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Hampton
Funding Group provides two easy ways to apply for a loan. All methods
are completely secure, are free of cost and risk, and totally confidential.
Refer to our Mortgage Glossary to better understand some commonly
used mortgage terminology.
Mortgage
expenses for processing your loan vary. You need to consider the
closing expenses associated with your loan.
There
are many important things to consider when purchasing a home, especially
if you're a first time buyer. Here's some information that can keep
you on track.
Hampton Funding Group believes in building relationships, not just
selling you a loan. Use this convenient mortgage calculator to estimate
your monthly payments.
Our
Refinance Calculator can help you decide whether or not you should
refinance your current mortgage at a lower rate.
Is using a mortgage broker the right choice? What advantages can
I gain by using a mortgage broker?
Home
loans come in many shapes and sizes. Deciding which loan makes the
most sense for your financial situation and goals means understanding
the benefits of each.
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What
is Credit Scoring?
Credit scoring is a quick, accurate and consistent scientific
method for assessing credit risk. Your credit scores are
based on data stored by a credit repository about your credit
history and payment patterns. Statistical models that assign
points to factors indicative of repayment caculate credit
scores. These scoring models exist in software utilized
by credit bureaus or lenders.
Credit
scores are based on data rather than human judgment, making
credit scoring an objective risk assessment tool as opposed
to a subjective, possibly discriminatory, human interpretation
of information.
Even
the best underwriter cannot match scoring's statistical
ability to weigh and measure hundreds of factors and reach
a number indicating relative credit risk in a matter of
seconds.
The
resulting score is a "snapshot." It sums up what
your past payment performance and current usage of credit
say about your level of credit risk to the lender. Because
this score is a composite fo all the applicant's credit
information, NO single factor like a late payment or even
a bankruptcy will be the sole cause of an unacceptable credit
score.
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What
Data Is A Repository Scoring Model Based On?
 Scoring
models DO
NOT consider:
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Race,
gender, religion, marital status, income, nationality,
neighborhood, employment history, position or title,
sexual preference, or interest rate being charged
on a particular card. |
Scoring
models DO
Include:
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NOT
just the negative credit information such as late
payments and bankruptcies, but all the credit information
stored in the repository's credit file on you at
the time of the request. |
 Past
Payment Performance
(35%
of the credit score's weight)
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The
fewer late payments, judgements, liens or collections,
the better. Zero negative entries on your report
usually indicate a lower risk.
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Recent
late payments are more indicative of future default
by you than those that occurred more than 24 months
ago.
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A
30-day late payment by you today will have a greater
impact on your score than a bankruptcy five years
ago with clean credit since. |
Credit
Utilization
(30%
of the credit score's weight)
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Low
balances on several credit cards are better than
high balances on a few cards. Balances on your cards
should be kept at or below 30% of the available
maximum credit limit.
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Too
many credit cards can be detrimental.
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WARNING:
Do not close any of your accounts without first
discussing your complete credit profile with your
mortgage professional. Your score could go down!
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Credit
History
(15%
of the credit score's weight)
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The
longer accounts have been opened and in good standing,
the lower the risk indications are about you.
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Opening
new accounts and closing your seasoned accounts
will negatively impact your score. Avoid "credit
surfing."
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Established
credit history is relative to your past payment
performance and how high or low your credit usage
may be. Self discipline in utilizing credit shows
lower risk.
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A
short credit history does not automatically indicate
that you are a high credit risk, as long as you
are not a heavy user of credit and your payments
have been made on time. Keep your balances on cards
LOW! To get a score, you should have one account
that has been opened for at least six months.
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Types
of Credit in Use
(10%
of the credit score's weight)
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Finance
company accounts will score lower than accounts
you secure through banks or department stores. If
the predominance of your accounts are with finance
companies only, it may appear you cannot qualify
for a better type of credit.
