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Everyone has heard of a credit report. But many people donít know exactly where to get it, or what to do with it when they have it. What is a credit report? It's basically a track record of your past financial performance. What does it track? It looks at when you've paid your bills, the amount of credit you currently have on your cards, how much debt you owe, etc. In other words, it lets any financial company you apply to know your past behaviour. This helps them determine whether or not to give you a loan, mortgage, or credit card. It also determines what the interest rate will be. Even college loans are chosen based on your credit history. In other words, if you donít have a good financial past, your children might not get into the school they want. So what's a good credit score? Generally, a credit score at seven hundred or above will net you the best interest rates. And you will be able to borrow more money as well. Who tracks it? The three major bureaus are Experian, Equifax, and TransUnion. Which one should you get it from? You can get it from just one. But this might not be the smartest option, because the finance companies look at all three when determining your credit worthiness. If you donít inspect each one, then you risk missing a major mistake. You have two options: you can either go to each credit bureau site separately and get the report, or you can get all three at a third party site. The second option is obviously faster and easier. But how do you use them once you get the reports? The most important thing is to ensure there arenít mistakes. If there are, then you need to dispute them. Often times a financial record will be recorded the wrong way by one of the bureaus. This is actually more common than you might think. Remember, they don't check with each other to verify everything is correct. So not keeping track of this might prevent you from getting the loan or credit card you want. It also helps prevent identity theft. Since you can track all your financial history, it will be easy to see if there are charges you don't recognize. The bottom line: make sure you look carefully on each report to verify everything's correct. This could easily be the difference between getting that loan or not. It will also have a huge effect on the interest rate you pay.

A mortgage is nothing but a loan secured against the property that is your home here; secured means if you are not prompt with your loan payments, the lender has the right to sell your house to take back the amount he has lent to you. A mortgage is nothing but a piece of paper, but the paper is so crucial that any individual see during his financial life. Anyone would prefer to go for a secured mortgage for the home. It is not so tough today as the mortgage is available for any financial requirement, but choosing the right one is essential, and it deserves a bit of knowledge. It's a vast amount required for the mortgage, and to settle this huge amount, you need a long time. The most famous mortgage that is a fixed mortgage available with the option of repayment in 30 years, there is 40 years mortgage, 20 years mortgage and 15 years mortgage open and are famous too. When you purchase a home, you need to reserve your money for insurance taxes in an escrow account, so when you get the mortgage, your payment would be divided into four categories that are called PITI (Principal, Interest, Taxes, and Insurance) The principal is the loan amount balance that gets paid during the years of mortgage you have chosen. Interest is the amount you pay for the loan amount; in amortized loans, the entire repayment of the loan amount goes for the interest in the early years, and in the latter year's repayment goes for the principal loan amount. Taxes are something you owe annually to the government for water treatment, schools, and to the cop on the corner, and at this time, the escrow account helps you to make the payment in monthly installments. Insurance is an essential thing as you canít imagine losing your home for any disaster, and this insurance is being paid by escrow account in 12 installments. Fixed-rate mortgages are static. When you are planning to stay in the same place for a long time, the fixed-rate mortgage is the best as there would be no change in monthly payments for the loan amount you have gone for 15 years or 30 years of a mortgage. In case you have no intention to stay in the same home for long years, you can opt for an Adjustable-rate mortgage that is ARM. This adjustable-rate mortgage has a variable rate of interest, and the payment varies annually or anytime whenever there is a change in the interest rate. If the interest rate goes up, your mortgage payment goes up. Adjustable Rate Mortgages are being called as Interest Rate Risky, unlike fixed-rate mortgages where you are very confident about how much you are making the payment for the principal, interest, taxes, and insurance every month throughout your loan repayment years.

If you have a dream about owning your own home and applying for a mortgage then you may be a bit nervous at the present moment. While having your own home is the American dream the high prices involved can be overwhelming. In addition to this, many lenders will be more concerned with earning a profit than with helping you find a home that matches your income. Below are some steps you can take to properly apply for your first mortgage. Applying for a mortgage used to be simple. People would compare the prices and rates on houses they wanted, and once the found a lender they were comfortable with, they would make a large down payment and then move in. Today things have changed, and going through the number of options available can be very stressful. One thing you should do before shopping for a house is to educate yourself. First Mortgage Application Steps The first thing you will want to do is look at your current income. How much do you make per year? How secure is your job? Remember, if you go about getting a mortgage the traditional way, it could take 15 to 30 years to pay it off, and if you get behind on your payments, you could lose your home and have your credit ruined. If you can't afford a home, it is best not to move into one until you can. This will keep you from taking on debt you can't afford. How Much Can You Afford? If you feel that you can afford a mortgage the next thing you should decide is how much you can afford. Lenders have a tendency to offer you mortgages which are more than you can afford, and this is important to remember. In addition to the cost of the mortgage itself, you will have to pay taxes, insurance and other expenses as well. These costs should be included in your monthly expenses. Apply Directly Or Via A Broker? When you begin looking for a mortgage you will encounter two types of lenders; mortgage brokers and direct lenders. The direct lenders are the people who have the money to lend you. They are ultimately the individuals who decide if you will be approved for a home. The mortgage broker acts as a middleman, going out and finding direct lenders who can give you the best deal. While the lenders may have a limited number of loans available, a mortgage broker will often have access to multiple lenders simultaneously. If you are looking for a specific type of mortgage, a mortgage broker may be better to use than a direct lender. However, a mortgage broker will charge you for their services, and this could be a certain percentage of the mortgage loan you end up with. With the rise of the internet, online mortgage brokers can help you save money. Once you have found a loan through a direct lender or mortgage broker the next step is to fill out an application. There are a number of things you will need to fill out on the application and it will help if you have some supporting documents. You will need to provide information about your income, length of employment, and your assets. They will also want to know what other loans or credit cards you have. Once this information has been provided, the lender will look at your credit report. In addition to this, they will want to see your bank statements and check stubs from your job. You may also need to show them tax information and data about your insurance. If your credit is good, an appraiser will be hired to make sure the house is valued at the loan amount that will be given to you.