9. What Is This APR (Annual Percentage Rate) All About?Simply put, the Annual Percentage Rate is generally higher than the nominal interest rate, or the rate that most folks think of when they want to know what their interest rate will be. Why is it higher? It is figured by recalculating the interest rate after removing many of the standard fees that are charged in a loan. Example:$174,000 Loan @ 4.875% for 15 Years Monthly Payment = $1,353.43 Excluded Fees = Amount Financed of $169,078.57 Recalculating New Loan using $169,078.57 with same monthly payment of $1353.43 will render a new interest rate of 5.185%, or an APR of 5.185%. So, simply put, the APR provides a better of way of understanding what the true cost of credit is. 10. What If I Know My Credit Is Poor Or I Have Had A Bankruptcy?Bad things sometimes happen to good people. We all have had adversity in our lives, sometimes placing us in situations beyond our control. Luckily, if you have a credit problem, a past bankruptcy, or a foreclosure, a knowledgeable loan officer may be able to find a program that you will qualify for. Then, the only analysis becomes whether that particular program makes money sense for your individual situation. Keep in mind that if debt consolidation and improved monthly cash flow is your goal, oftentimes a loan at even higher interest rates than you currently have may make a lot of sense. Let's look at a good example. Tom and Mary have been having a lot of trouble keeping up with the bills. Mary just lost her job. Their house is worth $350,000. Tom makes $5,100.00 a month. Currently, their finances look like this.  Hence, to pay the basic expenses at Tom and Mary's house, they need to start by coming up with $2,441.00 each month. Then they need to pay for food, clothing, utilities, car payments, medical, and dental, etc. Tom and Mary's credit score has fallen way below 600. With their reduced credit score, they are now able to qualify for a 7% rate, so they reconsolidate their first and second mortgages and all their credit card bills. Now their situation looks like this:  Bottom line, by refinancing at a higher rate, they save $588.00 per month. Not bad! 11. If My Credit Is Poor, Are There Measures I Can Take to Improve My Credit Scores?You bet there are. If you have had a bankruptcy, no doubt your credit report is full of old credit issues that have gone away, but still remain on your report and do drag your credit scores down. Even if you have not had a bankruptcy, there are often items on your report that do not belong there and should be removed. Most folks think that writing letters to your creditors will resolve these issues, when in fact, this is usually the slowest means of getting the job done and often does not work at all. Give us a call, or send us an email asking for our free report on "How to Fix Your Credit." We have helped many people get their scores up 50, 100, or even more points in a 2-4 month period. The net result to them, a better loan at a much better rate. 12. Should I Set Up an Impound Account with My New Loan?This is an issue of personal preference. An impound account is simply an account set up with your lender to automatically pay your property taxes and/or insurance and possibly other fees. A sum is added to your monthly payment of principle and interest to cover the taxes and insurance. Some lenders may require an impound account when your LTV exceeds 80%. As an example:  |