Blog — Page 746 of 848 — First Rate Financial Group

11

Aug

Home Mortgage Tips

Will Missing Mortgage Payments Impact My FICO Score? Yes – and Here’s How

Will Missing Mortgage Payments Impact My FICO Score Yes and Heres How If you’re like most homeowners, you probably believe that one missed mortgage payment won’t have a noticeable impact on your FICO score. People get behind now and then, and besides, you’ve been faithfully making payments on time for years. How bad could it be?

In truth, even one missed mortgage payment could seriously damage your FICO score. Lenders can report missed monthly payments whenever they choose – they don’t need to wait until a certain date to do it. That means even if your mortgage payment is a few days late, your lender may report it as unpaid.

So what exactly happens to a FICO score when you miss a mortgage payment? Here’s what you need to know.

Payment History: The Single Largest Factor In Determining Your Credit Score

FICO scores are calculated based on several different criteria, the largest of them being your payment history. A full 35% of your credit score is determined by how often you pay your bills on time and in full. And although FICO says that one or two late payments aren’t going to decimate your credit score, they will shave off some points that could have made the difference between a low-risk and high-risk interest rate.

Consumers With Higher Scores Have More To Lose

A 2011 FICO study analyzed the impact of late mortgage payments on consumer credit scores. The study grouped consumers into three groups based on their starting FICO score, with Consumer A having a score of 680, Consumer B a score of 720, and Consumer C a score of 780. The findings?

Even if you have a credit score of 780, being just 30 days late on a mortgage payment can result in a 100-point drop. And it can take up to three years to earn that credit back. In contrast, a consumer with a score of 680 who is 30 days late will see only a 70 point drop and can recover their original score within 9 months.

The takeaway? Contrary to popular belief, people with high credit scores stand to lose more from a missed payment than people with low credit scores.

There Are Varying Degrees Of “Late”

One common misconception is that if you miss a mortgage payment, it doesn’t matter if it’s 30, 60, or 90 days overdue. The mainstream thinking is that late is late is late. But that’s not how FICO sees it.

Although borrowers with credit scores under 700 won’t see much of a decline after 30 days late, borrowers with a higher credit score will. If you have a credit score of 720 and you’re 30 days late on your mortgage, your score will fall to about 640. If you’re 90 days late, that score will fall again this time, to about 620.

That means if you miss a mortgage payment, you need to get in touch with your lender as soon as possible in order make repayment arrangements and hope they haven’t yet reported the overdue payment. It’s your best shot at protecting your FICO score.

Credit scores can be vulnerable to all sorts of factors, which is why if you’re looking into mortgages, you’ll want to consult an expert. A qualified mortgage professional can help you find a mortgage you can afford, so your credit will stay intact. Contact your local mortgage expert to learn more.

10

Aug

By support

Market Outlook

What’s Ahead For Mortgage Rates This Week – August 10, 2015

Whats Ahead For Mortgage Rates This Week August 10 2015 This week’s scheduled economic news includes reports on construction spending, a survey of senior loan officers, and reports on labor markets including ADP private sector jobs, the federal government’s reports on non-farm payrolls, core inflation and the national unemployment rate.

Construction Spending Slows, Loan Officers Survey Suggests Growing Confidence

Construction spending fell in June after the May reading was revised upward to 1.89 percent from the original reading of 0.90 percent. Spending for residential construction rose by 0.40 percent, while non-residential construction spending remained flat. The seasonally-adjusted annual outlay for construction was $1.06 billion in June.

Analysts continue to note a trend toward construction of smaller residential units including condominiums and apartments, with an emphasis on rental properties. This supports reports that would-be homebuyers are taking a wait-and-see stance to see how factors including rising home prices, fluctuating mortgage rates and labor market conditions perform.

According to a survey of senior loan officers conducted by the Federal Reserve, mortgage lenders reported that mortgage applications increased during the second quarter and indicating that financial constraints on consumers may be easing. According to the survey of 71 domestic banks and 23 foreign-owned banks, 44 percent of respondents reported moderate increases in loan applications, while only 5 percent of survey participants reported fewer loan applications.

