Why did your credit score drop? Some less obvious reasons

house or credit card usage

 

Perhaps you're preparing to buy a home. You know that your credit score is a major deciding factor in whether you will be approved, as well as what rate and terms you will be offered. The better your credit score, the better interest rate and terms the mortgage company will offer.

You have been paying all your bills on time, and trying to do everything right . . . but your credit score suddenly dropped. What happened?

Paying your bills on time is a major factor in your score, but there are some less obvious reasons your credit score may have dropped.

HOME BUYER FAQ: How much money will I have to come up with to buy a home?

home buyer faq graphic

HOME BUYER FAQ:  How much money will I need to buy a home?

Answer:  It depends on several of factors, such as the price of the home, the type of mortgage you get, and what seller concessions are negotiated in your purchase agreement. In general, you will need to have enough money to cover the cost of (1) earnest money, (2) down payment, and (3) closing costs (the seller can pay all or most of your closing costs, depending on the loan).

GOOD NEWS! Fannie Mae Announces Significant Changes to Help People With Student Debt

Learn about the significant changes made by Fannie Mae to help people burdened with student debt qualify for home loans.  Many first-time home buyers will be affected by these changes.  

If you have been turned down for a home loan in the past because your debt-to-income ratio was too high, Fannie Mae just announced it has raised the DTI ratio from 45% to 50%.  If you can document that someone else is making your student loan payments, say your parents or your employer, Fannie Mae will no longer count it toward your DTI.

What is the Difference Between Interest Rate and APR?

Laptop screen in browser on interest rates

Buyers are often confused about the difference between the Interest Rate and the Annual Percentage Rate (APR).  

The interest rate is a percentage of the principal loan amount, and reflects the base cost of borrowing the money.

The Annual Percentage Rate (APR) takes the base interest rate and adds to it the additional costs to get the loan.

What are these additional costs?

And, why is it important and useful for the buyer to know and understand the APR?