Credit & Financial Strategy - The Mortgage Porter

Credit and Financial Strategy

Your mortgage approval doesn’t start with a rate — it starts with your credit profile and financial structure.

In this section, you’ll find educational articles on:

Credit scores and reporting
Debt-to-income ratios
Mortgage insurance
Bankruptcy recovery
Financial planning considerations
Long-term homeownership strategy

Understanding how lenders evaluate credit and income allows you to prepare strategically rather than reactively.

My goal is to help you improve your financial scenario — whether that means preparing to buy, restructuring debt, or planning your next move.

Questions? Let's talk!

Improving Your Credit Score

March 27, 2008 by Rhonda Porter 2 Comments

With every point of your credit score being more crucial than ever, I thought it would be a good time to share some tips on how to improve your credit scores beyond paying your bills on time. If you are considering obtaining a mortgage within the next 12 months, you should meet with your Mortgage Professional to help advise you on this process. Some steps in repairing your credit may actually temporarily lower your scores (such as paying off a collection). What steps you should take depends on how soon you plan on buying a home or refinancing.

[Read more…]

Filed Under: Credit & Financial Strategy Tagged With: credit, credit scores

Home Equity Loans Offer Protection from Financial Uncertainty

January 8, 2008 by Rhonda Porter 3 Comments

While on vacation last week, I took advantage of being “unplugged” and read the Seattle Times. On the last Sunday of 2007, they featured an article on How You Can Ride Out a Recession by Teresa Dixon Murray. Teresa offers 17 easy suggestions on how to protect yourself during uncertain economic times with her top tip being:

1. If you own a house, get a home-equity line today.

It won’t cost you money unless you use the credit line. But this way, you will have access to money if you lose your job or hit an emergency. If you wait until you’ve been laid off to apply for the credit line, “good luck trying to get a loan if you’re unemployed,” said Les Szarka, president of Szarka Financial Management in North Olmsted, Ohio.

Bankruptcy and Your Home

November 9, 2007 by Rhonda Porter 3 Comments

I have been in the mortgage side of the real estate industry for over seven years…and there’s just been a handful of times that I’ve advise someone to consider talking to a professional about bankruptcy. It’s a very heavy subject and not easy to suggest to anyone. Lately the topic is coming up more often. I just stumbled across this article from the Wall Street Journal and thought it would be worthy to share:

“Most consumers filing for bankruptcy continue to do so under Chapter 7 of the federal Bankruptcy Code. Under that provision, a person must forfeit certain assets — including, in some cases, a portion of home equity. Those assets are sold to pay off debts.

While Chapter 7 filings stop foreclosure proceedings, the break is usually only temporary. As a practical matter, many homeowners who file under Chapter 7 lose their homes.

In recent months, however, an increasing number of homeowners have filed for bankruptcy under Chapter 13, which staves off foreclosure proceedings while the homeowner works out a plan to pay off mortgage debt and other obligations over time — usually three to five years. To qualify, debtors must have a regular income and must stay current on their new bills. About four in 10 filers today are filing under Chapter 13 — up from three in 10 two years ago. The 2005 change in bankruptcy laws was designed in part to shift more filers to Chapter 13, which forgives less debt than Chapter 7….Consumer advocates say the homeowners who are most likely to benefit from Chapter 13 are those facing foreclosure because of a temporary financial setback, but who expect to be able to cover their mortgage payments in the future.”

If there are extenuating circumstances that caused the bankruptcy, Fannie Mae and Freddie Mac may allow transactions 24 months after the discharge as long as the borrower has reestablished their credit during that time. FHA may allow transactions while someone is in a Chapter 13 as long as they are current on the repayment and the Trustee approves the transaction. Late payments following a bankruptcy is not only damaging to your credit scores, it also pretty much eliminates the chance of having an “a paper” mortgage anytime soon.

Even if you have just a sniffle of financial distress, seek professional advise now. Bankruptcy is not something to enter into causally, you will need to consult with an attorney who specializes in bankruptcy.

If you have a mortgage that’s adjusting within the next 12 months, or you don’t know the terms of your mortgage, please contact your Mortgage Professional.

Filed Under: Credit & Financial Strategy, Homeownership & Lifestyle Tagged With: bankruptcy

Can I get approved for a 400,000 home loan with a 600 credit score?

November 6, 2007 by Rhonda Porter 4 Comments

Yes…quite possibly! The title of this post is a question that was entered as a search that found Mortgage Porter. Someone could buy a $400,000 home with a 600 credit score if:

FHA Scenario Possibility

No late payments or derogatory credit in the past 12 months. FHA insured loans do not use credit scores.
Base loan amount at FHA loan limit
Just shy of 10% down or a minimum of 3.5% down plus closing costs with a 6% seller contribution.

With conforming, if the other qualifying factors (income, assets, employment, down payment) are strong, the borrower may still qualify for a mortgage.

At the very least, if your credit score is 600 and you’re considering buying a home, I suggest contacting a Mortgage Professional to have your personal scenario reviewed. The higher your credit score, the better your rate may be for a mortgage and a qualified Mortgage Professional should be able to advise you on how to improve your credit rating.

Ready to explore your home buying options?

I’ve been helping Washington State homebuyers navigate the mortgage process since 2000. No pressure, no jargon — just an honest conversation about what’s possible for you.

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Rhonda Porter · Licensed Mortgage Advisor · NMLS #121324 · Washington State

Filed Under: Credit & Financial Strategy, Home Buying

Please Don’t Neglect Your Unhealthy Mortgage

October 22, 2007 by Rhonda Porter Leave a Comment

Today I received a phone call from a CPA who was trying to help her clients who have a “toxic mortgage”. She was hoping I would be able to save them…there was a time that I probably could perform a “rescue”. In fact it was just a few months ago before the current mortgage melt down. Believe it or not, when applied correctly, subprime mortgages could mean the difference of someone being able to save their home assuming they were able to be disciplined enough to keep (or get) their finances healthy. This family will not qualify for FHA or FHASecure (they don’t have an ARM that’s adjusted). What they need is a subprime (now known as “non-prime”) mortgage to buy them a little time. Now their time is running out. [Read more…]