Some banks surveyed reported easing mortgage approval standards, but fewer lenders eased standards than in the first quarter. Further supporting growing confidence among lenders, the Fed survey also reported that large banks were easing consumer credit standards for auto loans and credit cards.

Mortgage Rates Fall, Jobless Claims Rise

Freddie Mac reported that average mortgage rates fell across the board last week with the average rate for a 30-year fixed rate mortgage lower by seven basis points to 3.91 percent; the average rate for a 15-year fixed rate mortgage fell by four basis points to 3.13 percent, and the average rate for a 5/1 adjustable rate mortgage was unchanged at 2.95 percent. Discount points for all loan types were unchanged at 0.60 percent for 30 and 15-year fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Weekly jobless claims rose from the prior week’s reading of 268,000 new claims to 270,000 new claims, which matched analysts’ expectations. In other labor-related news, the government reported a national unemployment rate of 5.30 percent in July; this was unchanged from June’s reading.

The ADP employment report for July showed fewer jobs were available in the private sector. June’s reading showed that private sector jobs grew by 229,000 jobs; July’s reading fell to 185,000 private sector jobs. According to July’s Non-farm Payrolls report, 215,000 new jobs were added in July as compared to expectations of 220,000 jobs added and June’s reading of 231,000 new jobs added.

The Federal Reserve’s Federal Open Market Committee (FOMC) is closely monitoring job growth and inflation rates as it contemplates raising the target federal funds rate. Core inflation grew by 0.10 percent in June; which was consistent with May’s reading and expectations. The FOMC recently cited the committee’s concerns about labor markets and lagging inflation. The Fed has set an annual growth rate of 1.65 percent for inflation for the medium term; this benchmark is part of what the Fed will consider in any decision to raise rates.

What’s Ahead

This week’s scheduled economic reports include reports on retail sales and consumer sentiment in addition to usual weekly reports on mortgage rates and new jobless claims.

07

Aug

By support

Around The Home

Tiny, but Cozy: 3 Ways to Furnish Small Spaces to Make Them Feel Much Larger

Tiny, but Cozy: 3 Ways to Furnish Small Spaces to Make Them Feel Much Larger When decorating a small space, there is a general desire to make the space look and feel larger than it is while also meeting basic functional needs in the room. For example, there may be a need to accommodate seating for a number of people in a living room, but there also may be a desire to provide ample space for foot traffic so the area does not feel cramped. By following a few important tips, it is possible to furnish smaller spaces so that they are functional and do not feel cramped.

Think About Decorative Storage Solutions

One of the most common factors that will make a small space seem cramped and uncomfortable relates to clutter, and because of this, focusing on storage solutions can go a long way toward making the space feel larger than it is. Storage solutions can be decorative, and they can be a true benefit to the décor in the room. Think about functional storage features like an ottoman with hidden storage features, an entertainment center with cabinets and shelves or a tall bookshelf that can hold many of the items that are needed in the room.

Decorate The Space Vertically

For most people, there is a general inclination to decorate a room horizontally and to fill the floor space with furnishings, but this can be detrimental when decorating a smaller room. In a smaller space, decorating the space vertically by using bookshelves, storage cabinets and other features that rise above the ground rather than that sprawl across the ground can be beneficial. The goal should be to decorate the room fully while leaving ample space for foot traffic to maneuver through the room comfortably.

Use Lighter Colors

Darker colors used in a smaller room can make the space feel closed off and cramped. Using lighter colors can brighten the space and make it seem more airy. While using shades of white and beige throughout a space may not be ideal in all rooms, these can be incorporated into various aspects of the décor to improve the spacious feel of the room.

Smaller spaces can be challenging to decorating, but there are different tricks and tips that can be used to make the space look and feel larger than it is. Some tips may improve the functional use of the space, and others may simply play tricks on the way to create the illusion of space. All can be used together to create the feeling of a larger, more inviting room.