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Be Proactive with Your Adjustable Rate Mortgage
by: Stuart Schmal
There sure is a lot of doom and gloom in the media about the pending mortgage market. In the next 18 months there will be 5 million adjustable rate mortgages slated to reset to higher rates according to Lehman Brothers. Lender guidelines have tightened up in the past 6 months. It is not as easy to get a mortgage today as it was when you took out your adjustable rate mortgage. And on top of that, rates are higher now. What I have not seen in the media, are ideas to help the consumer.
If you have an adjustable rate mortgage mortgage, you need to be proactive and start planning NOW!
Take out your loan documents and take a look at them. Do you have an adjustable rate mortgage? When does it reset? You need to know the answers to these questions.
The important things a lender looks at are your credit history, income and reserves. Here are some things you need to look at now. Don't wait until your adjustable rate mortgage is ready to reset.
The first step is to take a look at your credit report. Are there any incorrect entries? If so, you need to get them fixed now! Also, what is your score? Is it under 720? Then you need to start working on getting it higher now! You should have a real estate mortgage professional take a look at it and see what you can do to raise your score. In addition, you need to start monitoring your report going forward. If your mortgage is not going to reset for 18 months, you should look at it every 6 months so that you can catch any mistakes. If any incorrect information gets placed on your report, it can take time to remove.
It's important to pay all your bills on time, especially your mortgage. These are credit killers!
Do not make any big purchases. Don't buy a car, a boat, furniture or anything on installment. This could lower your credit score and/or add to your debt ratio making it harder to qualify.
What does your debt structure look like? Do you have a lot of credit card balances? Paying these down to certain levels can increase your credit score. Also, a lower minimum monthly payment will make it easier to qualify for a new loan.
How stable is your job? Lenders like job stability. Will you have your job from now until your adjustable rate mortgage resets? Are you looking for a new job? If it's in the same line of work it shouldn't be a problem. But you shouldn't leave a salary job at this time and start your own business. Maybe you need to get a second job or a have a spouse get a job to qualify.
Lenders are looking for cash reserves. It's good to have a few months of your mortgage payment in the bank. You might need to cut back on your spending so that you can increase your bank account or use that money to pay down some debts.
My advice would be to contact a qualified mortgage professional to take a look at your situation now. They can go over your credit history, income and reserves with you and come up with a plan of action. Find solutions now, so that when the time come for your adjustable rate mortgage to reset you are ready.
Stuart Schmal is a Mortgage Planner in Long Beach, California.
You can find out more about his mortgage planning practice at www.WatchMyMortgage.com
by: Stuart Schmal
If you have an adjustable rate mortgage mortgage, you need to be proactive and start planning NOW!
Take out your loan documents and take a look at them. Do you have an adjustable rate mortgage? When does it reset? You need to know the answers to these questions.
The important things a lender looks at are your credit history, income and reserves. Here are some things you need to look at now. Don't wait until your adjustable rate mortgage is ready to reset.
The first step is to take a look at your credit report. Are there any incorrect entries? If so, you need to get them fixed now! Also, what is your score? Is it under 720? Then you need to start working on getting it higher now! You should have a real estate mortgage professional take a look at it and see what you can do to raise your score. In addition, you need to start monitoring your report going forward. If your mortgage is not going to reset for 18 months, you should look at it every 6 months so that you can catch any mistakes. If any incorrect information gets placed on your report, it can take time to remove.
It's important to pay all your bills on time, especially your mortgage. These are credit killers!
Do not make any big purchases. Don't buy a car, a boat, furniture or anything on installment. This could lower your credit score and/or add to your debt ratio making it harder to qualify.
What does your debt structure look like? Do you have a lot of credit card balances? Paying these down to certain levels can increase your credit score. Also, a lower minimum monthly payment will make it easier to qualify for a new loan.
How stable is your job? Lenders like job stability. Will you have your job from now until your adjustable rate mortgage resets? Are you looking for a new job? If it's in the same line of work it shouldn't be a problem. But you shouldn't leave a salary job at this time and start your own business. Maybe you need to get a second job or a have a spouse get a job to qualify.
Lenders are looking for cash reserves. It's good to have a few months of your mortgage payment in the bank. You might need to cut back on your spending so that you can increase your bank account or use that money to pay down some debts.
My advice would be to contact a qualified mortgage professional to take a look at your situation now. They can go over your credit history, income and reserves with you and come up with a plan of action. Find solutions now, so that when the time come for your adjustable rate mortgage to reset you are ready.
Stuart Schmal is a Mortgage Planner in Long Beach, California.
You can find out more about his mortgage planning practice at www.WatchMyMortgage.com
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If you are a Real Estate Professional and would like to become part of our 'Service Directory', Please use the 'contact' link or send a request to my activerain profile. You are encouraged to include original content about your services, Business information and links back to your site along with any submission. Thank you.
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