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If you have any intentions of refinancing, we have a few suggestions to help you, whether it is for rate and term or for cash-out reasons. Now is the time to work on improving your credit scores and increasing your ending balances in your bank accounts. The following are a few 'tricks of the trade' that we like to share with our customers to help enable the borrower to get better rates for refinancing.
1) Do not maximize your credit cards up to their 'High Credit' limit. It would be better to hold two credit cards at half 'Balance Owing' than to have one card at full 'Balance Owing'.
Example: You have $10,000.00 in credit card debt. If you have two credit cards with $10,000.00 'High Credit' limits, you should keep $5,000.00 balances in each rather that maximizing one of the cards with $10,000.00 balance. Do not max out credit cards, as this will directly lower your credit score. Instead of opening new lines of credit, obtain line increases. If you must open new lines of credit, do it as soon as possible so that they become 'seasoned' debt.
2) Wait to pay your bills to coincide with that particular bank's Statement cycle. Example: If the information of your February Statement has a last entry as of February 25th, wait past that date to pay bills. This will make you balance higher for the month of February.
Adjust your bill paying so that your checks clear after your statement cycle end date. This will show a higher ending balance each month, which is preferred by all lenders. So, determine when your statements cycle and then, if necessary contact your creditors to change your due dates (assuming they will allow you to do so without impacting your credit). If your statement cycle is at month's end, adjust your due dates on your credit cards for the fifth week of the month. If you are self-employed, try to cycle more funds through your personal accounts. Many lenders will not give you credit for "D/B/A" funds.
Do not hesitate to call us to discuss these and other borrowing strategies. Remember the old adage: 'Lenders love to lend to those who don't need to borrow,' so now is the time to get your affairs in order so you look just so!
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