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"90
days same as cash" and deferred payments generally
are funded by finance companies, so this variable
is a weak indicator for the average consumer. |
Inquiries
on Your Report
(10%
of the credit score's weight)
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Looking
for new credit can indicate higher risk if several
credit cards are applied for in a short period of
time and your existing cards have been charged to
their maximum limits.
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Multiple
inquiries, regardless of the number, for mortgages
or autos, in a 14-day period of time only count
as a single inquiry in their impact on your score.
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Additionally,
any mortgage or auto inquiry made about your credit
file within 30 days of the current lender's inquiry,
will not impact your score due to buffers within
the credit scoring models.
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Promotional
or administrative inquiries shown on your credit
report DO NOT adversely impact your score.
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Only
the first seven inquiries made by different trade
lines shown on your credit report will actually
be factored into the impact on your score.
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ONLY
INQUIRIES AUTHORIZED BY YOU FOR THE PURPOSE OF BEING
GRANTED NEW CREDIT LINES WILL IMPACT YOUR SCORE. |
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 How
to Improve Your Credit
Profile and Score.
There
is no magic to improving your credit score.
Credit scores automatically improve as your
credit profile gets better. Improving your
credit profile is not always a quick fix,
however. Here are a few things to remember.
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Pay
down all your credit card balances to below
30% of the available credit balance.
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Do
not consolidate accounts on to one or two
cards and close other accounts. Low balances
on a few cards are better than high blances
on the one or two credit cards you still have
left open. Consolidation of your balances
will artificially skew the appearance of your
credit utilization.
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Keep
the number of credit cards you own to a conservative
number, but don't close accounts without the
advice of a knowledgeable mortgage broker.
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Review your credit report
for accuracy at least 90 days before you intend
to apply for a mortgage. Have any innaccurate
information on your report corrected at the
repository that is reporting the erroneous
information on your report.
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Understand
that paying off a collection account or judgment,
for example, will not eliminate it from your
credit profile. Paid or satisfied negative
credit items will show a zero balance, but
will not disappear from your credit profile
for seven years - they still reflect a late
or a collection account even if you paid it
off. |
How
Does Credit Scoring Help
You?
Credit
scoring is not a crystal ball, but it helps
lenders make more informed decisions and offers
real benefits to the consumer.
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Credit
scoring evaluates all applicants by the same
criteria. Opinions do not enter the scoring
equation.
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Do
not consolidate accounts on to one or two
cards and close other accounts. Low balances
on a few cards are better than high blances
on the one or two credit cards you still have
left open. Consolidation of your balances
will artificially skew the appearance of your
credit utilization.
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Changes
in your credit performance will change your
credit score. While "scoring scales"
remain constant, your place on the scale will
change as your individual credit patterns
change.
Scoring speeds up credit decisions. Scores
help lenders make decisions more rapidly,
and often with less documentation.
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Scoring
helps make more credit available to the borrowing
public. With more credit available, the cost
of credit to you decreases. |
How
Do You Correct An Error
on Your Credit Report?
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Ask for a Credit Dispute form from
your mortgage broker.
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Complete
one form for each inaccurate piece of information
on your credit report. Attach any documents
you might have to support your claim. Be sure
to print your name, address, phone number
and social security number on the form. Sign
and date the form.
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Mail
the form to the reporting repository with
a return receipt requested.
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Per the Fair Credit Reporting Act,
the repository has five days to notify the
specific trade line of the dispute. Within
30 days, the trade line must complete its
investigation of the item and report back
to the repository with its findings and the
need for modification or deletion, if applicable.
If there is no response from the trade line,
the repository must remove the item from your
credit file. If a change is made to the consumer's
credit file, the repository must notify the
consumer in writing within five days.
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After
notification by the repository of the correction
or change, a new credit report may be run
to get a new score for underwriting purposes.
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You
can receive a credit report from each of the
three repositories for approximately $8.00
each or for free if your request one within
60 days of being declined for credit reasons.
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Ask
your mortgage broker about the rapid re-score
resolution process if you have inaccuracies
on your credit report. |
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