It's virtually impossible to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

• Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.

• The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

• Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.

• Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

• It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.

The information in your credit report has a huge impact on whether or not you qualify for a mortgage loan and what interest rate a lender will offer. Therefore, it’s important your credit report reflects a positive image of the way you manage your money. If you're getting ready to buy a home, checking your credit report is the best way to ensure you get the loan and interest rate you deserve.

The easiest way to see what’s in your credit report is to contact the three national credit reporting agencies  Equifax www.equifax.com, Experian www.experian.com and TransUnion www.transunion.com - and request a copy from each. That’s because the three agencies are independent of each other and the information may differ on all three reports. In addition, you may not know which agency your lender will use to check your credit, so it’s best to verify that all three have correct information about your credit history.

If you've been denied credit, insurance, or employment because of information in your credit report from any of the three agencies, you can obtain a free credit report by contacting the agency within 60 days of receiving a denial notice. In addition, you're entitled to a free copy of your report each year when you certify in writing that (1) you're unemployed and looking for a job within 60 days, (2) you're currently on welfare, or (3) your report contains errors due to fraud. Otherwise, the agencies charge a fee for a copy of your report.

For additional fees, each agency may offer you different report variations, such as:

• A credit report with or without your credit score.

• A three-in-one credit report that lets you see a side-by-side comparison of records, from all three agencies, with or without scores.

• Notification services when your credit history is requested.

• Routine notification changes to your file.

• Subscriptions that allow you to access your report on a regular basis.

• New law promotes free access to credit reports left

Soon you'll be able to get your credit report for free regardless of your employment or financial situation. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each agency provide you with a free copy of your credit report, at your request, once every year, from www.annualcreditreport.com.

Free reports will be phased in during a nine-month period, rolling from the West Coast to the East beginning December 1, 2004. By September 1, 2005, free reports will be accessible to all consumers.

Here is a breakdown of eligibility for a free credit report:

• Beginning December 1, 2004 - Consumers in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming
• Beginning March 1, 2005 - Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin
• Beginning June 1, 2005 - Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas
• Beginning September 1, 2005 - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia – the District of Columbia, Puerto Rico, and all U.S. territories.
• Whether you are thinking of buying a home or simply curious about what’s in your credit report, it’s important to correct any errors you discover as soon as possible. You don’t want errors in your credit report affecting your eligibility for credit in the future.

How do you "buy" a better rate?

Do you plan on keeping your loan for a while? Then it may make sense to "buy" a lower interest rate by paying one or more "points."

Even if you're unsure of how long you plan to keep your mortgage before you move or refinance, paying points now for a lower rate may make sense. For example, do you have a high-paying job now but you think you might change careers in the next few years? We can help you sort it out. It's part of our goal to find you the right loan for your means and future.

A point -- which equals one percent (1%) of the total loan amount -- is an up-front fee that lowers your annual interest rate and total interest due over the life of your loan. So, a one point loan will have a lower interest rate than a no point loan. Basically, when you pay points you trade off paying money later in favor of paying money now. You can pay fractions of points, meaning there are a lot of points packages that can make a loan's terms more favorable if that's what's right for you.

There are a variety of rate and point combinations available. When you look at different loan programs, don't look just at the rate -- compare the whole package. Federal law requires lenders to publish their loans' Annual Percentage Rate, or A.P.R. The A.P.R. is a tool used to compare different terms, offered rates, and points.

Which Refinancing Loan Program is Best for You?

Even though it seems like it sometimes, there are not as many loan options as there are applicants! We can guide you to choose the loan program that will fit your needs the best. Call us at (386) 246-3720 to get things started. There are some general questions to ask yourself while you review the choices.

Reducing Your Monthly Payments
Are you refinancing primarily to lower your rate and monthly payments? Then a low, fixed rate loan may be the right choice for you. An ARM (Adjustable Rate Mortgage) or a fixed mortgage with a high rate are loan programs that you might want to refinance. Different that the ARM, your low fixed-rate mortgage will stay at a certain low rate for the term of the mortgage, even if interest rates rise. If you plan to live in your home for about five more years, a loan with a fixed rate may be an especially good fit for you. But if you do plan to sell your home more quickly, you should consider an ARM with a low initial rate in order to achieve lower mortgage payments.

