If you end up with a lower tax bill, consider using that windfall to prepay your home loan, thereby saving you thousands of dollars over the life of your mortgage. One of the biggest changes in the real estate market over the past five years has been how home buyers with poor credit are perceived. But watching legions of less than perfect borrowers turn into stable, mortgage-paying homeowners has taught lenders to broaden their thinking when it comes to credit problems and home loans. The thriving economy has given lenders the opportunity to reach out to these prospective borrowers with new, custom-tailored loan programs designed to reward homeowners who pay on time, or help folks restructure their financial lives. But one of the biggest mistakes lenders make is to treat all home buyers' credit problems the same way, regardless of what caused the problem to begin with, explains Paul Abbamonto, president of Full Spectrum Lending, a division of Countrywide Credit, which also owns Countrywide Home Loans.
Some borrowers habitually pay late, even if they have the cash in their accounts to pay on time.
Those who have experienced a life event may end up refinancing their loan after 2 years. Those who habitually pay late may start shopping for a better deal within 24 to 36 months. Abbamonto said the company began creating various loan programs to help borrowers deal with their individual credit problems and the causes behind them. Abbamonto also hopes these programs will keep borrowers in their loans a little longer. If you miss a payment, but get back on the bandwagon, the interest rate will drop after another 12 months of ontime payments.