Top 3 Mortgage Rejection Reasons

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Have you been denied a mortgage loan recently? Rejections usually don’t come down to a single reason, because lenders look at your overall financial status.

However, some factors increase your risk of rejection. According to NerdWallet’s 2018 Home Buyer Report, three issues stand out as primary reasons for mortgage denials based on the most recent available data (2016). The top two are fundamental to the Ability-to-Repay rules outlined by the Consumer Financial Protection Bureau (CFPB) in the wake of the financial crisis. The third is more related to the home than the borrower.

1. Debt-to-Income ratio (DTI) – Your DTI ratio is your total monthly debt obligations divided by your gross monthly income. NerdWallet found that 28% of mortgage loans were rejected primarily for a poor DTI, the highest percentage of any factor evaluated.

DTI limits may vary, but the upper limit has generally been in the 43% to 45% range for a loan to be consider…

Nearly Half Of Millennials Feel Held Back By Credit Score

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Is a bad credit score dragging you down? Almost half of millennials (46%) feel that way, according to a new survey conducted by OppLoans.

It’s an understandable feeling, given that millennials came of age during one of the worst recessions in decades. Many millennials emerged from the recession with delayed careers or lower-than-expected earnings and burdened with excessive student loan debt before they even started.

As a result, millennials tend to have lower average credit scores. According to Experian, millennials had an average VantageScore of 638 in 2017 – well below the overall average score of 675. In the previous year, TransUnion found that 43% of millennials had scores considered to be subprime.

The ripple effects of bad credit are reflected in many of the survey results. One-quarter of millennials claim that poor credit adversely affected their housing opportunities, while 14% of millennials continue to live with roommates because bad …

Video: Getting The Most From Identity Theft Protection

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Like many other personal finance experts, author Jordan Goodman recommends using an Identity Theft Protection service to safeguard against the growing scourge of Identity Theft. In this video, “America’s Money Answers Man” explains how to get the most out of using one.

If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out Identity Protector by MoneyTips.

What Do I Do When My Debt Is Sold?

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Just like assets can be sold, so can debts. It’s possible that your auto loan or mortgage could be sold by one lender to another. If your debt is in good standing, the terms and conditions of your agreement generally apply, but things relating to the servicing of your loan such as due dates and payment arrangements may change.

The new loan servicer must notify you within 30 days of assuming your loan, providing the date of transfer and the contact information that you will need to continue your payments. Since the due dates may change and any autopayment functions may need to be established, you should act as early as possible and contact the new servicer to work out details and verify that your loan terms remained intact. Mistakes can happen, and it’s less costly to spot them early.

If you already sent your payment into the previous servicer, don’t panic. You have a 60-day grace period that waives late fees if you mistakenly sent the payment to the wrong lender….

Card Cracking 101

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By Sandra Parsons

While Cardi B is topping the charts, “Card Cracking” is ruining some music fans’ lives. Rapper Young Ash and five others were recently indicted for running a card cracking ring that recruited accomplices through her Snapchat channel. Learn how card cracking works and how you can avoid falling victim to such a scam.

What is card cracking?

Card cracking is a type of financial fraud in which the fraudster promises easy money to entice regular people into sharing their debit card, PIN, and online banking credentials. The fraudster deposits bad checks (often online) and then quickly withdraws them from the ATM. They instruct their victim/accomplice to report the activity to their bank as unauthorized to get reimbursed for the loss once the checks bounce. The fraudster walks away with the withdrawn cash, and the accomplice gets a cut of the profits.

However, it doesn’t usually play out the way the accomplice t…

The Easy Way To Save Thousands On Your Mortgage

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You probably comparison-shop for most of your purchases, especially the high-dollar ones. If you’re going to spend money on a new appliance or an automobile, you want to review options to make sure you’re getting the best deal.

According to the Consumer Financial Protection Bureau (CFPB), there’s a big exception to this rule – mortgages. Almost one-third of homebuyers don’t bother shopping around with different lenders to find the best mortgage rate offer for their home purchase. In fact, over three-quarters of homebuyers applied for a mortgage with only one lender!

Why would you not shop around for the mortgage rate on your new home – the largest purchase that most Americans will ever make in their lifetime?

The CFPB suggests several reasons, topped by the assumption that shopping makes no tangible difference. A previous survey by the CFPB and the Federal Housing Finance Agency found that most consumers assume all mortgage lenders offer roughly the sam…

5 Spending Habits That Won’t Rebuild Your Credit

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When your credit score is down, it takes great effort to rebuild it. You have to take care to pay down your debts and get your finances in order. You may also have to change some of your spending habits to have the greatest impact. Consider these five spending habits that will retard your credit rebuilding efforts.

1. Paying Cash

Arguably, it is responsible behavior to pay your bills with cash but using cash does not give lenders any way to assess your creditworthiness. There is no payback to monitor because there is no lending involved.

As Millennial Money Expert Stefanie O’Connell notes: “If you are not borrowing money and you have no history of borrowing money, then you have no credit. That means not being able to be approved for the mortgage or the auto loan or the personal loan… whatever it is in the future.”

2. Using Debit Cards or Prepaid Cards

The same principle applies here as it does with…

Video: The Top 3 Credit Score Myths

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Does checking your credit score actually lower it? How does avoiding credit or closing an old account impact your current rating? Watch our exclusive video above as MoneyTips Consumer Advocate Kristin Malia reveals the truth behind three popular credit myths.

You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.

Adverse Action Notices 101

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Have you been rejected for credit? You can mope and complain about the unfairness of it all – or you can turn a negative today into a positive tomorrow by learning from the experience.

Thanks to the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA), you must receive an adverse action notice that explains why a potential creditor has denied your application. If the decision was made based on information from a credit report, the adverse action notice must contain the following information:

  • The name, address, and phone number of the credit-reporting agency (CRA) that provided the information used to make the decision.
  • A statement explaining the reason for the denial of credit.
  • Your right to receive a free copy of your credit report from the CRA, and the right to dispute the information in the report.
  • If your credit score was involved in the decision to deny credit, your credit score …