| The subprime mortgage crisis contributed to the | | | | consumer credit scores. How important is the FICO |
| current economic downturn as foreclosures are at | | | | score? Lenders charge an average rate of 4.77% on |
| historic levels. Many homeowners are searching for | | | | a 30-year loan for FICOs between 720 - 850. An |
| new loans as a way to save their homes. Lenders | | | | average rate of 6.58% is charged for FICOs between |
| have been reluctant in making new loans, however, | | | | 620 - 674. That translates in a $18.12 per $1,000 |
| now is probably the time to seek refinance mortgage | | | | borrowed difference. |
| loans. The current low interest rates provide an | | | | If you have a FICO score that is not that great, I would |
| opportunity for borrowers who want to lower their | | | | take the time required to improve it. This will save you |
| monthly mortgage. | | | | a ton of money over the life of your mortgage loan. |
| Rates for mortgage loans are at historic lows. It's a | | | | After checking your FICO score, check around with |
| great time to lock in an incredible interest rate. A good | | | | various lenders to determine if refinancing is available. |
| friend of mine just got a loan for well under 5% | | | | Try to negotiate terms with the lender, especially if you |
| interest, with a fixed rate. | | | | have been a good borrower. Shopping around for |
| Looking for a good mortgage rate requires effort and | | | | rates between different lenders provides for |
| work by the homeowner/borrower. Average loan rate | | | | competition and better terms for you. |
| for 30-year fixed loans are around 6% nationally. This | | | | The Recover Act signed into law by President Obama |
| means that on every $1,000 you borrow, your loan | | | | in 2009 gives the Federal government a way to assist |
| cost is $60. 1%, equal to 100 points, is the same as $10 | | | | homeowners. The Department of Housing and Urban |
| for every $1,000 borrowed. A reduction of 1% on a | | | | Development (HUD), offers various mortgage |
| $500,000 mortgage could mean an extra $417 a | | | | assistance programs including refinancing. HUD |
| month. | | | | operates through the Federal Housing Authority and in |
| Your FICO credit score will determine whether you | | | | partnership with Fannie Mae and Freddie Mac to help |
| qualify for refinancing. The FICO was developed by | | | | homeowners stay in their homes and avoid |
| the Fair Isaac Corporation and measures if a person is | | | | foreclosure. There is more than 4.8 billion dollars alone |
| creditworthy. Lenders look at FICO scores 620 or | | | | available through HUD to provide this assistance. |
| higher, from a range of 300 - 850. You can request | | | | It can be a challenge finding opportunities for |
| your score from any of the credit monitoring services | | | | refinancing in these tough economic times. Doing your |
| or online. The law permits one free credit score | | | | homework, ask appropriate questions make plans to |
| request per year. FICO is the one you want and is | | | | ease the process. Following these steps may pay off |
| used by lenders over the more commonly referenced | | | | in the long run and lower your monthly mortgage bill. |