Category Archives: Finance

“Credit Inquires” Not All Created Equal

“Credit Inquires” Not All Created Equal

A “credit inquiry” is a formal request to review a person’s credit report and stays on ones credit report for 120 days after it was pulled.  A person’s credit score is comprised of five different components, with “new credit” being one of the smallest variables.  New credit accounts for only 10% of a person’s overall credit score.  Searching for new credit is relevant to your credit score because when you make a credit inquiry, it’s a specific request to increase your level of indebtedness. The reasoning behind why inquiries are viewed negatively is that the possibility of taking on additional levels of debt increases the probability of a default.  For each new credit inquiry, it increases the probability that you’re taking on larger amounts of debt, which makes it less likely that you’ll make good on your payments to your creditors. Read the rest of this entry

How to Protect Your High Credit Score

How to Protect Your High Credit Score

So, you’re ready to start shopping for a mortgage, and your lender wants to “pull your credit”.  You’re worried it will harm your coveted credit score.  Today, the credit bureaus clearly address this concern and state that your score will not continually drop when mortgage lenders pulls your credit; that is, if it’s done correctly.  Read the rest of this entry

Rising Interest Rates

Rising Interest Rates

There has been a lot of talk about the most recent rising interest rate trend and the effect that can have on the economy as a whole.  When you hear the term “interest rates,” typically it means the federal funds rate.  The federal funds rate is the rate that banks charge each other to borrow money from one another.  When the interest rate is raised, it makes borrowing money more expensive, which affects how consumers and businesses spend.  This is how the Federal Reserve (“the Fed”) attempts to control inflation through its monetary policies.     Read the rest of this entry

New Qualified Mortgage Rules

New Qualified Mortgage Rules

On January 10th 2014 mortgage rules changed in a big way due to the Dodd Frank Wall Street Reform and Consumer Protection Act going into effect.  This act affects both homeowners who want to refinance, as well as anyone looking to purchase a home.   While there are several new rules being implemented, there is one that will by far have the biggest impact on consumers.     Read the rest of this entry

Mortgage Approval Pitfalls

Mortgage Approval Pitfalls

Congratulations!  You’re pre-approved for a mortgage and ready to find the home of your dreams.  You have nothing to worry about since you have that pre-approval letter in your hand, right?  Not exactly!  This is a common misconception when it comes to the mortgage approval process.  Let me discuss some pitfalls to avoid that will make your life a lot easier to get to the closing table.  Read the rest of this entry