Getting Out some Cash
Is your refinance goal primarily to pull out some of your home equity for an infusion of cash? Maybe you need to make home improvements, take care of your college kid's tuition, or take your dream vacation. In this case, you want to get a loan above the remaining balance on your present mortgage loan.Then you will want You might not have an increase in your monthly payment, though, if you've had your existing loan for a while, and/or your interest rate is high.

Debt Consolidation
Do you have other debt, perhaps with higher interest, that you want to consolidate? If you have any higher interest debts (such as credit cards or vehicle loans), you may be able to take care of that debt with a lower rate loan with your refinance, if you have the right amount of home equity.

Getting a Shorter Term Loan
Are you dreaming of paying your loan off more quickly, while beefing up your equity faster? You should consider refinancing with a shorter term loan, often a 15-year mortgage. Your monthly payments will probably be more than they were with your long-term mortgage loan, but in exchange, you will pay substantially less interest and will build up equity more quickly. But, you may be able to make the change without a higher monthly mortgage payment if your longer term mortgage was closed a while ago, and the balance remaining is low. You could even pay less! To help you determine your options and the numerous benefits in refinancing, please contact us at (386) 246-3720. We will help you reach your goals!

Want to know more about refinancing? Call us at (386) 246-3720.

Weighing the Options of Refinancing

Some have said that only if your new interest is at least two points below your current rate, should you refinance your loan. That might have been sound advice a while back, but with refinancing dropping in cost recently, it's a good time to consider a new mortgage! A refinanced loan is often worth its cost several times over, because of the advantages that can come, as well as a lower interest rate.

Advantages
You could be able to bring down your interest rate (sometimes substantially) and have smaller monthly payments with a refinanced mortgage. Additionally, you might have the option of pulling out some of your home equity by "cashing out" some money to fix up your home, consolidate debt, or take your family on a vacation. With reduced interest rates, you may also get the chance to build your home equity more quickly by changing to a shorter-term mortgage.

Fees and Expenses
All these benefits do cost something, though. With your refinance, you're paying for many of the same things you paid for during your original mortgage. Included in the list might be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other expenses.

Do the Math
You might need to pay discount points (prepaid interest) to gain a more favorable rate of interest. If you pay (on average) 3% of the loan amount at the start, the savings for the life of the refinanced mortgage can be significant. Please consult with a tax professional before acting on advice that these points paid may be deducted on your federal income taxes.

An additional cost that a borrower may consider is that a reduced interest rate will lower the interest amount you'll be able to deduct on your federal income taxes. Call us at (386) 246-3720 to help you do the math.

Most people find that the monthly savings balance out the initial cost of a refinance. We will help you figure out what program is right for you, considering your cash on hand, how likely you are to sell your residence in the near future, and how refinancing may effect your taxes. Call us at (386) 246-3720 to get you started.

Want to know more about refinancing? Give us a call at (386) 246-3720.
Linda M. Niday - NMLS #326693

Closing Costs for Residential Real Estate Transactions

"Closing Costs" are the fees that pay for the various services involved when you sell or buy a home. Sellers and buyers usually negotiate to decide how to split these closing costs.

As you'll see below, many of the buyer's closing costs cover the costs of getting the mortgage loan. At Pillar Mortgage, we have extensive experience in mortgage lending, so we can compile a comprehensive list of mortgage-related costs in your "Good Faith Estimate".

Good Faith Estimates (GFEs)

Soon after you apply for a loan, we'll provide you with the "Good Faith Estimate" of your closing costs. This cost estimate comes out of the loan officer's past experience. It's important to note that while our GFEs are very precise, we can't always predict costs to the penny. We answer questions about closing costs every day at Pillar Mortgage, so please feel free to contact us if you have questions.

We've provided a general list of closing costs below, but we'll provide you a specific list of closing costs, with amounts, very soon after you complete your application. At Pillar Mortgage, we don't believe in surprises, so if your costs change, we'll be sure to let you know immediately.

Standard Closing Costs/Loan-Related Costs

• Points -  A fee paid to lower your mortgage interest rate (optional)

• Appraisal Fee

• Obtaining Your Credit Report

• Interest Payment

• Escrow Fees

• Taxes

• Loan Origination Fee

• Property Taxes

• Recording Fees and Transfer Taxes

• Insurance

• Homeowners Insurance

• Title Insurance

• Flood or Quake Insurance

• Private Mortgage Insurance (PMI)

Pillar Mortgage can help you understand closing costs. Call us: (386) 246-3720.

Linda M. Niday - NMLS #326693

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Account
At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.