Credit Tips

Different loan arrangements work for different people, however three specific strategies that may work for one person may be wrong for everyone else. Three such mortgages include land contracts, roll over loans, and 40-year mortgages.

It’s hard to think of a less appealing idea than the land contract. In this sort of arrangement the borrowers have debt without title.

The downfall of the land contract is that a borrower makes payments on a loan but ownership is not transferred over until a specified amount has been paid. Since ownership has not changed over a buyer has only an equitable interest in the home. Also if the borrower misses even a single payment, they can lose the property, including the down payment, monthly principal reductions and all accumulated equity because the title is still legally in the name of the lender.

You might be thinking,” Shouldn’t they be interviewing me?” There are three reasons you need to interview possible credit lenders.

The main reason is to avoid unnecessary credit inquiries. The next is to pre-determine their credit guidelines before filling out an application. The last important reason to interview your lender prior to applying is to evaluate all your options before you make a purchase decision. Always use the telephone when interviewing lenders first. Only take the time and effort to visit a lender if you are sure they are willing to help.

Every time you give someone permission to look at your credit report it is recorded for everyone to see for the next two years. This act is called a credit inquiry. Too many credit inquiries have been known to be the cause of denial for many people. Credit lenders get nervous when they see too many of them.

If you think you are going to have trouble making your mortgage payment this month or in the near future, you have multiple options available to help you get back on track. This can mean selling, refinancing, or choosing to work out a deal with your lender. The last thing you want is for your lender to foreclose on your property.

First you should contact your lender directly. Lenders can often defer or waive late fees, accept interest only payments, or temporarily reduce or suspend payments. Most lenders are willing to help you as long as you are willing to help yourself. A long, expensive foreclosure is the last thing a lender wants to deal with.