credit score outcome. This ‘credit score’ figure is used by lenders and credit companies to predict the financial risk from each customer and analysis the payment behavior expected from them. The score was developed by the three national credit reporting companies (CRCs) — Experian, TransUnion and Equifax  to standardize the credit ratings.

Another user for this credit score, is the customer himself. A person needs this figure to qualify for mortgages and credit cards and other loans.

The VantageScore has two scales, each developed for a different purpose. The lenders and creditors will continue to request and use the numeric figures, just like the FICO score they request and use today. The main different is that the Vantage scale runes from 501-990, so it is more intuitive to evaluate and calculate.

For example 738 FICO score is a great score, but how much better is it than 690? With the VantageScore Scale these kind of calculations are more easy to be done, and make more sense for people who are not mathematicians.

For the regular average credit customer, these factors and figures even make less sense. For the credit customers VantageScore build the easy to understand credit letter grades. The letter grades resemble the school grades which everyone remembers, thus understanding at each point the credit score situation is easy and appealing.

VantageScore Grades And Their Meanings

The VantageScore has 5 level of grades just like the school grades. On this credit scale, a person gets the personal credit score as if they were still at school. One person may get a ‘D’ score and another person will get a ‘B’ score. Just like at school, these grades are easy to follow and make sense when trying to understand the current credit position.

‘A’ Score Grade – This grade is the best grade you can achieve, like at school A students get the best treatment from the teachers, ‘A’ credit score will allow the customers to shop for the best home loans and best mortgage rates offers. The top tier of credit holders with score between 900-990 pose the least risk thus getting the best financial terms.

‘B’ Score Grade - These customers are at the top 59% of the credit holders with score ranging from 800-899 they will probably be accepted at any office and offered fairly low rates for loans and credit cards.

‘C’ Score Group – This score group will have more challenging times shopping for loans and credit rates, with Vantage Score between 700-799 they are still welcome at most lenders since they drive a high revenue. The customers at ‘C’ group are not in the ‘bad credit – not welcome’ group, they will be qualified for mortgages and will pay higher rates. Lenders fear them but need them since they will likely pay their payments on time (most of the time) and will borrow money at the higher rates than groups ‘A’ and ‘B’.

‘D’ Vantage Score – Means these customers are risky to acquire for the lenders. Lenders can expect credit troubles and delayed payments. In the eyes of the lenders lending money is an uncertain bargain, and they might need more efforts and resources to see the money paid back regularly. A score of 600-699 is very low at the new VantageScore scale, for this reason they will ‘sell’ their money at very high rates to cover losses or expected foreclosures. They will request more documentation and more down payments than other score groups.

‘F’ Score Group – People with Vantage score lower than 600 may see a ‘NOT WELCOME’ sign at many lender’s offices, lending companies are profit oriented, and lending money to ‘F’ group borrowers at current times is beyond their risk management analysis. ‘F’ grade means these people are at the lowest 19% grades from all the millions of U.S customers. If credit or loans are processed a very high interest rate will be attached to compensate for the risk involved.

Vantage Score Scale Conclusion

Most people do not realize how much they would save per year by repairing their credit score. If it is a FICO score or a VantageScore, having a low grade score means paying up to thousands of dollars each year (can reach hundred dollars per month savings!).

Repairing the credit score is easier than most people think and can be done alone with a few simple tweaks. See the following guide to help you through credit repair process in 37 days. For better and more professional results you may want to get the ‘credit repair software’ this is one of the best softwares used for self credit repair, it will pay back itself from day one, once your credit raises.

If your Vantage Score is not ‘A’ you can be a better ‘credit student’ and do something about it, any raise will allow you to negotiate lower rates or even get lower rates without even requesting, moving from ‘B’ group to ‘A’ group is like moving to the VIP lounge of the financial markets, bankers are willing to crawl in order to add a ‘A’ score to their customers list.

You may find these articles relevant too:

1. The NEW VantageScore Explained
2. Your FICO Credit Score Explained
3. How Your Credit Score Affects Your Hard Earned Money
4. How To Delete Negative Items From Your Credit Report
5. How To Rebuild a Low Credit Score

If you have found at least one new piece of information, please consider sharing (+1) below.

