Mortgage California Blog

Mortgage News Roundup

March 27th, 2014

Mortgage loan applicationMortgage rates are rising sharply after the Federal Reserve’s March 2014 FOMC meeting.

They described the U.S. economic growth as having “slowed” during the winter months acknowledging inflation rates as less-than-optimal. The Fed also announced the next phase of its QE3 taper, to being in April.

QE3 is a economic stimulus program which aims to suppress U.S. mortgage rates. As the size of QE3 shrinks, mortgage rates are expected to rise. The April taper marks the third round of reductions to the QE3 program.

Subprime mortgages making a comeback

Say it ain’t so, Joe. Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again. A bad credit score is considered one less than 640.

This time, the mortgages come at a heavy price. Last time, lenders were handing out subprime loans with low teaser rates and little to no down payments. Now, these small lenders are charging interest rates of as high as 8% to 10% and requiring borrowers to make down payments of as much as 25%-35%.

It could be worthwhile for some people with poor credit who are looking to build it back up and buy a house while they’re still below market price.

What to Do When an Employer Wants to Pull Your Credit Report

It’s been happening for a few years now. Companies want to run a credit report on you to see if you’re responsible enough to work there. Mind you, studies don’t prove any correlation between your credit and how you behave at the office, but that’s an article for a different blog.

So, here’s some things you should know.

  1. It’s considered a soft pull, so it won’t affect your credit score.
  2. They can’t see your credit score.
  3. The reporting bureaus have created a special report for potential employers that doesn’t include account numbers, date of birth, or any references to a spouse if you have one.
  4. They need your permission first.

So what can you do?

Well, you should regularly pull your report and look for errors. If you see something that’s incorrect, get it fixed as quickly as possible.  You should know what’s on your credit report before your potential employer sees it. If you can’t get it fixed and they want to pull it, be up front that you’re in the process of fixing errors.

If there’s some problems that really are correct, you get a chance to have your side of the story heard beforehand which makes you look more forthright and a better candidate.

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