- Shopping for rates?

- Qualifying for a Mortgage Loan

- All About Credit

- You may have poor credit ...

- Start repairing your credit now

- Choosing a Mortgage Program

- About Loan Programs

- Home Equity Loans or Lines of Credit

- A step-by-step guide to the mortgage process

- Documentation Check List

Searching the Internet for the best mortgage rates can be confusing and misleading.

At KB Mortgages, Inc. we believe in honesty and education. For the lowest rates, there are so many factors involved in determining an interest rate that it is necessary to ask some questions before determine the rate. Mortgage rates can be determined by three main factors. These are credit, capacity and collateral. See our page on Qualifying for a mortgage loan for more information. A better and more accurate way to find out if you qualify for the lowest rates is to assess these factors. We can provide a free credit report for you. We will also go over the report to help you understand it. See our page on Credit for more information.         <<rate>>

When you are looking for a new mortgage for either a refinance or purchase transaction we look for three main factors. Your loan qualification is based on your credit, your ability to pay (Capacity) and your collateral.

Credit- is it likely you will repay the loan. Do you pay your debts on time? Are your financially stable and reliable?

Capacity- Are you able to pay the loan? What kind of debt do you currently have? Do you earn enough income to make your payments?

Collateral- do you own something of value that can be promised to the lender if you don't repay the loan?

Lenders also will look at:

- Your monthly income
- Occupation and job stability
- Homeownership history

Credit Bureaus determine your credit score by looking at these characteristics:

1. Past Late payments. If you failed to make payment in the past
2. How is your credit being used? Have your maxed out or spent close to the limit on your credit cards? Do you pay off your bill every month or keep a revolving balance?
3. Your age.
4. Credit inquires. Have you had numerous inquires in the past year? It may look like you are applying for a lot of credit due to financial difficulties or that you are over extending yourself.
5. Your credit type. It is best to have a mix of installment and revolving loans. Installment loans are a fixed amount with a fixed payment.

Your credit can determine what you can buy, what type of car you drive, your insurance rates and even where you can live and work. It is important to build and maintain the best credit history possible. Having poor credit, little or no established credit or unresolved disputes with creditors can affect your purchasing power and your ability to get a loan.

If you have five to six accounts that are seasoned for at least two years with no late payments your should have "A" credit. You should avoid having any more than two credit card payments more than thirty days late or one installment payment that was thirty days late. No payments of any kind should be more than sixty days late. There cannot be any outstanding debts resulting in judgments or liens.

Late fees are important to avoid and doing so is an excellent method for increasing your credit standing. Don't let your credit limit get too high a large line of available credit means you are capable of spending a great deal. I t may sound impressive to have a high credit limit but it can actually put you at risk. Credit inquiries are generated when a creditor obtains your credit report (when you apply for a credit card or loan) Inquiries typically remain on your credit report for two years. If too many report are run it sends a signal that you may be overextending yourself.

Judgments and liens on your credit report is a red flag to lenders and usually means that you are a high-risk borrower. You need to resolve any collections or judgments because they can create a lien on your property.

Revolving Credit (usually credit cards)- any payments sixty days late or any two thirty day late payments.

Installment credit- any sixty day late payments or any one payment two or more thirty day late payments.

Housing debt- any late payments on mortgage or rent.

Numerous recent credit inquires

Overextended credit

Paycheck garnishments

Liens

Bankruptcy/Foreclosures

Don’t wait.  Here are a few suggestions.

*Don’t ignore the problem.  Contact your lender and ask for assistance.  We may be able to assist you.

*Check your credit report to assess the problem. Make sure all of the information is accurate and up to date. If you have a unique situation which led to your bad credit you may be able to write a 100-word statement explaining your circumstances and send it the credit bureaus.

*Get credit in your own name.  If you are married and your spouse has poor credit history you need to establish credit in your name.  Try to avoid being a co-signer because you will be held financially responsible if the other person fails to meet their obligations.

*Check your current rates and fees on your credit cards.  They may be excessively high.

*Try to pay more than the minimum due each month. You will get out of debt much faster.

*Obtain a secured loan.  Your bank may assist you with this.  Typically they will ask for you to put in deposit a certain amount and then will off you credit based on that same amount.

*Try not to open several new accounts in a short period of time. Too many inquires may indicate that you are in financial distress or are over extending yourself.

*Do not max out your credit cards.

The right type of mortgage for you depends on many different factors:
    *Your current financial picture
    *How you expect your finances to change
    *How long you intend to keep you current home
    *How comfortable you are with your mortgage payment changing.

The best way to find the "right" loan for you is to discuss your finances, your plans, financial prospects, and your preferences with a mortgage professional.

Fixed Rate Mortgages- the most common program where your monthly payments for interest and principal never changes. Property taxes and insurance may increase but generally your monthly payments will be very stable.

Fixed rate mortgages are available for 30 years, 20 years, 15 years and even 10 years. Fixed rate fully amortizing loans have two distinctive features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end off the loan term. The most common fixed rate loans are 15 year and 30-year mortgages.
During the early amortization period, a large percentage of the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to the principal. A typical 30 year fixed rate mortgage take 2.5 years of payment to pay half of the original loan amount.

Adjustable Rate Mortgages-These loans generally begin with an interest rate that is 2-3 percent below a fixed rate mortgage and could allow you to buy a more expensive house. The interest rate changes at specified intervals depending on changing market conditions. The rates can adjust up and down.

There are also mortgages that combine aspects of fixed and adjustable rate mortgages. Staring at a low fixed rate for 3-10 years then adjusting to market conditions.

Balloon Mortgages- Balloon loans are short-term mortgages that have some features of a fixed rate loan. The loans provide a level payment feature during the term of the loan but as opposed the 30 year fixed rate mortgage, balloon loans do not fully amortize over the original term. Balloon loans can have many types of maturities but most balloons that are first mortgages have a term of 5-7 years. At the end of the loan term there is still a remaining principal loan balance and the mortgage company generally requires that the loan be paid in full, which can be accomplished by refinancing. Many companies have other options that allow you to convert the loan to a fixed rate.

The balloon mortgage program with the conversion option is often called a 7/23 Convertible or 5/25Convertible.

Home equity is the difference between your home's market value and how much you owe on your home mortgage(s). Home equity loans can be used for debt management or pursuing your dreams

Put money in your pocket by paying down those high interest debts or take that much-needed vacation. What ever you use the money for it may be tax deductible (consult your tax advisor). For instance, credit card interest is usually not tax deductible. It may become deductible if your pay off outstanding debt using a home equity loan. You also can typically cut your interest payment in half with a home equity loan.

KB Mortgages, Inc. can help you with lowering your monthly debt payments and saving you money. With a Home Equity Loan we can save you three, four even five hundred dollars per month.

Debt management may be the answer for you. We provide individual loan analysis to customize a loan for your needs. We have fixed or flexible rates for loans and lines of credit.

When you pay down your monthly debt, the benefits are great. You can free up money and stretch your budget. With a personalized loan from KB Mortgages you can save hundreds in interest charges, finance charges, and late fees. Consolidate your debt and go from several high monthly payments to one simple low payment.