Buying Homes With No Money Down 2011

How To Buy A Home With No Down Payment

Buying a home with no money down became a very difficult task the last few years. What once was a great bargain became a quest very few manage to find these days. The lenders stopped offering no money down mortgages, and in order to buy a home with little to non down payment, home buyers need patience and fine search skills.

While the common request of the lenders is to see 20% of the home value payed as down payment, which leaves 80% mortgage the amount they will be willing to lend. With median mortgage of $200,000, 20% makes $40,000 which may be a sum many can not place in advance as down payment.

In some cases with mortgage insurance, less down payment can be achieved. In this short review, you can read on several ways how to purchase a home with little or even no money down payment. The best advice is to further investigate the mortgage plan which you think can be the best for you.

FHA Low Down Mortgages

The first section worth to get to know and further inquire, is the FHA low down payment mortgages. These low down mortgages can be lifesavers if you can meet the FHA Down Payments 2011 requirements.

In the FHA Home Loan program, you can get a mortgage with as little as 3.5% down payment. Yes, it is not the “no money down” mortgage, but 3.5% out of $200,000 means paying $7,000 as advance payment. FHA loans can certainly be at the financial reach of many who can not place the 40K.

VA No Down Loans

For those who have served the nation, the nation knows how to pay back. Through the Department of Veterans Affairs  also known as VA, pure 100% mortgages are given to the veterans and their families. While there are some guidelines which are easy to follow, with the Standard Form 180 you Request Pertaining to Military Record, this will be your first step to a no money down VA loan.

Do not assume that just because you were not on active duty you can not be eligible for these VA home loans, the list of personal eligible for these loans is including even unmarried surviving spouse of a veteran who died.

HUD $100 Down Payment Program

One of the unique no money down loans for 2011 is the $100 down payment for HUD foreclosures. The HUD (Housing and Urban Development) places an incentive for buying HUD foreclosure homes. The deal is quite simple, for a measly $100 down payment you can get a HUD foreclosure home. You have to meet these three guidelines: Live at the place you buy, (this plan is not for investors), Buyer needs to offer the full asking price of the home, and buy the home using an FHA home loan plan.

USDA Rural Housing No Money Down Program

The USDA rural development has it’s interest that population will be living at places other than the towns and cities. For this reason USDA has launched home loan incentives that may help people choose to live at rural areas. The USDA rural development plan includes many benefits except the 100% mortgage financing, there are bad credit flexibility and financing for repair and home improvements included too.

Lease/Purchase No Down Agreements

Another way to buy a home with no or little money down, is to get a lease/purchase contract. This type of home buying is worth some deeper understanding on your part, but the fact is that when lease to purchase contracts are done properly, it allows the buyer to buy a home without any down payment. There are monthly payments and some payments based on the contract which need to be paid, but not the 20% down payment the bank will require.

Federal No Down Payments Programs

These programs are issued as Job-Related by the federal government. From time to time the federal government has specific plans concerning housing and urban development, in which no money down mortgages has proposed to the job sector they are intended for. Police officers may get no money down home loans at neighborhoods which may need public reinforcement. These jobs will be published only at internal job information channels, if you are a federal employed these 2011 no money down plans are worth searching for.

Local State 100% Mortgage Opportunities

In some places the no down payment mortgage will be offered by the state or county. In places where the local county wished to strengthen the community with specific population criteria, they will offer No money down incentives for home purchase in their area. Teachers may get such offers for places where education need demand fresh job positioning. Search local listings in your area to find these offers.

NASA Credit Union 2011 No Money Down Mortgages

One other somewhat strange no money down mortgage is the NASA Credit Union which offers 100% home loans to people who qualify in Maryland, Virginia and Washington, D.C. They have even some lucrative offers for refinance mortgage plans for people who qualify to their terms. What is surprising about this plan is that it is not intended for NASA employees or retired people only, but open to any one who stands their somewhat strict criteria.

House Trading Zero Down Needed

Another unique way can be to trade properties. In this method people can trade off places instead of purchasing them. This can be done for example for summer vacations or trade a large urban area for few smaller locations somewhere else. In permanent house trading, property is changing hands, so with the right deal concerning the appropriate equity and exchange details, you can find deals which will require no down payment to be paid.