Did you know that your credit score could drop if you close out unused credit cards. The credit bureaus figure out how much you owe and how much available credit you have. The more you owe the lower your score will be.
For example you have a Visa card that you do not use. It has a $25,000 limit. With all your credit card bills, mortgage, car bills you owe a total of $ 193,625 You have a home equity line and other credit cards that are not up to their limit. You have available credit of 280,000.
The credit bureau looks at 193,625/280,000. You have $86,375 in available credit
If you closed your home equity line and a credit card you now have 193,625 in debt and only 200,00 total credit.
The credit bureau can see you are about maxed out. They lower your credit score because you are a bigger risk.
Sometimes older people have tremendous credit scores because their mortgage is about paid off, they have credit cards but not much is on them. And they have a long history. They have a large amount of available credit so their score is higher.
For more on Michigan real estate, mortgages, credit and credit scoring feel free to go to my website www.russravary.com
Showing posts with label better credit. Show all posts
Showing posts with label better credit. Show all posts
Monday, January 14, 2008
Friday, January 4, 2008
Changing Mortgage market
Changing Mortgage market
Everybody knows that the mortgage market is changing, but here is a little update. Most of the banks are now doing even higher "hits" to high loan to value (LTV) loans based on credit scores. Loan to value means how much you owe compared to how much the house is worth. For example if you owe $160,000 and the house is worth $200,000 then your Loan to value (LTV) is 80%. Normally the banks give hits for anything over 80%. The higher the loan the higher the "hit" "Hits" are something most borrowers never even know about, but that is figured into how your rate is determined.
What is new in the last few months is that the lower your credit score the higher the hit. It can affect your rate up to 3/8 of a percent. Now the mortgage market is truly making a difference between good, better, and best credit scores. So it is more important than even for borrowers and consumers to keep on top of their credit.
For more information on mortgages go to my website http://www.russravary.com/ You can search for Novi real estate or Plymouth real estate for free. Or search for any Southeastern Michigan homes for sale without giving any information.
Everybody knows that the mortgage market is changing, but here is a little update. Most of the banks are now doing even higher "hits" to high loan to value (LTV) loans based on credit scores. Loan to value means how much you owe compared to how much the house is worth. For example if you owe $160,000 and the house is worth $200,000 then your Loan to value (LTV) is 80%. Normally the banks give hits for anything over 80%. The higher the loan the higher the "hit" "Hits" are something most borrowers never even know about, but that is figured into how your rate is determined.
What is new in the last few months is that the lower your credit score the higher the hit. It can affect your rate up to 3/8 of a percent. Now the mortgage market is truly making a difference between good, better, and best credit scores. So it is more important than even for borrowers and consumers to keep on top of their credit.
For more information on mortgages go to my website http://www.russravary.com/ You can search for Novi real estate or Plymouth real estate for free. Or search for any Southeastern Michigan homes for sale without giving any information.
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