Credit Scores

I’m reading the book Mortgage Confidential: What You Need to Know That Your Lender Won’t Tell You by David Reed.

On page 138, he notes when two people apply for a loan, lenders may use the score of the person who makes the most money or they may use the score of the person with the lowest credit score. They won’t average your scores.

A cosigner can’t erase somebody’s bad credit.

If a person has bad credit, it is better to erase that person from a loan.

If your credit card payment is a day late, don’t sweat it. If you are 30 days late, then sweat it.

Prompt payment is 35% of your credit score. The next third is your balance and what percentage it is of your credit limit.

Loans by themselves are not predatory, but a loan officer can make a predatory loan by not fully disclosing. Still, the whole “predatory” thing is hard to nail down.

I have some male friends and some women would say they have a predatory love life. Some would even call them psychopaths because they like to love a lot of women. My friends would say that everything that occurs between them and the ladies is 100% consensual.

So, one observer could look at so-called predatory lending and say it is 100% consensual.

You can repair your own credit. Don’t pay somebody else to do it for you.

There are really only two types of mortgage loans — adjustable rate and fixed rate.

Some people can’t stomach adjustable rates. They can’t handle the uncertainty. If a fluctuating mortgage payment each month makes your stomach churn, then get a fixed rate mortgage.

David Reed recommends not paying points or origination fees when refinancing.

You might be able to reduce your rate without refinancing through note modification. Expect to pay a fee of about $300 and realize you will get a rate a bit higher than the open market.

You have to qualify for a refinance just like you did for the original mortgage loan. A lender will have to pull your credit score. Your credit and debt ratios will be reviewed all over again. And your old home appraisal won’t matter.

You can’t add someone to your refinance application to help you qualify.

Renters pay forward. They usually pay at the first of the month for the month ahead. Mortgage payments are for the past month lived on the property.

David Reed says that using a realtor will save you time and money.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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